How aware is your family about your investment?

As of December 2020, there is INR 23,171.53 crore unclaimed life insurance amount lying in the deposits of private and public life insurance companies combined. The unclaimed life insurance amount is the money that is not claimed by anyone in the last 10 years. And in other words, these are investments done by a humongous number of people for their family’s future to ensure their financial security and safety over decades with high hopes and expectations that get absolutely wasted as the family members of the policyholder couldn’t claim the money. And this happens primarily due to a reason- when the family is unaware of life insurance investments such as term insurance made by the breadwinner. 

What to do?

While ensuring that their investment and plans are guarded by not going gaga about them; it is equally essential to keep your family aware and educated about these plans. Your family either spouse, parents, siblings, or kids must be aware of various schemes and plans where you have invested money for crises. Imagine a situation where you have collapsed and gone unconscious for hours and you are required to be taken to the hospital for treatment. But you are unconscious and your family has no clue or doesn’t have any details of your health insurance plan and your family will have to pay hospital charges from their pockets which they might have and might not have readily available. This can affect their savings and if there are no savings then it can cost you your life. But if they have a complete understanding of your health care plan, then they can easily have you admitted to a hospital and recover without any additional challenge. 

How to do it?

Not only health insurance details, rather all different plans taken for different purposes of life such as NPS, Term Insurance, MFs, bank FDs, small savings, etc, should be told to your closed family members who would need these investments in your absence. 

Another crucial factor is that along with being just aware of different schemes of yours; your family must have complete knowledge of your investment schemes. There are multiple crucial factors in each plan that can affect the entire returns packaged for them, therefore the family members must have an understanding of every clause that can help them in getting the claim easily and entirely. Talking about some of that information then it includes-

(i) Insurance Policy Company, 

(ii) Nature of Plan

(iii) Plan details such as – Policy number, amount invested, Maturity Date/Month

(iv) Nominee designated by the policyholder

(v) Important clauses of the plan

(vi) Correct and easy contact methods to raise the claim

Right way to do it

Your family members are busy as you. So if you just tell them once about all these details, they might remember it or not, might forget some details or retain some in the back of their mind. Rather start involving your family members, your spouse, parents or siblings in your financial matters, discuss with them about different plans, their features, benefits & disadvantages. This will make them equally enthusiastic about the plans and their outcomes and finally help them in remembering information throughout. 

The next helpful mechanism to keep your family ready for the crisis situation is by maintaining all policies and investment documents safely in a physical folder available at an accessible location. You can create some additional prints out of policies for the future. If you want, you may remind them about these plans from time to time and discuss different features getting added or depleted as policies start aging. 

For the digital-savvy world where you want your kids to be aware of the plans, then creating a digital folder on the internet linked with your and your kids’ email ids can be a great destination to keep things ready for your family. These days, the advancement of cloud management systems allows you to get access to your files from anywhere and anytime can be a great digital finance locker. Also, managing a digital finance locker is a piece of cake as all insurance and investment companies provide digital copies on email within a fraction of a second. Thus you can keep a safe place for your documents. But you must share the access, passcodes, and passwords with your children and spouse to gain the access.

Conclusion

Being secretive about your future investments and schemes is fine but keeping them a secret can be a loss as well because if the beneficiary, themselves are not aware of them then how will they take the benefit of them. So next time when your spouse, kids or parents ask you what you thought about the future then be open and transparent to them as it will be good for their safety.