How should a 34-year-old govt employee invest Rs 20,000 a month for next 10 years?


I am a 34-year-old government employee. I save Rs 40,000 a year in PPF and pay annual premium of Rs 25,000 for an LIC policy. Now I want to invest Rs 10,000-20,000 a month for the next 10 years. Where I should invest? I also want to get a floater health cover for my family of three. Please suggest a plan that includes critical illness as well as accident disability cover.
Raj Khosla Founder and Managing Director, 
replies: Consider building a sizeable corpus in 10 years along with an emergency fund of Rs 1 lakh. Catering to a variety of needs such as kid’s education, asset building, wealth creation and retirement planning, start SIPs of Rs 4,000 each in Axis Bluechip Fund, HDFC Top 100 Fund, Mirae Asset Large Cap Fund, and Kotak Standard Multicap Fund. Put Rs 2,000 through SIPs in ICICI Prudential Short Term Fund and Franklin India Ultra Short Bond Fund. Buy a term plan of Rs 1 crore with an add-on rider of critical illness and accident disability. Suggested plans are HDFC 3D Plus Life and Aegon Life iTerm. For health insurance, buy a family floater of Rs 10 lakh from Aditya Birla Health Insurance or Religare Health Insurance.

I am 39 and the only earning member in my family of four. Last year, I took a Rs 1 crore term plan but didn’t opt for critical illness cover. Should I purchase a separate critical illness policy or should I buy a term plan with critical illness cover?
Yashish Dahiya, Co-Founder and CEO, 
replies, “The incidence of critical illnesses has gone up and treatment costs are very high. Ideally, you should buy riders like critical illness, accidental death benefit and waiver of premium while buying term insurance plans as it makes your policy much more comprehensive. In the given scenario, rather than buying another term insurance plan along with critical illness rider, buy a separate/standalone critical illness policy. A standalone plan provides you with adequate cover against a predefined list of critical illnesses by giving a lump sum benefit upon diagnosis.”