Score Methodology

How your FinPlann Health Score is calculated

v3.1 — April 2026

What is the FinPlann Health Score?

Your FinPlann Health Score is a single number between 0 and 100 that measures how well your finances are structured right now. It's calculated automatically from the data you enter in your financial planner — no manual input needed.

The Formula

Raw Score = Savings Rate + SIP Coverage + Emergency Fund + Goal Readiness + Insurance Cover

Final Score = Raw Score × Drag Factor

Each pillar is scored out of 20 points. The raw total is capped at 100, then adjusted by two dynamic drag factors — one based on your weakest critical foundation, and one based on your age and life stage (45+ only).

The 5 Pillars

20 points each

Savings Rate

/20

SIP Coverage

/20

Emergency Fund

/20

Goal Readiness

/20

Insurance Cover

/20

Pillar 1 — Savings Rate

How much of your income you keep

Savings Rate = (Income - Expenses) / Income x 100. A higher savings rate means more capacity to invest, prepay loans, or build your emergency buffer.

Savings Rate Points Benchmark
30%+20Excellent saver
20 – 29%16Healthy discipline
10 – 19%12Getting there
5 – 9%6Thin margin
Below 5%0Overspending risk

Pillar 2 — SIP Coverage

Surplus vs. what your goals need

SIP Coverage = Free Surplus / Additional SIP Needed x 100. Free Surplus is your monthly surplus minus existing SIPs already committed. This measures whether the remaining deployable cash can fund the additional SIP amounts your goals demand.

Coverage Points Meaning
100%+20Fully funded — surplus covers all SIPs
75 – 99%16Nearly there — minor gap
50 – 74%12Partial coverage — prioritise goals
25 – 49%6Significant shortfall
Below 25%0Major gap — review expenses or goals

Pillar 3 — Emergency Fund

Months of expenses covered by liquid assets

Emergency months = Liquid Assets / Monthly Outflows. Monthly outflows include both living expenses and loan EMIs — because if you lose your income, you still have to pay your EMIs. This pillar checks whether you have a safety net to handle job loss, medical emergencies, or unexpected costs.

Emergency Months Points Status
6+ months20Well-cushioned
4 – 5 months14Adequate baseline
2 – 3 months8Vulnerable — build buffer
Below 2 months0Critical — one event can derail finances

Pillar 4 — Goal Readiness

How comfortably your surplus funds all goals

Goal Readiness = Free Surplus / Additional SIP Needed x 100. This uses the same ratio as SIP Coverage but requires a higher bar — it checks not just coverage but how comfortably you exceed the SIP target, providing a buffer for market dips or lifestyle inflation.

Readiness Ratio Points Meaning
150%+20Comfortable buffer above goal SIPs
100 – 149%16Funded, but tight
50 – 99%8Partial — some goals at risk
Below 50%0Most goals underfunded

Pillar 5 — Insurance Coverage

How well your existing cover meets recommended levels

Weighted Coverage = Life Cover % x 50% + Health Cover % x 30% + CI Cover % x 20%.

Term Life (50%) carries the most weight as it protects dependents against loss of income, followed by Health (30%) and Critical Illness (20%). If no existing cover data is entered, a neutral score of 10/20 is assigned.

Wtd Avg Coverage Points Status
80%+20Well-insured across all three categories
60 – 79%14Decent coverage — close the remaining gaps
30 – 59%8Under-insured — review and increase cover
Below 30%4Severely under-insured — high risk exposure
No data entered10Neutral — not penalised, but not rewarded

Critical Foundation Drag

New in v3.0

Not all pillars are equal. Savings Rate and Emergency Fund are survival-critical foundations — without them, strong performance in other areas gives a false sense of security. A person with great SIPs but zero emergency fund is one medical bill away from liquidating those investments.

To reflect this reality, the final score is dynamically adjusted by a drag factor based on your weakest critical pillar. The worse it is, the more it pulls your total score down — automatically, with no hard-coded caps.

How it works

Critical Min = min(Savings Rate score, Emergency Fund score)

Foundation Drag = 0.5 + 0.5 × (Critical Min / 20)

The drag factor ranges from 0.50 (critical pillar at zero) to 1.00 (critical pillar at full marks). It scales smoothly — no sudden jumps.

Example scenarios

Scenario Raw Drag Final Band
All pillars strong 100 1.00 100 Excellent
Zero emergency fund, rest perfect 80 0.50 40 Needs Attention
Negative savings, rest perfect 80 0.50 40 Needs Attention
2-month emergency (8/20), rest good 88 0.70 62 On Track
Both critical pillars at zero 60 0.50 30 At Risk

Why this matters: Traditional equal-weight scoring lets someone score "On Track" with zero emergency fund as long as other pillars are strong. The drag factor ensures your score honestly reflects whether your financial foundations are secure — not just whether you're investing well. Individual pillar scores remain unchanged, so you can always see exactly where to improve.

Age-Urgency Drag

New in v3.1

A 28-year-old with no insurance and vague goals has decades to course-correct. A 55-year-old in the same situation is in genuine trouble — they're close to retirement with no safety net. The same raw score should mean different things at different life stages.

For users aged 45 and above, an additional drag factor penalizes weak Goal Readiness and Insurance Coverage — the two pillars that become exponentially harder (and more expensive) to fix later in life.

How it works

Age Critical = min(Goal Readiness score, Insurance score)

Age Drag = 0.7 + 0.3 × (Age Critical / 20)

Final Score = Raw Score × Foundation Drag × Age Drag

Users under 45 are not affected (Age Drag = 1.0). For 45+, the drag ranges from 0.70 (zero goals & insurance) to 1.00 (full marks).

Life stages

Age Life Stage Age Drag Key Focus
20–29 Foundation Building 1.00 (none) Build habits, start SIPs, get insured
30–44 Growth Phase 1.00 (none) Maximize SIPs, define goals, grow corpus
45–54 Pre-Retirement Planning 0.70 – 1.00 Close goal gaps, lock insurance, de-risk
55+ Wealth Protection 0.70 – 1.00 Protect corpus, ensure insurance, draw-down plan

Example: A 52-year-old with raw score 80 and perfect foundations (Foundation Drag = 1.0) but zero insurance (sub_insurance = 0) and weak goal readiness (sub_goals = 0): Age Critical = min(0, 0) = 0 → Age Drag = 0.70 → Final Score = 80 × 1.0 × 0.70 = 56 (Needs Attention) instead of 80 (Excellent). The same profile at age 35 would score 80 — because they still have time.

Score Bands

Your overall score falls into one of four bands.

0406080100
A+

80 – 100 · Excellent

Strong across all five pillars. Keep it up!

B

60 – 79 · On Track

Good foundation. One or two pillars need attention.

C

40 – 59 · Needs Attention

Multiple areas need improvement. Action plan recommended.

D

0 – 39 · At Risk

Finances are under stress. Start with emergency fund + savings rate.

How to Improve Your Score

Actionable steps for each pillar — start with the one scoring lowest.

Improve Savings Rate

  • Track every expense for one month — awareness alone often cuts 5–10%
  • Auto-transfer savings on salary day (pay yourself first)
  • Cut one subscription or recurring cost you barely use
  • Negotiate rent, insurance premiums, or loan rates annually

Improve SIP Coverage

  • Start a step-up SIP — increase SIP by 10% every year with salary hikes
  • If surplus is low, extend goal timelines to reduce required SIP
  • Redirect bonuses or windfalls as lumpsum top-ups to goals

Build Emergency Fund

  • Target 6 months of expenses in liquid assets (savings account, liquid fund, or FD)
  • Build in stages — first 2 months, then 4, then 6
  • Keep emergency funds separate from investment accounts
  • Don't touch it for non-emergencies — replenish immediately if used

Improve Goal Readiness

  • Prioritise goals — fund the most urgent ones first
  • If readiness is below 100%, consider reducing discretionary goals or extending timelines
  • Increase income sources — freelancing, side gigs, or career moves
  • Use the planner to see exactly how much each goal needs per month

Improve Insurance Coverage

  • Get term life cover of at least 10–15x annual income — pure term plans are affordable
  • Ensure health insurance covers your family — a base plan + super top-up is cost-effective
  • Consider critical illness cover — a lump sum on diagnosis protects against income loss
  • Review and update cover annually — life changes (marriage, kids, home loan) change your needs

Ready to check yours?

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