Mint, Hindustan Times and NDTV, bring you a personal finance show, Let's Talk Money. The weekly call-in show, anchored by Monika Halan, editor, Mint Money, and Manisha Natarajan, editor and senior anchor, special programmes, NDTV, aims to answer viewers' questions about money-related issues. Here are edited excerpts from the show that aired over the weekend on NDTV Profit and NDTV 24x7
Natarajan: Our first guest is on Twitter:
Vineet Handa , 24, Pune, IT professional working for a MNC.
My portfolio details are:
1) PPF (Public Provident Fund) account with post office: Rs 22,000.
2) LIC policies: (a) Jeevan Surabhi; sum assured Rs 50,000; (b) The endowment assurance policy; sum assured R1,05,000
3) Insurance: Max New York Policy: Stepping Stones with Participating Insurance; sum insured R1 lakh with an accidental death benefit rider of an additional R1 lakh.
4) Unit-linked insurance plan: Kotak Smart Advantage Plan: sum assured Rs 5 lakh, annual premium of Rs 36,000.
I have a personal loan of Rs 1.5 lakh, for investing in shares along with a friend (Rs 75,000 each).
I have also a direct investment in equity of Rs 50,000. My annual salary is Rs 5.75 lakh.
1) Term insurance. How much amount should I go for? Is Rs 50 lakh good for a 30-year period? Also, if taking accidental benefit along with term insurance beneficial? Which policies should I consider? My father is a government employee and he will retire in 2016. Should I be looking separately for health insurance for my parents?
2) As you guys suggest, Ulip is not a good idea. Should I be exiting my Kotak Ulip? I have paid the premium for the past three years. 3) I am looking to start SIP (systematic investment plan) in two-three mutual funds as suggested by you - HDFC Top 200 and DSP BlackRock.
4) My father looks for investment in real estate through lottery system such as the recent Delhi Development Authority plots scheme. Should I be going into these things at this age?
Halan: So your question is what sort of life cover you want. R50 lakh is what you have in mind. It is right because 8-10 times of your income is what you need and this fits in... at around the age 30, you need to take audit of what your incomes are, who are your dependants, (and) you may need to top up. No riders, no return of premiums, just buy a pure vanilla term policy and off the net is really a good idea.
Natarajan: ICICI Protect, Aegon Religare are the cheapest one, which we are finding on the net. Both of them come between R4,500 and 5,000 premium per annum for a 30-year period and R50 lakh cover, so fairly cheap.
Halan: On DDA schemes, my suggestion to you is, go buy a lottery ticket if you think this way works for you, just buy a lottery ticket, it will cost you 100 bucks, you don't sink in large amount of time and money into this. Real estate investments are clunky, entry costs are high, maintenance, exit costs are high. But currently, keep your money liquid in financial assets, and he dabbles in stocks also.
Natarajan: And with borrowed money, that's my problem, stock market with borrowed money is absolute no..