Father’s Day is almost here, and it is an ideal time to bestow your father with the love and care you always wanted to. It’s also a great time to talk to him and learn about various life lessons, including financial ones.
There are many financial questions you can ask your dadincludingvarious investment options for senior citizens. Answers to these financial questions would help you plan your own financesas well.
So, here are five financial questions you can ask your father on this Father’s Day:
1. What kind of insurance do you have?
This is the first question you must ask your dad. You should know the quantum of life insurance coverage he has. A robust financial instrument, life insurance helps you and other family members stay financially independent and meet various liabilities in case of an unfortunate event.
Find out the type of insurance taken by your father to secure the family’s future. Though endowment and money-back policies have maturity as well as death benefits, nothing beats a pure term insurance when it comes to protection.
Offering a large cover at an affordable premium, a term insurance offers robust financial fortification in case of an unfortunate event. Note that the life insurance coverage should be at least 10-15 times of your father’s annual income.
Along with life insurance, find out about the health insurance coverage opted by your father. With medical inflation pushing up healthcare costs, health insurance is of paramount importance. Ask your father if he has a family floater plan covering all the members of the family? If yes, know the coverage it offers and how to use it when the need arises.If your father is covered by his employer, know about the coverage offered.
2. Where have you invested your money for addressing various life goals?
Once the question related to protection is answered, it is essential to know the instruments where your father has invested money for addressing various life goals. Your father should have a diversified portfolio to compoundwealth for various life goals. While investment in equities helps to generate inflation-adjusted returns, fixed-return instruments such as fixed deposits protect the corpus from dipping during market fluctuations.
Non-banking finance companies (NBFCs) generally offer higher FD interest rates than the market average. For instance, Bajaj Finance Fixed Deposit offers 8.40% returns on investment. Using an online FD calculator, you can calculate the returns offered by FDs. Note that if your father is a senior citizen, he can earn higher returns as fixed deposits for senior citizens offer higher returns than normal deposits.
Additionally, Bajaj Finserv also brings pre-approved offers for personal loan, home loan, EMI finance on different products, and other financial services. This simplifies the process of availing financing and helps save time.
3. Haveyou built an emergency corpus?
A common advice given by financial planners is to build an emergency corpus to shield against sudden job loss or any unexpected financial contingency. Ask your father, if he has an emergency corpus that can take care of the family’s needs for at least 6-8 months in case of anexigency.
If yes, know the instruments where he has parked his money for emergency needs. Find out if they are liquid enough to be used when required. A highly-liquid asset, FDs can easily be converted to cash when needed.
4. Have you planned for your own retirement?
While ideally, retirement planning should start from the very first day when one starts to earn, generally it’s not given much preference. However, make sure you ask your father about his retirement planning. Also, know the various financial instruments where he plans to park his money to ensure a stress-free retirement.
Here again, FDsscore over others as they protect the corpus from erosion due to market swings. Note that tax exemption onincomeearned from FDs for senior citizens has been increased from Rs.10,000 to Rs.50,000.Find out if your dad has invested in any retirement plan as well.
5. Do you have a Will?
If you have siblings, a Will is crucial to ensure hassle-free transfer and distribution of your father’s assets. Ask your father if he has a Will or not and find out how he has planned to distribute his estate.
A Will not only ensures smooth distribution of your father’s estate but also saves you and your siblings from monetary hassles in case of a property dispute.
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