There are many such misconceptions related to personal finance, which harm people. It is beneficial to know about them. Many people fall prey to them. By this they do their harm. Some people believe that even after retirement they can buy insurance. Some find it very safe to keep money in government schemes. Buying health insurance is an expensive deal for many. These are just a few examples, the list is long. We are telling you about four such big misconceptions.
1. Insurance is necessary even in old age
Many people do not know the true meaning of insurance. Some think it is a saving instrument. Many people think that it can be bought at any age. The reality is that insurance is not a saving instrument. If you are also using it for saving then you are doing your loss. The purpose of insurance is to provide protection. It gives financial security to your family. That’s why it is needed more when all your responsibilities have not been fulfilled. This includes the education of children, their marriage etc. Once these responsibilities are fulfilled, you become quite financially free.
Also read: Jio’s cheapest and best plan, 28GB data and unlimited calling for just Rs 7 per day
2. Home loan can be taken after retirement
Home loan helps you to buy a home. If you do not have a lot of lump sum money, you can buy a home by taking a home loan. Then every month through EMI, you can pay that money and the interest on it. In this way your home loan gets wiped out in 15-20 years. That is why it is important that you should take a home loan as soon as possible after getting a job. This gives you more time to repay it. Banks also check the source of your income before giving a home loan. Therefore, taking a home loan at an early age does not make sense.
3. My money is safe in government scheme
Many people feel that money should be kept in government schemes only, because it is the safest. Such people do not care about the return on money. Such thinking is not right. In fact, due to inflation, the value of your money continuously decreases. Therefore, if the return from your money is not enough, then understand that the value of your money is decreasing instead of increasing. As safe as government banks are, there are strong private banks as well. Schemes of companies like mutual funds are also safe. So it is wise to earn good returns by keeping money in them.
4. I can avail reverse mortgage facility at my home
This is in a way the opposite of a home loan. In this, you can sell your house in advance and run your expenses with the income from it. The bank buys your house and pays you for the installment every month. The special thing is that you get income every month while living in your home. But, it should be the last option of the individual. If you have a wife and children, then you should not take a reverse mortgage facility. Home is a big asset, which will be useful for your wife and children.
,