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Rahul is an engineer with an MNC aged 40 years and has a monthly salary of Rs. 275000. The age of Mr. Rahul’s wife is 38 years and she is expected to live till 80 years. Mr. Rahul wants to ensure that there is an adequate amount of insurance cover for household expenses till life expectancy of his wife in case of any eventuality with him, He already has a Rs. 1.25 crore term insurance policy for which he is paying an annual premium of Rs. 25000.
Rahul goes to gym and does some sporting activity and spends Rs. 40000 per month for all these personal expenses. He has also taken a 20 year – Rs. 1 crore home loan for which he pays an EMI of Rs. 80000 with Rs. 60 lakhs outstanding.
From last decade Rahul is planning for all his children needs and anticipated a need of sum of Rs 1.5 Cr as on today out of which he has accumulated 30 Lac and investing 80000 per month in a mutual fund scheme, These are major Expenses and savings of Rahul, remaining is used for his household expenses.
Rahul has a son Arnav and wants to plan for his higher education. Rahul is looking for a four years professional course starting after 6 years for four years and the current cost of study is 15Lac per year which is increasing at the rate of 8%. Rahul wants to shift the money required for the goal in a debt fund a year prior to first withdrawal.
Rahul is planning to get retire at 60 years and expects to have retirement period of 35 years and require 75% of the household expenses during the period
Rahul’s Employer has Group health cover facility for employees but Rahul is a little bit anxious as it doesn’t work post leaving the job so he has taken a cover of super top up 15 Lac with a deductible of 5 Lac from a private insurance company. His company provides him 5 Lac Rs of cover.
Rahul’s company has given him a bonus of Rs. 6 Lac which he wants to use for prepaying his part of home loan.
Provident Fund Balance : 45 Lac (Average Annual contribution :- 275000 till retirement)
Equity Returns 11%
Debt Fund 8%
Inflation 6%
Provident Fund Returns : 7.9%
Risk Free Rate : 5.5%
Kindly answer the below questions on the basis of information given above:
What is the additional amount of life cover that Rahul should take so that in the case of any causality, the household expenses and other goals are met? (Insurance proceedings its assumed that investment will be done in Debt fund and inflation will be 6%)
In the Policy Year, Rahul had some hospitalization expenses which he claimed from his private insurer. Kindly tell what will be the amount paid to Rahul by the health insurance company in these different claims.
1 Claim 1: 200000
2. Claim 2: 200000
3. Claim 3: 500000
Rahul needs to know how much additional amount he will be needed at time of retirement over his provident fund balance at the time of retirement and the monthly investment required in Equity for any kind of shortfall. (Post retirement funds will be invested in Debt fund).
Rahul is planning to use the windfall ( bonus) to prepay a part of the home loan, then what will be the reduced tenure of the home loan.
Rahul wants to invest the money required for higher education of Arnav a year prior of first withdrawal in debt fund. What shall be the invested amount for the goal.
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