Hello Shrikanth!
Hope you are doing well!
I would like to seek your advice on endowment plans I have taken from LIC to decide whether to continue with them or simply surrender and invest the premium amount in better paying instruments.
- I have 1 Jeevan Anand policy purchased in 2010 with 18 year team and SA 200000. I am paying yearly premium of 12300 for the same and have paid 6 premiums till date.I am thinking to surrender the same and get the applicable amount. As per LIC branch I would get only 51000. I want to know is this a wise decision or shall I continue the policy till 2027 when I will get approx. maturity amount of 360000 as per LIC calculation.
- I have 1 Jeevan Saral plan purchased in Jan 2013 with SA 500000 and term of 35 years. The MSA mentioned on bond is 1000000. I have paid premiums for 3 years so far. I thought of surrendering this policy as well but it seems I would get only 50000 if I do now. Shall I wait for 5 or 10 years terms to complete before I surrender?
- My LIC agent sold me 10 Jeevan Anand policies under the name of pension plan which would mature starting my age 61 till 70 with expected approx maturity value of 600000 every year. I am paying total 3000 premium every month for these policies and term is 35 years. I am currently 28 years old and these policies were purchased when I was 25. I want to know if I shall continue with this or any other options like equity or debt funds will yield me better returns even with tax implications.
- I fall under 30% income bracket.
1 Answers
Hi,
I am doing good, thank you!
1 - If you do not like to surrender the policy then you may consider to make it a PAID-UP one.
Kindly read below article to understand the concept of PAID-UP Policy;
http://www.relakhs.com/how-to-get-rid-off-bad-life-insurance/
2 - Kindly consider surrendering this policy. Isn't it better to amputate finger instead of losing entire hand? Kindly dont compound your mistake. If you invest the saved premium in other better investment alternatives for the same period, there is high probability that you may not only cover up the loses but also can earn decent Real Rate of Return.
"The psychological barrier of losing the money, is stopping many policyholders to exit from these kind of policies. It is better to exit from the unwanted policies instead of compounding the mistake.."
Read:
http://www.relakhs.com/how-to-get-rid-off-bad-life-insurance/
http://www.relakhs.com/real-rate-of-return-inflation-adjusted/
3 - You may surrender. Kindly note that Long Term capital gains (if any) on equity mutual funds are totally tax free.
Read:
http://www.relakhs.com/traditional-life-insurance-plan/
Do you have Term insurance cover?
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Hi Sreekanth,
I need an advice on LIC New Jeevan Anand Plan.
After reading your blog i decided to stop my New Jeevan Anand and went to the agent to convey the same, however , he suggested me some facts which made me think again. Details are as follows
I am 26 year old salaried Employee.I have taken LIC New Jeevan Anand Policy in financial year 2015-16 for a sum assured of Rs. 20,00,000 for a period of 35 years. Yearly premium is Rs.60,000/- paid quarterly(Exact amount 15,193 per quarter).
Comparing Between LIC New Jeevan Anand and PPF.
Now going by the bonus rates declared by LIC in 2016-17.
I have calculated the amount on maturity on the policy.
Simple revisionary Bonus -49
FAB- 2300
Maturity= 20,00,000 + 35*49*20,00,000/1,000 + 2,300* 20,00,000/1000
Maturity=20,00,000 + 34,30,000 + 46,00,000
Maturity=1,00,30,000
Further i will get a sum assured of Rs. 20,00,000 Till age of 100 years.
As far as PPF is concerned: current rate of interest is 8.1 , earlier it was 8.7. Average 8.4
Thus Maturity for Rs. 60,800 at rate of interest of 8.4 for period of 35 years is Approximately Rs. 1,20,00,000/-
Since the maturity amount is almost same in both cases. The Lic poilcy will also cover life insurance plus accidental benefit immediately .Should i still surrender/stop my policy or continue with it.
Thanking you in Advance
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