I am a 40 years old single woman and my monthly income is 44,000. I have around 16 lakh in Public Provident Fund, 1.25 lakh in Post Office Monthly Income Scheme and 15 lakh in bank fixed deposits. I make payments of 77,000 annually towards unit-linked insurance plans (Ulips), unit-linked pension plans and Life Insurance Corp. of India’s market-linked plans. I have a health insurance worth 4 lakh (with an annual premium of 5,736). My goals include a planned retirement and about three overseas holidays. Am I on the right track?


You are currently invested in all debt assets. Whatever little exposure you have in equity is through the Ulip investment. Your asset mix needs to be changed to include various asset baskets. Firstly, you need to increase your savings from the existing investment by another 10,000 per month. It appears that you do not like to take risks, so I won’t recommend you pure equity products. Instead, you can consider hybrid equity funds. HDFC Prudence, Tata Balanced Fund, Birla Sun Life 95 fund are some of the hybrid funds you can pick. Start investment in these funds through a systematic investment plan (SIP) on a monthly basis.

Further, your existing investment in debt needs to be restructured. Some of the funds invested in bank fixed deposits can be moved to monthly income plans of mutual funds, where the equity exposure is limited to 25%. Funds such as HDFC MIP, Reliance MIP, Canara Robeco MIP are options that can be considered. This will help you in improving your overall net returns.

More importantly, you need to evaluate your Ulips and check if they can be surrendered without any charge. Since you are single and assuming you have no dependants, there is no need for you to have any life insurance— separately or in the form of Ulip. It is sheer wastage of money in your case.

It is also recommended that you increase your health insurance cover. In addition to the same, consider taking a critical illness cover. The basic idea is to make sure you are comprehensively covered for health insurance.

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