LIC Jeevan Labh Plan (Table No.836) – Features, Review & Returns Calculation

LIC Jeevan Labh Plan

LIC (Life Insurance Corporation of India) has launched a new Limited Premium, non-linked, with profit Endowment Plan called LIC Jeevan Labh. This plan is available for purchase from 4th January, 2016.

Around the same time last year (in Dec, 2014), LIC had launched a similar plan called LIC Limited Payment Endowment Plan (table no 830). LIC generally launches a lot of new plans during this time of the year when most of the individuals (considering the salaried individuals have to submit their income tax investment proofs) look for investing in Tax Saving instruments.

Key Features of LIC Jeevan Labh Plan

The main feature of this new plan is, the payment of premiums is limited to a term shorter than the policy (limited premium payment – LPP). The maturity amount is payable at the end of the policy term, or on the death of the policy holder whichever is earlier.

  • LIC’s new plan Jeevan Labh is a traditional plan. It is a non-linked with profit Endowment Plan.
  • Minimum Age at entry: 8 years
  • Maximum maturity age : 75 years
  • Policy Term options : 16 years / 21 years / 25 years
  • Premium Paying Term options : 10 years / 15 years / 16 years respectively.
  • Minimum Sum Assured : Rs 2 Lakh
  • Death Benefit under Jeevan Labh : The policyholder’s nominee will receive; Sum Assured + Bonus + Final Additional Bonus (if any).
  • Maturity Benefit under Jeevan Labh : Sum Assured + Bonus + Final Additional Bonus (if any).
  • Optional riders like Term insurance rider (TR) & DAB (Double Accident Rider) are available.

Example of LIC Jeevan Labh Limited Premium Payment Endowment Plan :

Mr. Paswan aged 35 years, plans to take LIC Jeevan Labh for the term of 16 years and the premium payment term (PPT) of 10 years. He chooses the sum assured of Rs 3 Lakh.

LIC Jeevan Labh benefits illustration example pic

In this case, he is required to pay premium for 10 years only. After the PPT of 10 years, he will stop paying premium but the policy will continue till the policy term of 16 years.

The possible events that can happen are :

  • On Death of Policy holderIf Mr Paswan dies during the policy term, his nominee will receive the Sum Assured + Accrued Bonuses + FAB (if any). After this, the policy will cease to exist.
  • On Survival till maturityIf Mr. Paswan survives till the end of policy term, he will get the Sum Assured + Accrued Bonuses+FAB (if any). The policy will terminate thereafter.

LIC’s New Plan Jeevan Labh– Returns Calculation

Let us consider an example, Mr. Paswan (35 years) wants to invest in LIC’s new plan Jeevan Labh policy. He is not clear as to which is the best combination (policy term and PPT). He wants to calculate return on investment under various combinations of Policy and Premium Paying Terms.

If Mr Paswan opts for Policy term of 16 years and PPT as 10 years, premium is Rs 17,892. Under this option he has to pay the premiums for 10 years. In the beginning of 17th year he may receive the maturity benefit of Rs 3.38 Lakh (inclusive of Sum Assured, accrued bonuses and final additional bonus). The expected return on his investment is around 5.6%.

Like wise, Mr Paswan will get returns in the range of 6% to 7% under different options of LIC’s Jeevan Labh plan.

LIC Jeevan Labh return on investment calculation of returns pic

(Click on the above image to open it in a new browser window)

Should you invest in LIC Jeevan Labh Scheme?

We are at the fag end of the Financial Year 2015/2016. People generally rush to buy tax-saving plans at the fag end of a financial yearIf I have to do my tax planning and investment planning now, I will surely ignore this plan. The premiums paid on LIC Jeevan Labh policy may give you income tax benefit under section 80c, but may not generate decent inflation adjusted returns for you.

I am sure you are now very clear on how much returns can we expect from these kind of endowment policies. Returns of 6% to 7 % that too over a period of 16 to 25 years sounds very low to me. Kindly be aware of financial products before you buy. Let me know your views. Do share your comments. Cheers!

(Kindly note that this post is based on limited information that is available on net. The above details may be changed once more information is available.)

You may like reading my article on : LIC’s 2015 all plans list – Snapshot & Review.

About The Author

  • Supriya Singh says:

    Hi Sreekanth,

    i recently spoke to LIC agent and he suggested me for jeevan Labh. have to pay 7,363 Rs per month till 10 Years and 16th year i will get 19,44000 Rs. in between i die then 10 lakhs life cover is also there. +10 lakhs more if died in any accident. After reading your suggestions below i am confused now. what should i do as i asked the LIC agent to come and pick 2 months premium this Saturday.
    I am 36 years old and have 2 kids (5 and 7 years), to secure there future i planned the above.

    i do not want any life insurance cover, i just need a better return but not very long investment than 15 years.

    Could you please suggest me any plan, where i can invest monthly and get better maturity amount?

  • Ashok Kumar wadhwani says:

    please suggest
    my age is 28 and I want to invest 60000 yearly and I don’t want to take risk.
    I am confused between Lic Jeevan Labh and PPF…….
    any help will greatly appreciated
    thanks

  • vicky kumar says:

    HI,
    I have taken LIC Jeevan Labh plan for 15(21) Years. I have to invest 27190 + service tax Half yearly till 15 years. After 21 years they will return nearly 21 Lakhs. My current age is 25 years. Is it right plan for me?

    I have already availed this plan in 2016.

  • MANI says:

    DEAR SRIKANT,

    IT IS NOTICED THAT THE CALCULATION OF IRR IS SOME MISMATCHING. PLEASE SEE THE RETUN BELOW CALCULATED FOR 47 AGE AND FOR 15 YEAR PREMIUM PAYMENT AND MATURITY AT 21 ON JEEVAN LABH.

    1 12450
    2 12225
    3 12225
    4 12225
    5 12225
    6 12225
    7 12225
    8 12225
    9 12225
    10 12225
    11 12225
    12 12225
    13 12225
    14 12225
    15 12225
    16
    17
    18
    19
    20
    21 -417400
    IRR 9.71%

    REQUEST TO PLEASE RECTIFY YOUR ABOVE STATEMENT IF YOU REALIZED

    • Dear MANI ..May I know your assumptions wrt Bonuses (FAB & SRBs)??
      I am confident that my calculations are correct with the mentioned assumptions.
      There is a mistake in your calculation, the maturity amount is not paid in 21st year, it will be paid in 22nd policy year.

      • Mani says:

        Dear Srikant

        I have taken the maturity and bonus rates as per your assumptions only. The insured is getting the benefits on 21st year ending hence the calculation is right. Nothing personal or argument in this regard. The formula used for calculating in excel is =IRR (SUMA1:A21) on 22nd row. Please once again check the same. If required I will send you the excel calculation on your mail. Thanks Mani

        • Dear Mani,
          Oops! definitely nothing personal here! this is purely a knowledge sharing platform.
          Kindly note that the policyholder’s age is 35 years in my example.
          Also, the premiums are paid at the beginning of the policy period. So, the maturity amount is paid at the end of the policy period, so it is 22nd policy year beginning and not in 21st.
          Do share your calculations – my email id is sreekanth @ relakhs.com

  • Srinivas says:

    SIR,

    Thank you for writing on LIC new policies. Please write about other PRIVATE INSURANCE COMPANIES policies also.

    It looks like they are taking more money from people and giving less benefits than LIC.

    I found LIC jeevan aanand is good policy…….> I NEVER found such policy WITH PRIVATE INSURANCE COMPANIES.

    SIR PLEASE COMMENT ON PRIVATE INSURANCE COMPANIES POLICIES ALSO. SO WE CAN EDUCATE.

    Thank you……..

    • Dear Srinivas,
      Though the topic is about LIC policy, in general I have always suggested/mentioned all Traditional life insurance policies…
      Different companies may come up with different kind of Plans, let’s keep it simple,
      If an individual’s requirement is to get adequate and affordable Life cover, can consider buying a Term plan.
      For investment / wealth accumulation purpose for long-term, there are better alternatives than investing in traditional life insurance plans (of any company).

      • Srinivas says:

        Dear Sir,

        To be frank, I think you are hiding the matter. For normal people generally they will follow traditional policies only…….

        In my view, LIC traditional policies are better than private insurance company policies……..I hope you know it very well..

        Private Insurance companies taking more money than LIC (means premium cost)…….

        so please aware people that LIC is better than private insurance companies. (traditional insurance plans)………Its only my suggestion.

        Thank you…..

        • Dear Srinivas,
          Wht’s there to hide?
          Also, I am not associated with any insurer 🙂
          I advice what is good to my blog readers.
          So, how much LIC traditional policies can give as maturity returns?
          I am not sure if you have understood my views or not. It is advisable to ignore all types of traditional plans, if decent inflation adjusted return is the objective.

          • Srinivas says:

            Thank you sir………I understand your views………Its always better avoid traditional plans, as they give very low returns…………

            Yes. I observed that you are not associated with any insurer.

            I understood that you are saying about LIC traditional policies in general…..

            Thank you sir…..

            Srinivas.

  • JHUMA SAHU says:

    HELLO SIR,

    I ,M JHUMA SAHU FROM BILASPUR (C.G) MAINE LIC JEEVAN LABH POLICY LIYA HAI, MUJHSE HALFYEARLY 6000 /- PREMIUM RASHI LIYA JATA HAI JABKI BOND PAPER ME 5575/- PREMIUM LIKHA HUA HAI . PLEASE AAP MUJHE SAHI JANKARI DENE KA KAST KARE.THANKS

  • PRAVEEN D says:

    Message from lic adviser me give to jeevan labh plan of term of 25 years monthly installment around 8000 p.m/ and we will get 9600000/- my age is 31 i have already have jeevan saral plan

  • rudolf melrick dsouza says:

    i am 24 years old,is is it jeevan labh suitablr for me?

  • donabel vickerman says:

    Thought-provoking suggestions . I was enlightened by the facts . Does someone know where my business would be able to get ahold of a sample My Life Planning Workbook version to fill out ?

  • Arpit says:

    I want to investment for tax save as well want to more return.

    which option is best lic, FD or any other option

  • venkat says:

    Hi I invested in Jeevan Anand for 5 Years with the amount of 16,242 Yearly and I want to with draw due to some Financial reasons
    May I know what is the maturity amount I wil be receiving as the PPT 15 Years

  • Nayeem says:

    Your blog is awesome, I did MBA- Finance from reputed B-school. Love your work & idea’s.
    Understand: Insurance & wealth creation two separate things. thanks for educating people.

    I (27) just had one thought & want cross check with you before implementing.

    My Mom age is 51, thinking to take LIC Jeevan Labh policy.
    She is home maker & carries no responsibility.
    Dad is Rtd. state Govt. employee, so they have medical insurance up to 5 Lk.

    “I want to make sure that she(MOM) have backed up assert (insured amount/maturity benefit), & that she can use as instrument to give boost to surrounded people take care of her in future.”
    It doesn’t mean that I don’t want to take care, But it is good to have some assert in her hand to nominate for nominee.

    It’s kind of power in her hands & not much security is required to protect that.

    I am ready to pay premium. 15 Years premium & 21 settlement. Please let me know thought & backed up with strong logic.
    let me know, If you know any alternative .
    Thanks in advance.

  • Akshay says:

    Hello sir
    My age is 22+
    I can invest around 1 or 1lac50k annually(ie it should have option of monthly payment). Please suggest me some best aggressive assured return plan so that at the age of around 35 to 40 i start getting good handsome money returns monthly.

    • Dear Akshay,
      May I know what do you mean by ‘aggressive assured return plan’?
      If you are looking for periodic payments (monthly) then how can you expect compounding to happen and how can you accumulate decent corpus to again get monthly payments?
      Kindly rephrase your query..

  • deepak says:

    Hi Sreekanth,
    Hope you are doing well.

    I am 30 yrs old married.I want my financial security and death benefit .

    What are the best policies and plans to take for betterment.
    Kindly advise.
    How much i need to invest for life cover and financial security.

  • chandru says:

    Hi Sir,

    my mom age around 45 (not sure) and I would like to take one insurance policy and I am ready to pay Rs. 10000 year (she is house wife) could you please suggested me good sum assurance term policy or non term policy

    note : she already have Rs. 50000 sum assurance lic policy but I would like increase the same.

  • Udaya Poojary says:

    Hello Mr. Sreekanth,
    I have a pure term plan giving protection to my family incase of my absence.
    So is it good to with these LIC plans or should i go with MF, PPF OR Bank FD’s which is giving higher return than LIC policies?
    Please advice.

  • Taral Patel says:

    Dear Mr.Reddy,

    I can see from your reply and advice you are good and you give correct advice too…

    Just wanted to know if i want to invest in any good plan which one you will recommend me to go ahead. My age is 39 years and i have one daughter age 5.5 years. I can invest up to 1 Lack/year.

    Waiting for your valuable advice

    Thanks

  • Vish says:

    Hi Sreekanth

    Thanks for this awesome post. I am just trying to understand the way the returns are calculated.

    In the above example, the total investment is Rs 17892*10 = Rs 1,78,920. and returns are Rs. 3,38,400.
    The returns here are definitely more than 5.59%, in fact close to double.

    Please let me know if I am missing something.

    Thanks

  • Rajesh Savant says:

    i want lic policy for retirment plan & also children plan

  • Himanshu Sondhi says:

    Mr. Reddy,

    Hi my name is Himanshu and i am 23 year old.I live with my father,he is 60 year old & retired from job ,So Suggest me any insurance which is good for both of us & low costing also which i can easily afford it.(range should be 12,000/–15,000/-

  • bhoot raj says:

    Then sir according to ur views what is investment bank FD postal products pension plan’s… according to my knowledge term insurance defines after death….. what about my own life Sir who will feed me…
    ..

    • Dear Bhoot Raj..Do you have any family members who are dependent on you?
      There is very high risk of living too long considering the fact that medical technology is very advanced now. So, the only way to accumulate decent corpus for long term goals like retirement is ‘by taking risk’, to get positive inflation adjusted returns.

  • bhoot raj says:

    Respected Sir,
    Thank u for creating this blog I have invested in jeevan labh n other insurance products for securing my old age if according to many experts I started to analyze every insurance products then where should I invest I don’t believe in high returns but steady returns please advice

  • Ramesh L says:

    Dear Reddy,

    This is Ramesh again, yes I had taken a LIC’s Jeevan Nidhi 4 years back both my wife and me. SA is 8 Lacs, each 4 lacs and premium is Rs.4500/- PM (both inclusive). So, again I am planning for further to increase my retirement amount pls advice..

    • Dear Ramesh,
      Kindly note that there is a purpose for asking you about your existing life cover.
      Do you believe that Rs 8 Lakh is sufficient life cover? Do you believe that you are adequately insured?
      If you don’t think so, you may have to take Term insurance plan. Once you are done with getting adequate life cover, depending on your financial goal(s) & time-frame invest in better products than these pension plans which are more flexible, easy to understand, tax efficient and have high liquidity.
      Ex: Equity mutual funds.

      Read:
      Top term insurance plans.
      Best Equity mutual funds.
      Financial planning pyramid.

  • Ramesh.L says:

    Dear Sreekanth Reddy,

    I am Ramesh from Bangalore, going through your blog porlonged details with Choudhary and others.. bla bla discussions..okay. I am 37 year old, where I am looking out retirement plans like, PPF, RD (very know Co-operative banks giving around 11.25% for 10 years) other banks now a days is around 7.75 to 8% depends. Now, whether can I go for any insurence which has pension plan or elase other investments.

    As I got a mail from know LIC agent who has send me the details chart of LIC’s new plan which has been discussed above Jeevan Labh, where they have mentioned of Rs.5000/- PM over the 16 years the maturity amount will be Rs.2301300/- and also if a client opts for the pension he will be getting of Rs.18698/-. The details given by them as follows:- please read and suggest me how could this benefits to me or not.

    “Warm Greetings from LIC Of India”
    Get a life tie PENSION i.e., 100 years by taking LIC New Endowment Assurance plan Ones.

    The Payment Structure goes like this for 5000 slot of tenure 16 years

    Step 1:The customer has to pay only Rs 5,000/- Per Month for just 16 years.( The first payment can be done Quarterly,Half yearly,Yearly).

    Step 2:After 16 years the client will get Rs 23,01,300/- as maturity amount or he/she can convert this policy into pension policy where he/she will get Rs 18,698/- Per Month for 100 years and the maturity amount will be given to your nominee.

    And also

    Benefits of this Policy:

    1.)High Returns

    2.)Free ridder’s like normal and accidental risk coverage from the first day (Normal risk coverage 900000/- and accidental risk coverage 1800000/- and it will be keep on increasing till sixteen years).

    3.)helpful as supporting document to take a home/site/flat Loan or car loan by keeping this document as supporting document.

    4.)This policy is 100% Tax free under both the section 80 C and 10(10D).

    5.)This policy can be converted into a Pension plan after maturity Period .

    6.)This plan is purely traditional plan so your money will not linked to any share market.

    Brief about the quotation according to your age with maturity period 16 years :

    Monthly premium :Rs 5,000/-
    Sum Insured :Rs 9,00,000/-
    Total investment :Rs 9,60,000/-
    Returns :Rs 2301300/-
    Pension :Rs 18,698/- P.M till 100 years

    and also they mentioned like this: “India’s No: 1 plan with very good returns and much more benefits. Much better than FD,RD, & PPF Table No: 814,815.” awaiting your kindly reply.

  • krishna says:

    Hi Sir,
    My age is 37, I am planning to take jeevan Labh plan 836 for 8,50,000/- yearly I have to pay nearly 74,000/- upto to 10 years, and the policy will get maturity after 16 year. please suggest me it is good or not for me. My annual income is 4.2 lakh.

  • Mukesh says:

    Hi,

    i want to take plan of LIC LIC Jeevan Labh Plan (836), any guys suggest me how is plan.

  • Amit Tyagi says:

    @Srikanth Reddy,
    Hope you are doing well. I got call from LIC about JEEVAN ANAND & that are saying that there are guaranteed 9 % return & no market risk.
    Is it the good policy or not.
    Plz let me know.

  • Palash says:

    Hello , Sir
    I want to let you know that last year I had applied to PMJJY Scheme under SBI LIFE. But the bank has send me a another policy documents naming SBI LIFE SUBH NIBESH. When I contacted them they said that Your PMJJY premium has not been yet credited, so your PMMJY is not applicable as of now.
    My Q to you that Does Subh Nibesh plan and PMMJY are the same?
    or SBI LIFE has frauded me in the name of PMJJY applying to theirs POLICY TERM ?.??

  • Padmalochani.V CFP says:

    Excellent presentation & you have a lot of patience to answer to such comments. The agent actually did more damage to his company image rather than giving the positive factors about the product & the insurer’s past performance on bonus, claim settlement & service. In fact, 7 to 8% on a long-term debt product could be reasonable if it is guaranteed (even though inflation is higher). The reason being, even the debt product returns keep reducing (example-NSC) as time proceeds. But, it is the objective of the investor, his age, risk-tolerance, time horizon to goal & lot more factors to decide the investment avenue. Let them be clear about it.

    • Dear mam,
      The key-point is ‘guaranteed percentage points’. LIC can guarantee bonus payments but they can not guarantee the % on these kind of plans.
      PPF can be a better ‘Debt’ option.
      I completely agree with you that as long as the investor is well-informed and buys financial products as per his/her requirements, our mission is accomplished.

  • joydeep choudhury says:

    Sreekanth Sir and Bhandari Sir……Do you actually work in a Life Insurance Company ? Bhandari Sir you are saying that my talks are non sense- How many Death claims have you settled…? How much life inurance have you got ? Bhandari Sir… You are from Rajashn…And the BJP govt. has cheated farmers of Raj in the name of Krishi Bima…Srekanth Sir has not been able to provide me with a suitable answer…He is looking at one aspect of the game- The maturity aspect……. An insurance product is called a policy because it can be customised according to yor rneeds…. I swear I will never visit this site again…. But before I go….. Let me tell u all- SBI employees now a days stay away frm SBI life…. and dont behave as if you people are the most brillint minds in India……Service tax has been imposed on Life Insurance products but not on PLI…..Before saying you have been cheated by your agent, Bhandari Sir- how much you know about Maths and Financial prducts…. Let me ask u this…One is written as 1…Two is written as 2 ( these are but symbol) Nine is written as 9,which is again a symbol…but Ten i written as 10 , 1 and 0 and now tell me how can Ten be writen using two symbls 1 and 0…
    Just make life insurance mandatory and these posts would just disappear……….Adieu…And Bhandari Sir before calling me non sense, have some sense……

    • Dear Joydeep,
      If I give too much importance to ‘maturity benefit’ then I do not promote term plans the way I am doing it on my Blog.

      Don’t you think if at all a policyholder decides to invest in these products, maturity benefit/returns is what matters right?
      Kindly be clear with your views and do not mis-lead investors.

  • joydeep choudhury says:

    That’s where I differ…… You are paying a premium of say Rs 10000 for Insurance cover of Rs 200000……Does that mean in case you cease to live your family will get just Rs 200000……? Nope Sir….. Your life cover continues in the day of grace…… Your life cover continues even during the auto-cover period or Claim concession period….. So the actuarial department chalks out the premium after major calculations…..and yes, Reddy Sir…. Accident benefit rates in Jeevan Labh is Rs 1.85 per thousand Accident benefit sum assured……..
    At exit you earn something that’s tax free
    It’s somwhat liquid in the sense that you can take a loan out of it( the loan amount will not be much but paid after 3 years)..And of course, you can assign the policy……… Avail tax benefits……Term plan premiums cannot be paid by the ECS method…. This plan can be paid through hat mode……Term plans cannot be revived….if any one fails to premium in time( earlier term plans did not have the grace period facility but now a day they have )… This plan can be revived within a span of two years from due date…A host of things all clubbed into one…..It is not a must have……. must not something to stay away from…… That’s all fr the day…. Sir…. Stay blessed…..

    • Dear Joydeep,
      Let’s go step by step;
      Kindly first share your answers to 1) & 3) points . Be precise and to the point.

      Appreciate that you finally said that it is not a MUST HAVE product. And I believe that one can stay away from it if expected returns on investment is greater than say 6%.

      • Suresh Bhandari says:

        Sreekanth ji.. I am from a small town here in Rajastan. following your website last 3 months. It is very good and useful.
        Why do you want to waste your valuable time to answer to Joy sir’s non-sense comments?
        His comments reminds me of my agent who sold me all bad policies.

        Most of the agents like Joy sir talk about everything and not about the products which they are selling. Even if they talk, they tell us wrongly.

        request you to keep informing us through your articles and may god give you lot of good health.

        • Dear Suresh,
          Thank you for your kind words.
          All my blog readers have the right to share their views/criticism here. So, no issues with Joydeep sharing his comments here.
          I have great respect for ‘insurance professionals’. It is indeed a very noble profession.
          Unfortunately, even most of the well-informed or educated agents are not presenting the right picture to their clients. That is my real concern.

  • joydeep choudhury says:

    Sir , let me ask one and all a very simple question? Why is an insurance product called a Policy….? Why not a scheme or simply insurance product……It is also called a Plan…? Reddy Sir….. Since I have two Term plans, I am definitely not opposed to Term Plans…..Pls answer my question just for my enlightenment…. No offence Sir…. I trust CFPs are doing a good job…… and I do respect you people………..

  • joydeep choudhury says:

    Simple because…… it is an insurance product……and to be honest as far as my 16 yrs experience is concerned, most of the non early death claims occur in claim concession period….. And yes, this plan has this benefit……. Term plans do not have Claim concession facilities……. One more thing……why should Ins cos pay maturity claims…..? Simply because insurance is based on two tenets:
    1. Living too short
    2. Living too long
    One can take the maturity in the form of pension/installments that too on Half yearly basis and earn 6 per cent extra on Maturity value………
    One more fact is I pay nearly Rs 13000 for my 4 wheeler insurance for Sum Insured Rs 700000…… Now Term plans 1 crore cover in Pvt Ins Cos cost less than that……. Have you ever questioned this…..?And Sir u r saying that LIC Term plans cost more…PMJJY insurance cover 300000 premium yrealy 312…Human value nothing compared to vehicles…..? Thanks and Good nyte…….

    • Dear joydeep,
      You have not yet answered all my previous questions??

      Three more questions –
      1) What is ‘an insurance product’? Let’s get to the basics 🙂
      2) Why dont you compare term plan premiums of LIC with that of other pvt players? Or may be with SBI’s?
      3) If insurance is based on two tenets,
      Living too short – Don’t you think it is better to take term plan than investing in this low-yielding products, so that policyholder’s family can continue
      same standard of living when breadwinner of the family is no more (god forbids).
      Living too long – Don’t you think it is wise to invest in other high-yielding investment options to generate risk-adjusted/inflation adjusted returns to create
      long-term wealth.

      It is clear that you are contradicting yourself, conflicting views 🙂

      • Pradeep says:

        Hi Sreekanth,
        The point 3 above just nailed this whole conversation in favor of Term Plan + MF completely.
        Just to sweeten “Life is Too Short” point, a family gets large sum after paying only a small and affordable premium (especially for a lower middle cost family) every year on a term plan.

        The most annoying thing about LIC endowment plans are, they make tall claims in benefit illustration of those products like 8% returns. But if we look back at the bonus rates year after year in the past 15 years, there is not even 1 policy that paid anything close to 8% and there were some super bull markets like in 2014.
        Also to woo the poorer families, their Sum Assured illustration only show small amount like 100,000 because only for that amount the premium is lower and it gets insanely higher as the sum assured increases. What can a family do with Rs 100,000 in this age when the breadwinner goes? Its even worse when you get this money 15 years later.

        I know one LIC agent who could not explain me their illustration XLS for a product. He was simply unaware of the calculation behind the returns mentioned there. He just said, it was downloaded from LIC site. LIC pays big commissions to these agents to cheat people.

        The government lets the big PSU companies bleed for their own greed and then use companies like LIC to bail them out as part of disinvestment where LIC is forced to invest. Finally people are the ones to suffer in this vicious cycle.

        May God bless hapless people of India…

        • Dear Pradeep,
          The main issue with most of the agents who share their views here is, they talk about everything except the product(s) which are being discussed here.
          They express contradicting views and try to mislead the investors.
          Anyways, thank you for endorsing my views and sharing your opinion. Keep visiting 🙂

  • Venu says:

    Hi SRIKKANTH,
    I am new to ur blog. I have no idea about SIP mutual fund. I want to invest in ELSS MF for Rs2000/month. Pls advise how to start, which office in Bangalore I need to approach directly. OR how to start thru online

  • Joydeep choudhury says:

    Reddy Sir,
    Let me also inform you that Edelwiess Tokyo Insurance had last year repudiated two large amounts of Term plans…. And according to an IRDA report 60 per cent of the claims repudiated by Insurance companies ( LIC included ) are but Term Plans…….LIC has instructed its officials to underwrite Term insurance proposals with double accuracy and Has imposed restrictions on Term Plans to Politically exposed persons ( PEP) as per RBI guidelines…..and Key man Term plans were sold to lots of companies by Pvt Ins Cos and now Ins Cos ( LIC included ) have imposed restrictions on Key man Term Plans…… Sir….. This was done after fraud claims arising mostly out of Term plans were detected…….
    Sir you can take Reliogion out of India…but never Indians out of Religion…… Good day Reddy Sir……Pls don’t mind my words…. I have taken two Term plans to the tune of 25 lakhs to diversify the risks…But Sir, I don’t think Term plans should be the order of the day……. Moreover Sir Reddy, Life insurance is based n to tenets:
    1. Living too long
    2. Living too short
    Hence, Insurance companies have been given the power to sell Pension plns and also now a days Maturity amounts can be taken in the form of settlement options, where you can get 6 per cent extra returns ( Current rate 6 percent )…….
    Thank you so much for putting up with me Reddy Sir……..I mean no offence…… I am just trying to say that Term plans is based on MIN MAX theory…Minimise your premium..maximise your insurance and that theory would mean that Fin Experts want Insurance coverage without paying any premium……Sorry sir once again….. But don’t take things otherwise……. I do respect you people a lot……

    • Dear Joydeep,
      Why do you think ‘Term plans should not be the order of the day……’?
      and why did you take term plans?
      Also, tell me why one should buy JEEVAN LABH plan? Kindly do not beat around the bush. Do justify your recommendation to buy this product based on calculations or facts 🙂

  • Joydeep Choudhury says:

    Dear Reddy Sir,
    What have you done to educate people about the importance of health insurance plans……? which is more important than Life insurance plans…? What have you done to educate people about importance of property insurance ? For your kind information ..yes…LIC invests huge chunks in Equity when the Govt instructs LIC to do so…but your claim that LIC earns huge profits out of it is not authentic……. LIC incurred huge losses from equity investments in FY 2010-11. You said LIC pays pea nuts o its policy holders……. LIC has paid Death claims in flood hit Chennai with out any documents…….. LIC is the highest loan lender in the country…….. And yes PFs give better rturns than LIC products…. I have never known a single Indian who hasn’t taken a loan out of PF…… If you want to lure Indian populace into SIPs and MFs then educate them about these products and I bet you won’t be able to do so Reddy Sir…….Reason……The intricacies of these products won’t creep into Indian brains……. I have never seen you extoling LIC…….And that’s a concern……Have you Sir studied Actuarial Sciences…..? First of all study and then, you may comment…….. LIC claims it has 30 crore policies, mind you Sir, policies in its kitty…. This means approximately 15 crore policy holders….. PVt Ins Cos have not more than 2 crore new faces as Policyholders…That makes the total insured Indian population to 17 crores out of whopping 70 crore insurable population which is less than 25 per cent of th Population…..
    72 per cent of 2 wheelers that ply on Indian roads run without insurance……
    LIC launches products as per the requirements of the Gov of India or the requirements of the Indian population…..not as per the CHOICE of Fin advisers……
    India is basically not a beef eating country but is the HIGHEST exporter of beef in the world…..23 per cent of world beef production is made in India…….
    As far as Jeevan labh is concerned , let me shock you…The Indian masses have given it a Thumbs up….Sir Reddy…I have already sold a few n the opening Day itself……. Yes, Term plans would actually mean Social security…….or Family security…….But the fact is I have to sell according to the choice or requirement of the customer and not at my own terms……Hence, Sir you need to act as Financial Adviser and not as Opinionated Financial Adviser…….Insurance Agents are now a days called Insurance Advisers……But The customer is the king…
    I have a feeling that- make Life Insurance mandatory and I swear Nobody talks ill about your products…..Sorry Sir…I have talked a lot and I do apologize ………. Wish you happy days ahead……. Hope you won’t mind things….. I do apologize again for my audacity…..

    • Dear Joydeep,
      I believe that you have not read my other insurance related articles 🙂
      Kindly go through other articles related to health & personal accident related ones.

      I said LIC pays peanuts with reference to BONUS OR MATURITY payments. Don’t you think that paying 5 to 7% over a long periods >10 years so is way too LOW considering the inflation which is prevailing in the economy? We have to buy insurance for risk cover and not with the view of making PROFITS/RETURNS.

      The govt should make TERM INSURANCE as mandatory one and not these low-yielding products.

  • Joydeep Choudhury says:

    Srikkant Reddy Sir- Are U married ?You must be aware that every couple should have a Marriage certificate and it is a must… But do you have one if you are married….? 99 per cent of couples in India don’t have a Marriage certificate- Reason- Apart from procuring visas and passports there is hardly any place where you got to produce the Marriage certificate..
    According to an IRDA report – 72 per cent of 2 wheelers that ply on Indian roads are without insurance……
    And you are saying that this is a bogus product…… My friend in South india took a dowry of 20 lakhs in marriage….. A person who goes for Term insurance should have Travel insurance, Never take a dowry, Have more than enough Medical Insurance, must insure his properties and vehicles- 2 wheeler or 3 wheeler or 100 wheeler….. You people are here to promote SIPs and Mutual Funds………..Talking ill of LIC will make LIC richer only………God bless u guys….Any product launched by LIC gives you goose bumps…. ha’s terrific…take an anti allergic pill…………

    • Dear Joydeep,
      I am aware that you are an LIC agent.
      Instead of discussing about the product in question, unfortunately you talk about everything expect about it.
      Did I say that this product is a ‘bogus product’, without me saying that it is a bogus one, why do you feel so?
      I am here to educate my blog readers to take informed decisions. These kind of conventional products may make LIC rich but not its policyholders/investors.
      Every year, LIC invests thousands of crores in Direct Equity (share market) and gets huge profits, but pays peanuts to its policyholders (of traditional plans).
      If LIC is getting richer, why is it that their Term plans’ premiums are the COSTLIEST of all?

      Yes, I am here to promote importance of TERM INSURANCE and also mutual funds (for long-term goals).

  • Sourav says:

    Hi Sreekanth,

    Hope you are doing good.

    I got a call from SBI Life agent explaining the plan “SBI Life – Shubh Nivesh” which is a non-linked, Endowment Assurance product. The agent is claiming to give a return of 12% (fixed and guaranteed, special rate, generally between 6-10%) on this product over 5 years of investment. However, I am not totally convinced, per my understanding the rate cannot exceed single digit. Please suggest.

    Regards,
    Sourav Saha

  • Darpan says:

    Hello Sir,
    I want to know about Postal Life Insurance. It’s pro’s and con’s compare to LIC.

    • Dear Darpan..I believe that PLI do not provide Term insurance plans, which is the basic & must have product. They offer mainly traditional plans with limited Sum assured targeting mainly rural population.

  • jagan says:

    nice article and helpful. please continue this good work.

  • Pradeep says:

    What is considered as the death of the insurer?
    1) Accident
    2) Critical illness
    3) Suicidal
    4) Natural disaster
    5) Murder
    6) All of the above

    If it option (6), then why would I need a raider for term and accident by paying extra premium.
    Please clarify this, appreciate it

    • Dear Pradeep,
      For life cover, all we need is a good Term insurance plan. It is prudent to ignore buying these kind of conventional plans.
      As opined by you, term assurance can’t be a RIDER 🙂

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