In many cases, Indians have seen a tremendous amount of unclaimed deposits lying with the banks, financial institutions, corporates, and insurance companies. It happens due to your major financial mistakes at the time making monetary decisions.
Money becomes unclaimed when you, or your nominee, or legal heir do not attempt to claim the amount and when you, as an account holder, do not operate it for a particular period of time. Your key duty towards your family is to make sure that your hard-earned money is accessible by your family in the case of your absence.
Here are a few mistakes due to which your family might have to suffer financially in the case of your absence.
Not making transactions
Your account becomes dormant when you do not use your account or do not make any transaction for a particular period of time. For instance, in the case of a savings bank account, when there are no transactions for the period of two years. A provident fund account becomes dormant when there is no contribution or any other transaction for the period of 3 years. If your account is categorised as dormant, your family might have to face challenges in getting the money deposited in it.
Not filling a nomination form
When you fill a nomination form, your nominee gets a legal right to claim on your behalf. In case of your absence, it helps your nominee in getting all the money you have saved or invested to keep their lives financially stable. No one can console the emotional damage of your family in case of your death, but your right financial attitude can protect your family financially.
Keeping it a secret
One of the most drastic mistakes you can make is not telling your family about all of your investments. You may think of it as a protection yourselves, but financial secrets are the enemy for your family. If they know about all of your investments, they will have access to it whenever they need money the most, in the case of your death. You will never want your family to deal with financial trouble when they have enough of it.
At the time of buying a life insurance policy
When you buy a life insurance policy, it is assumed to protect your family. But, if you do not attempt to fill all the mandatory fields of the application form correctly, your family will suffer at the time of claiming that amount. Your small form filling mistake can put your family in financial trouble for meeting their expenses.
Not digitising your documents
Sometimes, due to the very long-term investments or protection policies, we miss the documents. In the case of your death, your family will not be able to have access to the funds if they do not have any reliable document of it. It is necessary to keep your documents in both physical and electronic form so that your family can have access to the investments and claim it.
It doesn’t matter how many investments you create for your family, if you are not fulfilling all the requirements of the documents and application form submission, your hard earned money will not be going to help your family financially. Avoid these mistakes to give a financially stable life to your family even in your absence.
Anushka Trivedi is a freelance financial content writer. She can be reached at anushkatrivedi.com