In the movie, Kill Bill 2, The Bride gives Bill the fatal Five Point Palm Exploding Heart Technique punch, after a brief chat, Bill stands up knowing that he is five steps away from death. He wipes-off the trickling blood, straightens his clothes and asks, “How do I look?” she replies, “Ready”. Striking isn’t it!
One needs to be ready for the inevitable fact of death in two ways — psychologically and financially. Death/debilitating illness of the breadwinner while psychologically shattering, can be devastating financially for the family. Sadly this is more common than rare. What can one do to avoid this? For starters, buy life insurance to cover for life’s major goals like children’s education, marriage and retirement. Buy additional personal accident, medical covers factoring employer-provided insurance.
Another oft repeating saga is the person who left or got incapacitated, had actually ‘prepared’ for his state, but did not keep the family informed. The solution for this is to record everything including physical location of documents. The spouse must be made aware of all documentation. Ensure all accounts that are forced single-holder like EPF and PPF have nominations filed. Where possible, like with banks, opt for ‘either-or-survivor’ joint account with the spouse. This makes any joint account easily controllable by the spouse.
Keep an emergency fund worth at least six months living expenses, including payments like school/college fees. Milk, groceries, veggies, fees all need to be paid in time and in cash. Emergency fund would cater to such essential needs.
Next is to warn the family to beware of agents. They hound the spouse with “investment ideas”. That, when the family is not psychologically prepared to understand let alone analyze investment options, is the worst time for making investments.
Last but not the least, don’t forget the employee provident fund. If one is lucky, the employer has a PF trust. Else, the spouse has to go to the EPF office where the deceased had PF account and claim the accumulated PF. Many don’t, as a result the EPF trust is sitting on thousands of crores of unclaimed monies. Educate the spouse on this aspect. Be prepared.
The author writes commentaries on contemporary financial, business, taxation & political issues.