Contact us

To Buy: 1800-258-5899 (9:30 AM to 6:30 PM)


For Existing Policy: 1800-103-0003/ 1800-180-0003/ 1800-891-0003



Locate Branch



Search Button

FAQs Related to Financial Planning

So, what can you do to ensure that your finances are in good shape to withstand anything life throws at you? The solution is to make a financial plan that considers your current financial situation, your long-term financial goals, and, most crucially, how you intend to accomplish them. It's critical to have the long game in mind when doing this.

Childs Insurance

Frequently Asked Questions

Here are the 6 steps involved in the financial planning process.

  • Establish: The financial plans must start with building a relationship with his client. He should explain the services that will be provided and other rules and regulations involved in the process.
  • Collecting Data: In this stage, the financial planner will collect all the details of your financial situation. All the necessary documents should be provided by you to proceed further.
  • Analysis: The information provided by you is scrutinized in this stage. Your current situation is assessed to determine how to achieve the goal you set.
  • Development of alternatives: The planner now provides you with various recommendations regarding how to achieve your goals. This is based on the information analysed earlier.
  • Implementation of the solutions: Once you agree on the recommendation, the financial planner will implement these with you.
  • Review: You along with your financial planner should review the situation at regular intervals.

The cost of a financial planner is not fixed. There are various ways in which you can pay a financial planner:

  • Fixed fee: The fee can be fixed from the start. This can range from Rs 5,000 to 40,000 depending on the work done by the financial planner.
  • Commission based: Commission from the assets purchased goes to the financial planner
  • Asset Based: Generally, in this method, the financial planners charge you 1% of the total assets.
  • Result based: Here you pay a flat per cent with an additional bonus (if the returns are higher than expected) to the financial planner.

Yes, you can also create your financial plan. You can use the multiple online financial calculators available on the life insurer’s website to estimate your investment needs. However, it is recommended that you approach a professional financial planner once in a while to have a comprehensive financial plan.

Financial planners can help you prioritise your goals and investments in the best possible way so that:

  • Your investments are directed towards more important goals first
  • The accumulated money is not affected by inflation or taxes
  • You have adequate money available at the time of the need
  • Your family’s goals are adequately protected from unforeseen contingencies

Financial planning usually has three major stages:

  • Planning: Here you determine what problems need to be taken care of and what financial goals are to be achieved. For example, the goal could be to save Rs 1 crore in the next 15 years. Planning will determine:
    • The appropriate investment option as per your risk appetite
    • The amount you need to save now or every month
  • Implementation: Here, the plans that you have made come into play. This is the action stage. The plan thought out is implemented to achieve the goals.
  • Review: This is the stage where the strategy being used is reviewed from time to time to check if things are happening according to the plan.

You can have three types of financial plans based on your ultimate objectives:

  • Specific: This is the planning done to achieve a precise goal of yours. For example, buying a new car for your family.
  • Comprehensive: In comprehensive planning, you try to achieve not one, but consider all the possible goals in life and even the unforeseen events. This will include taking care of financial safety needs, long-term goals such as retirement as well as contingency planning.
  • Legacy/Estate Transfer Planning: This deals with planning to ensure a smooth transfer of the estate to your family members after your death or during your life. Estate planning is done to ensure that the transfer is executed as intended and with a low tax incident for the receiver.

It is a popular rule of budgeting which the various percentage of your income you have to allocate to the 3 types of expenses. The three types of financial purpose you have in your life are:

  • Immediate financial needs, i.e., household and lifestyle expenses
  • Short-term financial goals such as home renovation, car purchase, family vacation, etc.
  • Long-term financial goals such as retirement goal, child’s higher education and marriage goal, house purchase goal

The rule dictates that you should devote:

  • 50 per cent of your total income towards the household and lifestyle expenses
  • 20 per cent of your total income towards the short-term goals and large lifestyle purchases
  • 30 per cent of your total income towards your long-term important life goals

A good financial plan must be an elaborate and comprehensive plan. A good financial plan also provides you with simple actionable steps to guide your money.

A financial plan should be made in such a way that it accommodates the following:

  • Financial goal to be achieved
  • Details of cash flow
  • Investments made
  • Debts incurred and their management.
  • Savings
  • Plan for meeting contingencies
  • Estate planning

A good financial plan is also easy to review and upgrade.

There is no such rule that you should have a certain sum with you to get a financial planner. A financial planner can help you in the majority of personal financial matters. Usually, if you have a regular income and can save some of the disposable income, you can think of hiring a financial planner.

However, you can contact a financial planner to resolve a challenging financial matter as well. A planner can provide you with recommendations to make use of your money in the best way possible.

Financial planners can help you in every stage of your money:

  • Accumulation Phase: With active investment advise
  • Preservation Phase: With tax-efficient and safe investment assets
  • Distribution Phase: Ensuring maximum wealth transfer to your family

1% of investment amount would mean about 0.5 – 2% of your annual income depending on your savings ratio. Your savings ratio can range from 10% to 50% of your annual income. So, if you are earning Rs. 10 lakhs a year, you end up giving about Rs 10,000 to 20,000 to your financial advisor as fees.

This is recommended for those advisors who are acting as your representative and helping you with creating and implementing a comprehensive financial plan. Financial planning activity can offer huge long-term dividends both in monetary and emotional well-being.

A good financial advisor is one who handholds you through your financial journey. If your financial advisor is accompanying and guiding you closely 1% of your annual investment is a reasonable fee.

Yes, it is always beneficial to meet a financial planner to discuss your financial matters and double-check your decisions. Financial planners are expert professionals well versed in the investment markets as well as personal financial situations.

Additionally, financial planners can help you account for multiple factors in your decisions. For example, tax liability, ease of withdrawals, and market variability.

An example of the impact a financial planner can have on your decision could be your retirement savings. If you happen to invest and withdraw your pension without a financial planner, you will:

  • Invest in EPF/PPF/NPS > Withdraw Maximum Allowed > Buy a Pension Plan.

Here your pension will attract taxes at a slab rate. With a financial planner, you can invest in instruments to enable a tax-free pension after retirement.

Financial planning has several benefits, not only for your financial health but also mental and emotional. Some of the prominent benefits of financial planning include:

  • Peace of mind
  • Long-term financial safety of the family
  • Healthy savings ratio
  • Efficient investment and use of funds
  • Staying unfazed during emergencies
  • Lower tax outflow
  • Long-term wealth generation
  • Easy goal achievement
  • Improved lifestyle
  • Financially safer retired life

Financial planning can bring more clarity to you about your current financial situation and help you achieve the desired status in future.

The most important step in financial planning is the implementation of the plan. Only with the implementation, you can realise the actual potential of your financial plan. You can create a simple financial plan for a single goal, or a comprehensive financial plan to cover multiple life goals.

However, the only implementation of the actionable plan will derive the ultimate results for you. Implementation or execution of the plan may often take months. For example, if you need to change your present spending habits to fully execute your financial plan, you need to make changes to the budget.

While executing a financial plan for the first time, first you must execute the contingency plan. Contingency plan includes – life and health insurance, and emergency fund needs. Only after this can you start implementing other parts of the plan.

A comprehensive financial plan includes all aspects of your financial life. The plan must address the following primary areas of your financial and investment needs:

  • Contingency & insurance planning
  • Retirement planning
  • Child education plan
  • Investment plan for other goals
  • Income tax planning
  • Budget and expense planning

A comprehensive plan helps you address multiple areas of your financial life, starting from the household budget to your most ambitious long-term goal. A comprehensive financial plan helps strengthen your financial health and future.

Online Plans Pay Premium Get a Call Contact Us