After completing his MBA at a top business school, Raghav landed a great job. Being in India’s top percentile of salary earners, he could afford a lifestyle most people can only dream of. Over the years, he built his career, started saving for his retirement and other goals, and secured his family’s future by buying hefty insurance coverage.
He felt that everything was under control and that there were no gaps in his financial future. But as a 35-year-old high-net-worth individual, he had not yet made a will. He assumed that buying insurance would be enough to cover his family if something happened to him.
There are millions of others like Raghav who have similar blind spots in their finances.
What most people don’t know is that these blind spots show up in places they didn’t think of. They hide in the paperwork signed years ago and never revisited, or the money talks or legalities that are postponed, just like Raghav did.
For high earners, the risk doesn’t lie in poor investment decisions; it is in the structural gaps. If, like Raghav, you too have ignored these gaps, here is what you need to do to take control.
Write a Will
Raghav was under the misconception that writing a will is for the elderly. He thought he would make one when he is ready to retire. While speaking with his lawyer, he realised that if he were to pass away without a will, his assets would be distributed to his spouse and children under the Succession Act.
That’s when it dawned on him that he hadn’t accounted for his parents and younger sister. At that moment, he worried that there could be a conflict within his family, in case he failed to safeguard everyone’s interests by not writing a will.
As per Indian law, if a person passes away without a will, the assets get distributed according to the Personal Succession Law, the Hindu Succession Act, the Indian Succession Act, or the Shariat Law, depending on one’s religion (/faith). These laws don’t account for your intentions; they follow the succession law.
If you have accumulated assets and property, equity in a start-up, or an investment portfolio, then a will isn’t optional. It’s an act of responsibility towards the family and the people you love. A registered will, drafted with a lawyer and updated after every major life event (marriage, a child, a property purchase), is the minimum standard.
Update Your Nominees
When you open your first bank account, invest in your first mutual fund, or take a term plan, there is a good chance you named your parents or a sibling as your nominee. At that point, it was the right call. But you are married and have a family of your own, which includes your spouse and children, in addition to your parents who are dependent on you. That means it’s time to update or change your nominees.
In India, a nominee is not automatically the legal heir ; they are considered a trustee of the asset until it is distributed in accordance with your will or succession law. If, like Raghav, you don’t have a will, your dependents will have to run from pillar to post to access your assets.
The solution is to ensure you update your nominee(s) by auditing all your financial accounts, insurance policies, provident funds, demat accounts, and mutual funds. And mention it all in your will.
Outdated Coverage based on Income
Most high earners are severely underinsured relative to their actual financial obligations. Take, for example, Mihir, a CFO at a start-up, who has an annual salary of ₹1 crore. Eight years ago, Mihir bought a term plan of around ₹1 crore. It was probably enough for him then, but since then, he got married, had a daughter, and got a high-flying job. Considering he took a bank loan for a duplex apartment in the city, his daughter’s education goals, ageing parents, and a lifestyle that costs ₹5 lakh a month to sustain, that cover was dangerously thin.
A common rule of thumb is that your life cover should be at least 10–15 times your current annual income. In Mihir’s case, the term cover should be at least ₹10 crores. Now do the math based on your income; 10x of your current annual income is your ideal term insurance cover.
The same applies to health insurance. Employers often cap it at ₹5–10 lakh, which sounds fine until a critical illness or prolonged hospitalisation in a private hospital drains it in a matter of days. You must have personal insurance separate from your employer or a super top-up policy of at least ₹25 lakhs.
Estate Distribution
Even if you have a will, you need to ensure your family knows about your assets and can access them. You need to ensure your spouse, children (or any dependents) know all your bank accounts, investments, and insurance policies in case something happens to you tomorrow.
Create a simple document, store it securely, and share it with a trusted person. This list should include all your financial assets, account numbers, and a point of contact. This is probably the most practical thing you can do for the people who depend on you.
Conclusion
Raghav and Mihir did the right thing for their families, and the peace of mind it gave them was enormous. It’s time you take control of your family’s needs and ensure there aren’t any blind spots in your finances. All you need to do is collate your financial details and talk to a trusted person, such as a financial planner or a lawyer, to get everything in place. Also, ensure you communicate it to your dependents, so they don’t have to stress about it in your absence.
