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Personal finance and the pandemic: Why you must list all your investments, policies and share with family members

·3-min read

The second wave of coronavirus has inflicted a lot of pain on families across states in India. Daily deaths have crossed 4,000 per day, the mortality rate (daily number of deaths divided by daily number of new cases) is now over 1.

As of May 9, India has lost almost 2.5 lakh people to this deadly virus. A leading US-based global health research body has projected over 10 lakh cumulative deaths from COVID-19 in India by August 2021. In this wave, we have seen many young people, sole bread earners lose their lives.

A lot has been said and written about how to manage one’s personal finances during COVID times. Experts suggest buying a health and a life insurance policy apart from creating an emergency fund to tide over these tough times to protect against loss of life, loss of livelihood and high medical expenditures.

However, one of the most basic and first things to do in such times is often ignored. Many of us operate multiple bank accounts and have investments spanning across shares, bonds, mutual funds, debentures, fixed deposits, real estate, etc. We have health insurance and life insurance policies.

We make all these investments and take these policies so that our family members / dependents do not have to face hardships in the event of our uncertain death.

The money available with various investment instruments along with the lump sum received from insurance firms would help our dependents meet their lifestyle and milestone expenses even after we are gone from this world.

This is the basic objective of making / taking these investments and insurance policies.

However, how many of us have actually shared with our spouse or family members the assets we own and the liabilities we owe? Do our dependents know where we have parked all our money?

Where have the investments been made, which company shares we own, which banks we have accounts with, which are the schemes of mutual funds we own, how many life insurance policies we have?

What is the amount of these investments, cover of the policies, who is the relationship manager or the agent? In most cases, since we take our lives for granted, we keep on pushing these actions to a later date. Jaldi kya hai attitude!

Due to long investment tenures, or/and having multiple accounts, many people forget about their savings and investments. That is why it is also important to make a list of all investments, keep on updating it and sharing it with family members.

Do you know how much money is lying unclaimed in bank accounts, with LIC, with mutual fund companies, with brokerages (in the form of shares)? Any guesses? Around Rs 1.20 lakh crore, break up is as follows:

If an amount lying with companies, mutual funds is unclaimed for more than seven years, it is transferred to Sebi's Investor Education and Protection Fund (IEPF). Investors can reclaim the amount by approaching either the fund house, the company or the registrar.

Similarly, the Reserve Bank of India has established a Depositor Education and Awareness Fund (DEAF), where unclaimed deposits and bank balances of inoperative accounts flow in after waiting for 10 years.

This is not only a India specific problem. 1 in 10 Americans have unclaimed property, like uncashed paychecks, inactive bank or brokerage accounts, safe deposit contents, and more that have been turned over to the state.

So the first thing you need to do after reading this article, in these uncertain times, is to make a detailed list of all your assets, investments and liabilities and share it with your spouse or family members so that they can keep it handy and use it in case of any untoward incident and don’t have to run pillar to pillar.


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