Planning the financial needs for the family is one of the most important things that an individual should do when he has a family. There have been various cases where the financial provisions have been grossly inadequate as most of the savings have been eaten away by things like health disasters.
Here are a few ways in which you can financially protect your family.
Robust health insurance coverage must
Critical illnesses can take a toll on your financial health. For example, fighting a disease like cancer can be financially frustrating.
Take a health cover that also includes a critical illness cover. Make sure the health insurance is adequate and covers almost every health hazard.
Nomination on every financial asset is a must
Ensure that you make a nomination on all of your financial assets.
Equity shares without a nomination can be a very tricky affair.
It is best to have a nomination in place. Inform the nominee of the nomination so he might be able to make claims at the right time.
Make sure there is a WILL to avoid disputes
Even if you have just begun a family it is never too early to make a WILL. It's not too difficult these days to get a WILL done and that too at minimal costs.
You do not want a dispute to arrive after your death and deprive the rightful legal heir that you intended of a share in your property.
Storing details of all contacts
Keep all contacts of your insurance agent, bankers, agent of mutual fund schemes, solicitor in case he knows where the WILL is and other financial instruments. Hand them over to your nominee. This will make it easy for him or her in case of an eventuality.
Take adequate insurance
Please take a term live cover and not an endowment insurance policy. In a term life cover you get adequate coverage, but the premium paid does not come back. In an endowment policy on survival you get the amount of premiums paid along with the vested bonus back. The real problem though is that for Rs 10,000 a 35 year individual would get a term cover of Rs 1 crore, but in an endowment it may not be more than Rs 1 lakh. So, go for a proper term policy.