Have you ever thought about what happens to your unclaimed funds in banks, insurance comapany, and mutual funds?. Crores of rupees in banks and insurance companies are not claimed nor operated by the account holder. There are several banks accounts accounting to crores just lying there with minimum balance. These unclaimed funds have become a huge corpus fund accounting to Rs 50,000 crores in India.
Have you ever opened multiple bank account and not operated ??. Well, think with billions of people in India how many accounts be like that ?. Do you maintain the details of all your bank accounts? And, if you have not informed your closed ones all this money will come under unclaimed funds.
In india many take life insurance, pay the premium but do not inform any of their family members, and no proper details on the nominees. LIC of India alone holds more than Rs 10,000 crores which are unclaimed by the policyholders.
Unclaimed funds have become a huge problem, as several policyholders do not claim the maturity fund from the insurance companies. Several policies are not given to the nominees because of name mismatch or unawareness of the policy taken by the family members.
In several instances, family members quit the process of claiming the funds due to cumbersome paperwork.
Recently the government informed the parliament, that Rs 24356 crores with the bank and Rs 24586 Crores with the insurance is lying unclaimed.
There were times,when bank employees and insurance agents misused these funds. Since, RBI has become more data-driven, these funds are monitored carefully.
All unclaimed funds with banks are transferred to RBI under various schemes like “Depositor Education and Awareness Fund “.
Unclaimed funds with the insurance companies are transferred to RBI every 10 years to support the senior citizen welfare schemes.
Documenting things is the best possible way to avoid this , maitain a diary or note where you have all your acounts number mentioned.
If possible have joint accounts so that it will be easy for your heirs to operate accounts in your absense.
Document all your insurance policy and update all your nominee details as per government ID.
Declare nominee or have joint accounts in all your mutual funds and stock investements to have a smooth transition in your absence.
Let your spouse or parents know about your investment and insurance policies. Most of the uncliamed funds are accounted due to the unawarness of the policy to the family members.
So true. Our nominees must be aware of our insurance policies.