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Who Should Know Your Financial Secrets? Here’s Why It Matters!

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Who Should Know Your Financial Secrets? Here’s Why It Matters!
November 26, 2024

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Imagine you have spent years working hard, saving, and building a secure future. But when you are not around, will your family know how to access these resources? Surprisingly, families often face financial difficulties even when assets are in place—just because they didn’t know they were there! A massive sum of over Rs 2 lakh crore of people's unclaimed money lies trapped with the government, representing the hard-earned savings of ordinary citizens, held in various forms such as bank deposits, insurance policies, provident funds, post-office savings, shares, bonds and corporate fixed deposits (FDs)*. Today, we’ll look at why it’s essential to let the right people in your family know about your finances, so they’re prepared when it matters most.

Why Sharing Matters

Talking about money can feel strange, even with family. Yet sharing financial details isn’t just a practical step—it’s a form of care. Many cases have come up where families, unaware of their loved one’s financial arrangements, missed out on claiming assets. You wouldn’t want your hard-earned savings to become inaccessible simply because no one knew about them, right?

Rajesh Sharma, a 45-year-old father of two and primary breadwinner, had a life insurance policy worth ₹50 lakh. With an active career and young children, he saw this policy as a safety net for his wife and kids. However, he never mentioned it to them, assuming it was too early to discuss such matters. Tragically, after his sudden passing last year, his family was unaware of this policy. They only found out six months later through a routine bank statement, realising how this oversight had left them struggling in a vulnerable time.

Situations like these highlight the need for openness. When family members know what resources are available, they’re better equipped to navigate emergencies without facing financial surprises.

Who Should Know?

So, who are the right people to tell? Well, this depends on your unique family structure and situation. Here are some key family members who might need to be in the loop.

Spouse: If you are married, your spouse is often the primary person to inform. They will likely need access to savings accounts, insurance policies, and even emergency funds in the event of an accident. After all, marriage is about partnership, and ensuring each person knows about the other’s finances creates a stronger, more secure foundation.

Dependent parents: For those supporting elderly or dependent parents, it’s wise to keep them informed about assets meant for their benefit. Parents may be unaware of life insurance policies or other investments set up with them in mind. Imagine their relief when they know you have taken steps to support them—financially and emotionally.

Children: For older or adult children, having knowledge of certain assets can be invaluable. You don’t need to go into every detail, but knowing there’s a policy or investment in place can give them confidence about the future. Younger children don’t need to be aware, but you might leave guidance for when they reach an age where they can responsibly handle the information.

Trusted sibling: Not everyone has a spouse or children. In such cases, a close sibling might be the best choice. A sibling could step in if needed, understanding your financial picture and fulfilling any last wishes. This kind of trust can make a sibling bond even stronger, and it provides a safety net for each of you.

What to Share?

Now that we have covered who should know, let’s look at the “what.” Here are some key areas to consider sharing.

Bank Accounts and policies

Savings accounts, mutual funds, insurance policies—these should be accessible to the right people. For instance, a savings insurance plan could be a key part of your family’s security, so sharing this detail is crucial. The payout from this savings plan will help the family with the immediate and future financial needs. Ensure that family members know about these offerings and their purposes. Discuss how the funds received as death benefit from the savings plan can be used for children’s education, buying property, or to clear any debts.

Important documents

Physical documents can be tricky to manage, but they’re essential. Consider storing critical items like wills, insurance policies, and investment records in a fireproof home safe or a secure online vault. Alternatively, you might use a trusted document storage service that allows for digital backups and easy sharing with designated family members. By sharing this location or access method with a family member or two, you ensure they’re never left scrambling when it’s needed most.

Nominee details

Many people assign nominees to their accounts or policies, but they don’t always tell the nominees themselves. Ensure that your chosen nominee is aware of this role. They should understand what’s expected and be comfortable handling the responsibilities when the time comes.

Emergency contacts

In a crisis, having a point person who knows who to call is crucial. Whether it’s a financial advisor, insurance provider, or a close family friend, listing emergency contacts can provide your family with a quick action plan. It’s one small detail that makes a huge difference.

How to start the conversation?

Money can feel like a sensitive topic, so how do you start? It doesn’t have to be a formal sit-down or feel awkward. You can speak about it in a family conversation about planning or future goals. Say something like, “Hey, I’ve got a couple of policies and accounts you might want to know about, just in case.” Keeping the tone light can make the conversation feel more natural and less like a heavy discussion.

For some, it’s easier to begin by focussing on the benefits—how sharing this information can ease the burden during difficult times. You might even add a bit of humour: “Hey, if there’s one thing I don’t want, it’s for all my efforts to end up as ‘lost treasure.’” When framed positively, this conversation can become a family bonding moment.

Ways to share financial information

Once you have decided who should know, it’s essential to make the information easy to access—securely. Here are some ways to go about it:

1. Create a financial summary - Prepare a simple document listing key accounts, policy numbers, emergency contacts, and the location of physical documents. Keep it concise, and store it in a secure place like a home safe or digital vault.

2. Use digital tools - Password managers can securely store and share passwords to bank accounts, insurance portals, and investment apps. Ensure your chosen family member has access in an emergency.

3. Set up alerts - Many financial institutions offer alert settings. Consider setting up notifications for a trusted family member for important transactions, helping them stay informed if needed.

4. Establish regular check-ins - Periodically check in with your designated family embers to update them on any new accounts, investments, or policies. This also keeps the lines of communication open and ensures they’re aware of any changes.

5. Leave written guidance - Consider writing a brief letter explaining your financial setup and intentions. It doesn’t need to cover every detail but can provide a roadmap to your financial structure, giving your family peace of mind.

Conclusion

Opening up about finances might seem daunting, but it’s a powerful way to show your family you care. By letting the right people know, you are ensuring they won’t face uncertainty when dealing with life’s challenges. Just like planning for a trip or a big event, preparing your loved ones with the financial information they need provides them with confidence and security.

Your family doesn’t need every detail—just enough to feel secure. Why not take five minutes today to make a list of your key policies and accounts? It’s one small step toward a lifetime of peace of mind.

Source:

*https://www.moneylife.in/article/forgotten-wealth-of-ordinary-indians-over-rs2-lakh-crore-locked-in-unclaimed-assets/75023.html

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ARN: ED/11/24/17996

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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