Question:
We have taken an insurance policy in the post office. After the specified maturity period, they will return the amount we paid along with interest. We cannot withdraw it in between. Can we invest in it with the firm intention that I will not take the interest? Since if I keep money in hand, it gets spent, can I do it for the sake of saving?
Answer:
I think he is asking about life insurance. Because, only in life insurance there is talk of returning the money. If you take medical insurance, the money will not come back. If illness comes within a year, they will cover the treatment. If no illness comes, they will take the premium. If you insure a vehicle, if an accident happens, they will give insurance. If no accident happens, what you paid becomes theirs. The only insurance that gives a return is life insurance.
If you take such life insurance, what will they do? Whatever we save, they will tell us to pay a monthly premium. If you take insurance for 20 lakh rupees, they will divide it and fix a monthly amount. If you take 50 lakhs, they will fix a different monthly amount. As we keep paying, they will add interest to the amount. If we pay a certain amount per month, they will credit that amount and also credit interest for it. Next month, again they will add interest. Month after month, interest keeps increasing on the accumulated amount.
At the time of maturity, if we die, they will give the full amount. If we are alive, we can take what we paid along with interest. If we paid 20 lakhs, they may give 30 lakhs with interest. Even if death happens before completing full payment, the amount will still come. That is called life insurance.
We say this is wrong. Why? Because our money is being saved with them, they are adding interest and returning it with interest. Taking or giving interest is not permissible. So apart from life insurance, you may join other types of insurance if needed.
Based on that, even if you join life insurance and you have no intention of taking interest, you will still be compelled to take the interest. They will make you sign for the total amount. So, you will be forced to receive it. Look into it legally. If there is a way to take only the principal, you may take that and finish the matter.
But you must understand something. If you keep money in hand, it may get spent. But this is not the correct way of saving. Suppose five years ago you deposited 10 lakh rupees in a bank and after five years you withdraw it without interest, they will give 10 lakhs. But the value of that 10 lakh today may be equal to only a fraction of what it was worth before. What you could buy with 10 lakhs then, you cannot buy now. The value would have decreased significantly.
So saving money in cash form is not wise. The correct way to save is to buy gold. Instead of saving as cash, if you receive one lakh, buy 24-carat pure gold coins or biscuits and keep them. Its value will increase more than what you bought it for. You can convert it to cash anytime. There will be no making charges or complications if it is in coin or biscuit form.
If you think of saving, you do not need to put it in such schemes. Even if they add interest and return it, still it will not match the true value of what you invested. You may think you are getting interest, but in reality, the purchasing power decreases. So, saving in that way is not wise.
If you have already entered into such an agreement, you must fulfill it. That has already been explained. But for new people, we say: do not think money in the bank is fully safe. If a bank becomes bankrupt, you may not get everything. Even if you deposit 50 lakhs, if the bank collapses, you may receive only the insured limit amount. So, what will you do then? All your hard-earned money may be lost.
Instead, buy gold coins or biscuits and keep them at home as savings. When it is in coin form, you will not easily spend it. It will remain as savings.