KEY PERSONAL FINANCIAL NEEDS
1. Your personal financial management should be a need-based process for providing solutions to your diverse needs arising at various life stages.
2. It should offer integrated solutions for Savings, Investments and Insurance products.
3. It should consider your profile and background, cash flows, life stage events, and your risk appetite.
4. You should be able to:-
a) Quantify your financial needs and goals, including retirement and legacy needs.
b) Estimate the resources available at various points in time to meet them, and
c) Chalk out a plan to bridge the gap, if any, keeping in mind your risk appetite.
a) Quantify your financial needs and goals, including retirement and legacy needs.
b) Estimate the resources available at various points in time to meet them, and
c) Chalk out a plan to bridge the gap, if any, keeping in mind your risk appetite.
5. A person's financial needs can be broadly classified under 2 main categories:
a) Income replacement needs, and
b) Financial liability needs.
a) Income replacement needs, and
b) Financial liability needs.
6. Income replacement needs are met by creating a corpus of products which would enable your family to continue with their current lifestyle if they face unforeseen circumstances.
7. These solutions could include mutual funds, traditional and unit linked endowment plans, and whole life products.
8. Financial liability needs are met by creating a corpus of products which would provide protection for meeting all your concurrent loans and obligations.
9. It is ideally met through a combination of pure life term cover, creditor protection covers, and health insurance covers including variants such as accident and critical illness products.