'I Own 18 Worthless Insurance Policies. Help!'

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Please ask your questions HERE to rediffGURU Reetika Sharma, who has an MBA from the ICFAI, and professional certifications from the FPSB, AMFI and IRDAI.

Anonymous: Kindly give your expert opinion regarding my monthly mutual fund investments at the moment of Rs. 40000 (total SIP gradually increased over past years) I have been doing for the last 7 and half years. I am 42 yr old. My total portfolio value till now is around Rs. 42,50,000. I want to create a corpus of around 2.5 Crore in the next 10 years.

1. HDFC Children's Gift Fund - (Lock-in) - Regular Plan - Rs. 10000.

2. ICICI Prudential Midcap Fund - Direct Growth - Rs. 5000

3. ICICI Prudential Multicap Fund - Growth - Rs. 2000

4. Axis Large Cap Fund - Regular Growth - Rs. 4500

5. Axis Focussed 25 Fund - Regular Growth - Rs. 2000

6. SBI Focussed Equity Fund - Regular Growth - Rs. 4500

7. Invesco India Small Cap Fund - Regular Growth - Rs. 5000

8. Edelweiss Multi Cap Fund - Regular Growth - Rs. 7000.

I want to increase the SIP of around Rs. 10000 in my mutual funds now to make total SIP value of Rs. 50000. I am thinking about increasing Rs. 7000 in Axis Large Cap Fund (which will take its total Sip value to Rs. 11500) and Rs. 3000 in Axis Focussed Fund (which will take its total Sip value to Rs. 5000). Kindly suggest me the following:

1. Possibility of creating a corpus of around 2.5 Crore in the next 10 years with these funds and what should be the right yearly increase in my SIP value.

2. Increasing of SIP of Rs. 7000 in Axis Large Cap Fund and Rs. 3000 in Axis Focussed Fund is right choice or should I increase in my other mutual funds. Your expert opinion will be appreciated.

I really appreciate your dedication in investing consistently for past 7.5 years and creating an amazing corpus for yourself.

Currently you are investing 40k monthly and want to increase it to 50k per month which is a very good decision as step-up SIP can make a huge positive impact in your wealth creation journey.

• If you continue investing at this pace, with a monthly investment of 50k for next 10 years, you can easily achieve 2.5 crores with a CAGR of 13%. And if you step-up with 10% yearly investment, you can get more than 3 crores after 10 years.
• However the funds you mentioned are little overlapping. It needs some minor re-allocation. You have 2 multi cap funds and 2 focused funds. You can keep one of both the funds.
• Increasing 10k SIP: Add 3500 to Axis Large Cap (total 8000), and Rs 6500 in HDFC Nifty 200 Momentum 30 Index fund.

As your portfolio size is quite big, it would be really better for you to work with a professional who reviews your portfolio periodically and changes it as per the requirement keeping in mind your age, requirements, financial goals and risk profile.

Anonymous: I am 34 years old, married, with no children yet, but we plan to start a family by the end of 2026. Our monthly household take-home income is 4.4 lakh. We have cumulative EMIs of 1.50 lakhs per month: (1) Home Loan (1 Cr Outstanding, 9 years left): 1.1 lacs per month, (2) Car Loan (8 lacs outstanding 4 years left): 25k per month (3) Personal Loan (4 years left) - 15k per month. Our investments include 50 lakh in stocks and mutual funds, and 30 lakh in PF. I have a term plan with cover till age 85, costing additional 1.3 lakh per year premium for next years.
Me and my wife are covered by our employer for medical insurance, and our parents will also have PSU pension and medical cover after retirement.
We spend around 1.4 lakh per month on household expenses in Gurgaon. We invest 1 lakh monthly having 20-90 split in stocks and MFs and keep 2 lakh in an emergency savings account.
My long-term goal is to pay off all loans, build a financial buffer to move back to my hometown a tier 2 city and do remote work from there - this might reduce our household income by 40%.
Given these details, how should I plan our investments to achieve the goals and how much time are we looking to achieve this?

Let us go through the details one by one:

1. You have a term cover and health insurance for yourself as well as family.

2. You should have emergency fund of 6 months' worth expenses in liquid mutual funds for uncertain times, 2 lakhs is way too less.

3. Currently 3 loans -- Home, Car and Personal. All loans will be finished in 9 and 4 years respectively (total EMI -- 1.5 lakhs)

4. 50 lakhs current holdings in stocks and mutual funds.

5. 30 lakhs in PF.

6. 1.4 lakh monthly expenses.

7. Current SIP -- 1 lakh per month in stocks and mutual funds.

You have built great wealth for yourself at your age. You are also planning to start a family. Keep your investments like this with consistency and you will finish loans and be able to move to your home as well.

Direct stock investment needs loads of time and research -- hence not recommended. It is advisable for you to keep your investments limited to mutual funds only. And it would be great to take a professional's help as even a slightest mistake can break or make your wealth.

Try to invest more than 1 lakh per month in mutual funds for a secured future.

So it is better for you to consult a professional Certified Financial Planner - a CFP who can guide you with exact funds to invest in keeping in mind your age, requirements, financial goals and risk profile.

Saket: I took one LIC insurance which is "AADHAR SHILA". This was sold to be by one known LIC agent. He sold me similar 17 insurance policies which will get matured every year starting 2038. I feel the policies are not worth it. I want to surrender these insurance policies.
Do I compulsorily need to visit LIC home branch for it? I live in different city now. Is there way to surrender it in my current city? If I stop paying the premiums, will I get surrender value whenever I close it when I go back to the home branch city maybe next year?

It is true that all LIC policies or policies like these are just a waste of money, time and energy. And usually our known ones sell us policies like these. Your thought of surrendering all these is a practical decision.

But for any LIC policy, you have to visit home branch. It will take an hour or two to fill the required forms and submit. That's it.

And you have to pay the premiums on time to surrender your policy otherwise it can lapse. Try and plan a trip before upcoming payment date.

• You can ask rediffGURU Reetika Sharma your questions HERE.

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Any use of the information/any investment and investment related decisions of the investors/recipients are at their sole discretion and risk. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. Opinions expressed herein are subject to change without notice.