A financial plan can protect one from terror

Written by Lokesh Nathany | Updated: Nov 30 2008, 07:27am hrs
He feels, The first thing people need to start doing is be aware and care for their own protection and safety. We need to be attentive and alert in public areas and safeguard ourselves as best as possible. On the financial front, Indians need to wake up and start bothering with wills. There is no will culture present here, people do not have nominees clearly defined in their wills or registered as a nominee and this causes problems for the deceased family, with excessive paper work added to their stress levels.

The nominee should also know what investments have been made, where are the securities, what are they, what are finances available to the family and what investments have been made, which can help them. This is often seen in families where the man has made all of the financial decisions and his spouse has no knowledge of the same, leaving her very vulnerable and ignorant post the death of her husband. Also, ones family members and nominees should have someone to turn to and a trusted attorney to look towards in times of a death.

Another aspect to protect oneself from such unforeseen instances is an insurance cover. While insurance is not as alien a concept as wills, the level of insurance in India is still way lesser than it should be. While life insurance is still popular here, general insurance to protect ones house, property, etc is under used

In terms of insurance too, personal and household insurance are both essential and very important. People need to assess their HLV (human life value) and cover as much of it as they can with their insurance. There are also specific policies being made for terror attacks and one should safeguard themselves with those too. One may be a regular investor in equities and mutual funds, however, investing in health insurance and life insurance are far more important.

Post insuring oneself adequately, one should look to other investments like mutual funds and the like. Safeguard first and invest later should be the motto for todays financial planners and people going in for such services.

It is really distressing to see what has been happening in Mumbai, the terror attacks, the uncertainty in life and the complete lack of planning from all fronts. The incident has shaken up everybody and hopefully will bring about change, in peoples approach and view.

Zankhana Shah

She says, The risk in this case first and foremost is of life. People are always worried about their families and more so after seeing such uncertain calamities. This outlines the need for the right amount of general insurance and life insurance, which people require. Especially at a personal level, life insurance is very important and necessary. This is more so due to the fact that in times like this, insurance cover maybe worth a lot more than equities that someone has invested in. Also, during an emergency, life cover offers the best protection for ones family.

Insurance is also a very essential part of a persons financial plan and hence one should not sideline it ever. Life cover is relative and need-based, as sometimes the really rich may not need life insurance at all. However, financial planning is none-the-less important, especially for effective risk management. All uncertainties have a major financial impact in ones life and people should plan for these as best as they can.

Basic insurance policies to safeguard ones life, health and property are a must and should be prioritised over other investments.

Like I had mentioned earlier, the financial planning that one needs to undertake to best protect themselves and their family varies from person to person. Say in the instance of a businessman, choosing the right successor and naming the person in the will is very important. This will safeguard your family, business and property. Financial planning overall should be an ongoing process. Also, in the instance of wills and sudden death, the family member must be told whom to approach in case of emergencies. Whom to trust and who to turn to for advice, are as important as knowing the contents of a will for the family. While the recent terror attack was a wake up call for people, there are always dangers that are present in society and we should have started planning our finances as best as we could way in advance. Bankruptcy, suicide and family suicides are all bad.

The terror impact has had a larger impact than any of these stories that frequently appeared in the news, and now it is time to plan better. Ironically, while I ask people to financially plan themselves as best as they can for themselves and their family to be provided for in the most trying of times, planning at all levels from the government to the individual to the company are all important. The more organised a person is, the more process-oriented they are, the better off they will be to handle uncertain and tough situations like this in the future.

Ranjeet Mudolkar

He categorically states, It is a sad thing, the terrorist attack in Mumbai and of many things that come out of it, maybe people will also start appreciating the importance of financial planning. Financial planning is an every season fruit and not something you turn to in case of emergencies. The lack of it and ignorance in India is shocking. For instance, when a person is opening an account with a bank, something as basic as nominating someone to take over your assets and account is looked over and often left blank. Insurance too is not an investment but very important for people to adequately cover themselves. And above all, all the details like proper documentation, nominations in business/property/ ventures/bank accounts, the all important will, should be known to a lawyer or someone else whom you implicitly trust. This will protect the family in times of a crisis and emergency. Actually preparing the will and estate planning are extremely important in financial planning so as to ease the process of your heirs getting whats rightfully theirs as well as efficient handling of the transfers, without administrative delays and stressful paper work to deal with.

Another aspect of insurance, which people should take seriously, is to cover themselves against loans post their death. This will ensure that post death, if there are loans pending to be paid, the deceased family will not be burdened with the same. None of these concepts are new and one should not need such a situation to occur before things like financial planning, estate planning and insurance are taken seriously. For example, when a person changes jobs, they need a medical sickness certificate, which they ask for in order to show the new company. This medical certificate can be obtained via a series of medical tests and procedures. Similarly, if one was to need a financial sickness certificate, he too would have to first go through a series of tests/norms and procedures before he knows his true financial condition.

The most essential steps in financial planning for the worst of situations are:

1. Having the documentation in order.

2. Knowing if you are adequately covered in case of emergencies

3. Checking if you have a nominee for all your accounts .

4. Having all the types of insurances to be covered as best as possible.

5. Making a properly prepared will in order.

We have all seen the terror attacks . What if say some of the people who died had a lot debt they had taken. They had a house loan to take care of, bank accounts opened with no joint accounts or nominees. These realities will make the lives of their families far worse than the immediate tragedy, and this is what we should try to protect ourselves against.