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Money Matters

Managing your money can be tricky. Send your queries, and top-notch industry leaders will help you resolve any issue.

Financial Planning

Yasmeen Wajid: I am 40 years old and earning `2 lakh a month. We are a family of three and I have a four-year-old daughter. How much will I need if I want to retire at 50, keeping in mind the inflation factor? Also, how much will it cost to fund my daughter's post-graduation? I currently have mutual fund and equity investments. So, going ahead, should I invest in debt or equity? What do you recommend for life insurance and health insurance policies?

Brijesh Parnami, Executive Director and CEO of Essel Wealth Services, replies:

If you want to continue a similar lifestyle post-retirement (keeping in mind a 6.5 per cent inflation rate), you should have a monthly income of `3.3 lakh, which requires a corpus of `8.5-9 crore. At present, a master's degree could cost as much as `25 lakh. So, you will require `65-70 lakh after 16 years when she turns 20. You should start a monthly SIP of `10,000 in a diversified equity fund to create a corpus of `68 lakh to meet this goal. Also, when you buy a term plan for life insurance, the premium should not be the only criterion. Check the claims process and settlement ratio of the life insurance companies before you zero in on one. HDFC Life Click2Protect and ICICI Prudential Term Plan are good plans. For health insurance, one should check capping and deductibles. Finally, you should park your emergency fund in debt funds and invest in equities to grow your wealth.


Rohan Awasthi: My wife and I co-own a property that we bought in 2016 for investment purpose. We have let it out for a monthly rent of `20,000. My wife is not working since 2014, but she contributed to the home loan down payment from her savings. In income tax declaration, can I show the entire rental income as her income? Also, as I am the one paying all the EMIs. Can I keep claiming 100 per cent benefit for income tax purpose?

Archit Gupta, Founder and CEO of ClearTax, replies:

As you are co-owners, each of you has to show your part of the income from the house property. You cannot claim the EMI benefit and not show the rent as your income. Regarding interest and repayment of home loan principal, you are eligible to claim the benefits entirely as you are paying the EMIs.

Mutual Fund

Abhishek Sunder: With the last equity market rally, my MF portfolio has risen to `52 lakh. I am planning to send my daughter overseas for higher education and the estimated cost is `40 lakh. Should I rebalance my portfolio to save my gains and park around `30 lakh in safe investments such as fixed deposits to ensure that the cost can be met without a hitch?

Achin Goel, Head, Wealth Management and Financial Planning, Bonanza Portfolio, replies:

We could have analysed your case properly if you had mentioned the time frame. If you have more than three years left, you can park around 30 per cent of the goal value (`12 lakh) in good-rated fixed-income assets like bonds or corporate FDs as they offer higher yields than bank FDs. Shift the remaining 70 per cent (`28 lakh) to low-risk large-cap/multicap funds within your equity portfoliot.

Life Insurance

Ravinder Shah: I purchased a life cover of `50 lakh seven years ago. I was a smoker at the time and declared it while buying the policy. However, I have quit smoking for over five years now. So, will it be possible to get some discount on the premium as a non-smoker? I also intend to buy additional life cover. Should I declare myself a non-smoker in the new policy or will it create a problem in the claims process if the two policies have conflicting information regarding my smoking habit?

Yashish Dahiya, Co-founder and CEO of, replies:

You cannot make changes to the existing policy. The premium has been decided based on your age and other parameters such as smoker/non-smoker status, and is fixed for the entire tenure. But you can declare yourself as a non-smoker in the new policy. There will be absolutely no difficulty in case of a claim as both policies have been purchased at different times and your situation has changed.

Health Insurance

Srinivas Ramachandran: I have two health insurance policies - a group cover of Rs3 lakh provided by my employer and a Rs5 lakh family floater plan that I have purchased. In case I get hospitalised, which policy should I use first? If the bill is higher than the sum insured, can I use both policies and opt for the cashless mode?

Mahavir Chopra, Director, Health, Life and Strategic Initiatives,, replies:

Go for the employer health insurance first as it is easier to claim under a group insurance policy. In case the hospital bill is higher than the amount covered by that policy, you can use both. If you want to opt for a cashless claim, inform your hospital of the two policies. Once the sum insured under the first policy is exhausted, the paperwork for a cashless claim must be processed for the second policy.

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