Building A Healthy Portfolio

Q. I have read your impressive suggestions to the readers of Dalal Street. Kindly guide me as well.
I am a 30-year-old individual (single) working with MNC at a package of Rs 4.50 lakh p.a. I have an investment of over Rs 900,000, the break-up of which as on 3rd April 2009 is as follows :-
1. Rs 6.10 lakh in equity (current market value Rs 3.27 lakh)
2. Rs 2.63 lakh in MF (current market value Rs 1.48 lakh)
3. Rs 30,000 in PPF (started in 2006-07)
4. Life insurance from Bajaj for Rs 50,000 as sum assured at a premium of Rs 5,900/- p.a.
5. Rs 2 lakh in fixed deposits and Rs 1 lakh in savings account
I have stopped my SIP with HDFC Equity Fund, SBI Magnum Contra, Reliance Vision & Reliance Div. Power Fund from Jan' 09 because I have seen no salary increase this year and job insecurity. I have taken health insurance from ICICI Pru (critical care and healthcare for a premium of Rs 7,700 p.a. for sum assured of Rs 5 lakh). I understand that I am under-insured and want to take up some term plan. Kindly suggest me the one with lowest premium and high sum assured.
My near term plan is to purchase a house worth Rs 35-40 lakh, foreign tour with spouse in the next financial year (June 2010).
Need your guidance in building a healthy portfolio for good returns with a perspective of 10-15 years. I am not in need of disinvesting from my current holding.

- Gaurav Wason, Punjab

A. Yes, Gaurav, I can understand the insecurity affecting you. Typically such a situation can be handled by reserving about 6 to 12 months of expenses in a fixed deposit account or a liquid fund. You already have a health cover to manage emergencies. It is recommended that you control expenditure instead of controlling savings! Savings for expenditure in the near-term is best made into liquid plus plans or short-term income plans.
You will require a life cover of about Rs 45 to 50 lakh totally. If you have any liabilities which you do not want to saddle your wife with, please add the number to this! I have suggested two term plans for your reference.
LIC has two term insurance plans, LIC Anmol Jeevan Plan which covers till the age of 55 and has a cap in sum assured at Rs 25 lakh and LIC Amulya Jeevan which covers till the maximum age of 70 years (policy tenure from 5 -35) and the minimum sum assured is Rs 25,00,001.
For longer term savings, you must include retirement as a goal. Please look into my earlier columns where you can read how retirement is to be treated.