Secure Your Famiy

Always secure yourself and your family family first only then start planning your investments. Though all companies provide insurance for their employees, it is not sufficient to cover up major hospitalization costs in today's rate.

Even a normal cardiac surgery could wipe out all your life time saving if you are not adequately insured. Invest/allocate your money in the following financial products to secure yourself/family and invest the rest of your money in equities.

1. Term Insurance - There are many online term insurance, HDFC, avivia etc. For a Life cover of Rs. 1 Crore, you just need to make a premium of Rs.833 per month. If in case the insured person dies due to any circumstances, the nominee will be paid Rs. 1 Crore. We know that once a loved one in family passes away all of a sudden, your friends and relatives can only console them but cannot support them forever. Imagine the liabilities you may have, Home loan, car loan, personal loan.. Who will pay the EMIs for these loans? Neither your friends nor your relatives. So a term insurance is a must, it should be minimum 10 times of your annual salary.
2. Health Insurance - You always need to buy a health insurance when you dont need one, because when you are in need no company will be ready to give you a insurance. This is how health insurance companies work, you need to buy it when you stay healthy. Once you or your family is diagnosed with any illness/disease, then you will not be eligible to get insurance. So buy one immediately, for a family floater cover of Rs. 10 lacs , you just need to pay Rs.1000 every month
3. Personal Accident Insurance - This is a must if you are financially dependent only on your salary and no other source of income. Imagine if there is a accident happens, and if the person dies then he would be covered with Rs. 1 Crore policy (term insurance), but what in case if the person survives but unfortunately lost his hands/legs/ etc which would be life threatening situation where he may lose his job as well? Now who will protect his family? Here the Personal Accident Insurance policy will help, the company would pay you Rs. 5000 to 10,000 every week to you to cover up your daily expenses and you could also get a one time cheque of Rs. 50 lacs or so based on your policy. It would cost you Rs. 420 per month.
4. Investments- Once you buy all the above insurance you and your family are secured. Now make your investments for your short term/long term goals like Abroad holiday vacation, new car, Property, Education for your children etc. Always have a thumb rule to invest minimum 10% of your savings into equities every month either directly or through mutual funds. Trust me, this habit of saving 10% of your salary every month could lead to much higher lump sum money over the long run. You could raise your allocation to equities, once your income level increases. Invest half of the amount in ELSS, Tax saving mutual funds and the remaining in Growth/dividend funds.