Low yielding insurance plans:
Endowment & money back plans offer very low returns. Policyholder get taken by the projected maturity value without realising that inflation would have eroded its purchasing power.
Surrendering an endowment policy leads to losses, but you save on the premium.
Convert to Paid-Up:
If you have paid premium for 3 yrs, the policy can be turned into a paid-up plan. Premium will stop but the cover continues & you get money on maturity.
If policy is ending in less than 5 yrs, it is better to continue paying premium.
To start with following golden money rules will prove very useful:
1. You don’t drive without learning and getting a driving licence, do you? In the similar way, invest in financial lessons before investing in financial assets.
2. Have a detailed financial roadmap. In the absence of this roadmap you will lose yourself like a stranded traveler in a jungle.
3. You are unique hence choose only what suits you. Blindly copying others is a bad idea.
4. Follow KISS principle. “Keep It Short and Simple.” A simple term plan, a simple mutual fund and a simple medical insurance will work well in most cases.
5. Start early, invest regularly and stay invested. Even the genius like Einstein was surprised by magic of compounding over long term.
6. Always pay your credit card bills before due date. This helps in building good credit records thus improving your CIBIL score.
7. Compare EMI/Lakh for a given tenure instead of comparing interest rates. Creative advertising could also be misleading.
8. Avoid exotic products and derivatives. They are Weapons of Mass Destruction. I don’t need to remind you what happened in USA in 2008.
9. Seek guidance from professional financial advisors like yours truly. Right advice and direction will save you a lot in terms of time, efforts and money.
10. Beware of scams and scheming agents. If anything sounds too good to be true, it usually isn’t true.
The above list is just a starting point.
Educate yourself, attend seminars. And please don’t self medicate, do not venture on your own in terms of your finances.
Hire a good advisor.