- Is financial planning the same as investment planning?
- How much money should I accumulate before I start investing?
- Isn’t financial planning only for the rich?
- How much insurance do I need?
- Which is the best life insurance policy?
- Do I need a separate mediclaim policy of my own because my employer is providing me medical benefits anyway?
Q: Is financial planning the same as investment planning?
A: Investment planning is only one of the components of financial planning which is much more comprehensive to include insurance, taxes, retirement, estate planning etc. Financial Planning aims to improve your overall financial well-being.
Q: How much money should I accumulate before I start investing?
A: You should not wait to start investing. You can start your investment program with as little as Rs 500 per month and increase the same as you go. Even small amounts invested regularly over a long period of time balloon into a huge amount.
Q: Isn’t financial planning only for the rich?
A: This is a common myth. Every person who has earnings or inheritance needs financial planning. All of us have a family to take care of and every paisa that you earn should be utilized fully. This is what a financial plan seeks to achieve.
Q: How much insurance do I need?
A: The purpose of insurance is to provide for your family’s sustenance in your absence. Ideally, your insurance should be enough to take care of this till any other family member starts earning. Your insurance should also take care of any loans or liabilities that you may have.
Q: Which is the best life insurance policy?
A: There is no one answer to this because there are a number of policies that meet various needs of the policy holder. A term policy gives you the highest life cover for a given premium. Other policies combine insurance and investments and hence would entail a high premium for a given sum assured. Read our article on insurance here.
Q: Do I need a separate mediclaim policy of my own because my employer is providing me medical benefits anyway?
A: It is always better to have a separate policy for you and your family for the following reasons.
- You are covered without interruption while changing jobs or even if you find it difficult to find one.
- It will be useful in your older age because getting a policy then would be very expensive, if not impossible.
You can post your query here.
