How LIC policies works ? Bonus, Premiums, Maturity, Loan !

POSTED BY manish ON August 30, 2011 COMMENTS (1,197)

There are so many LIC policies with different names ? For example – LIC Jeevan Saral , Jeevan Anand , Jeevan Tarang and many more LIC policies. So almost every person in India holds some LIC policies, but majority of them do not know how these LIC policies works ?

How does LIC policy work?

How LIC Policies Work ?

Most of the investors just take things for granted and keep dragging the policies assuming it would be the best thing in their financial life. In this article I will show you how Life Insurance Corporation (LIC) policies work and talk about few aspects like LIC bonus, LIC premiums and different other aspects which will help you in understanding how these policies work.

Moneyback Plans or Non-Moneyback Plans

A lot of LIC policies pay you on a periodic basis like at the end of 4th, 8th and 12th year, and then finally at the end of the maturity period. These policies are Money back policies, the example can be LIC Jeevan Surabhi or LIC Komal Jeevan. A lot people get attracted to these moneyback plans because they get money “many” times in between and it looks attractive to them, but the premiums are generally higher for these policies.

Then there are LIC policies which do not pay you back periodically but only pays you at the end of the maturity period. They are generally termed as normal Endowment plans. Some examples are Jeevan Anand and Jeevan Tarang

LIC Bonus & Additions to your Policy

The biggest confusion I see is generally in Bonus by LIC. One thing which investors in these policies don’t know and don’t care for to find out is that there are different kinds of bonuses in LIC policies and they are calculated differently. Let’s see them one by one.

1. Simple Reversionary Bonuses

Generally when we say “Bonus”, it is this “Simple Reversionary Bonus”, which is declared per thousand of the Sum Assured on annual basis at the end of each financial year. This bonus is declared today, but is paid at the end of maturity period only or on death, whichever is earlier. So for example if you hold a policy of Rs 10,00,000 Sum assured and the bonus for this year is Rs 60 per thousand sum assured, then your bonus amount is Rs 60,000 for this year, but you will only get it at maturity (after many many years) or on death, but by then it’s worth would be much lesser than today (this 60,000 today and 60,000 after 20 yrs).

A very important point to note here is that, if you surrender the policy, you don’t get the actual accrued bonus because it’s the future value, you will only get its reduced amount in today’s term and its very less. Also note that you are eligible to get reduced Accrued Bonus only if your policy has completed 5 premium paying terms. (This thread on our forum discusses Jeevan Anand in good detail)

2) Final Additional Bonus (FAB)

There is another kind of bonus in LIC which is generally called as “FAB” or Final Additional Bonus and it’s paid to those policies which are of a longer duration and has run for more than 15 yrs (The premiums are paid for all 15 yrs). This is generally a token of appreciation for being with the policy for long duration. The FAB is generally not paid for policies which have “Guaranteed Additions” (explained below). Here is an indicative list of FAB.

Final Addition Bonus FAB LIC

3. Loyalty Additions

This is again a bonus which is declared for being loyal to the LIC and completing a longer tenure. Generally it’s declared at the end of the policy, but for some policies it might be applicable after completion of 5 or 10 yrs. For example – In Jeevan Saral, the policy holders will earn such additions after a minimum of ten policy years have been completed.  This is usually an amount declared per thousand of sum assured depending on the corporation’s performance. Loyalty additions are totally non-guaranteed.

4. Guaranteed Additions

For a lot of LIC policies there is a term mentioned like “Guaranteed Additions”. These are assured sums which are given to policyholders for a specific period at start or end of some event along with the sum assured at the end of the term. Like for example, , Jeevan Shree-1 policy provides for the Guaranteed Additions at the rate of Rs. 50/- per thousand Sum Assured for each completed year for first five years of the policy. The Guaranteed Additions are payable along with the Basic Sum Assured at the time of claim.

Surrender Value

Most of the people who buy any Traditional Policies from LIC or any pvt companies’ don’t think a bit about terms and conditions on exiting the policy much before maturity. A general assumption is that they will at least get their paid premiums back with sum interest. I have seen so many cases like that where people are literally shocked to hear that they will get peanuts or nothing from their policy if they choose not to continue the policy. Surrendering of the policy works this way –

You will not get anything back if you stop your policy without paying for 3 years. Almost every traditional policy attains minimum surrender value after the policy has run for 3 yrs.

After 3 yrs, if you surrender your LIC policy, still you will only get a small fraction of your total paid premiums that too excluding first year premiums. So suppose you have a policy which has Sum assured of 10,00,000 for 20 yrs term with Rs 50,000 premium per year. If you have decided to surrender your policy after paying 5 premiums (you paid 2,50,000 in 5 yrs i.e. Rs 50,000 each year), then you will get around 30%-40% of 4 premiums paid (first year premiums are excluded), hence the total would work out to be only Rs 60,000 – Rs 80,000 only + proportionately reduced amount of accrued bonus if any (only because you completed 5 yrs, else you will not get this also).

A very important point to Note : A lot of people do not like to close their LIC policies after paying for 1-2 premiums because they will not get anything back for the 1-2 premiums already paid. They think that they will surrender the policy after completing 3 yrs, so that they will get at least something back. This is total emotional decision and not mathematical, because if you do maths you will see that surrendering the policy after 3 yrs is the worst decision if you have already realised that you should not continue with the policy. For example, if you are paying Rs 10,000 premium per year and completed 2 yrs, you paid Rs 20,000, If you close this policy now, you will lose all money (Rs 20,000), but you can save Rs 10,000 as third premium. If you choose to complete 3 yrs and then surrender, then you have paid Rs 30,000 and you will get back 30% of 2 premiums (first year premium not included), so you get back Rs 7,000 (loss of 23,000 as you paid 30,000 and got back 7,000). Do the math if you completed 1 yr only yourself, its more worst!

Note that surrender value is nothing but your future maturity value reduced to today’s value, so if the maturity value is Rs 10,000 after 20 yrs and if you want it before LIC will pay you the Net present value as per today’s term.

Paid up Policy

A lot of times when you have completed 3 yrs of policy, you might not want to get your money back immediately, in which case you can made your policy paid up (just stop paying premium and it becomes Paid up). When you do this, you can stop paying further premiums but you will get your total premiums paid + accrued bonus any at the end of the maturity period. This might work out better sometimes compared to surrendering if you were going to invest the proceeds in some debt instrument.

What are mortality charges

A lot of agents advertise these policies under the head “Free Insurance Cover“, But all the policies charge premium or charges for providing Insurance cover and it’s called “Mortality Charges”, these are the same charges which are there in Term plans and ULIP’s, but may be in a different way, so nothing is free, some part of premium goes in covering you and rest of it is invested in Debt instruments which can give you assured returns at the end of the maturity.

Loan on LIC Policy

You can also get loans at the time of crisis on your LIC policies, but the maximum loan amount available under the policy is 90% of the Surrender Value of the policy (85% in case of paid up policies) including cash value of bonus. The rate of interest charged on loans is at 9% to be paid half-yearly. Is there any other terms and conditions which you dont understand in your LIC policies ? We can all help you understand it in comments section .

Are you looking for surrendering your LIC Policies ?

By now you must have got a good understanding of your LIC policies and how they work. You can find out the return of your policies using the IRR method taught in this article. If you feel that you want to continue your Policies then well and good. But if you feel that you want to close your policies, do it soon because delaying the decision will cost you a lot in long run. I hope its clear to you how your LIC policy works for you .

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1,197 replies on this article “How LIC policies works ? Bonus, Premiums, Maturity, Loan !”

  1. CMishra says:

    Hi Manish,

    I have below 5 LIC policy . I am giving details of current status for each of them.
    Can you please advise me –
    1) which one I should continue with paying premium till maturity ?
    2) Which one I should surrender ?
    3) Which one I should or make as “paid up” ?

    Also please advise for each of the surrenderred or “paid up” policy how much I will get now ?
    Also is this money taxable ?

    Appreciate your quick response . Thanks a lot in advance .
    =====================================================
    Policy#1 : The Endowment Assurance Policy (T.No. 14)

    Policy Start date : 25-Jul-1997
    Last Premium Date : 25-Jul-2026
    Policy Maturity Date : 25-Jul-2027
    Polciy Term : 30
    Premium Paying Term : 30
    Premium : Rs 3,057 per anum
    Sum Assured : Rs 1,00,000
    Premium already Paid : Rs 42,798 (=Rs 3,057 * 14 yrs)
    Vested Bonus : Rs 1,10,500 (As of Mar-2017)
    =====================================================

    Policy#2 : Policy Name : Jeevan Nidhi (T.No. 169)

    Policy Start date : 23-Jan-2005
    Last Premium Date : 28-Jan-2030
    Policy Maturity Date : 28-Jan-2031
    Polciy Term : 26
    Premium Paying Term : 26
    Premium : Rs 10,154 per anum
    Sum Assured : Rs 2,65,000
    Premium already Paid : Rs 1,32,002 (=Rs 10,154 * 13 yrs)
    Vested Bonus : Rs 79,765 (As of Mar-2017)

    =====================================================
    Policy#3 : Policy Name : Jeevan Shree – I (T.No. 162)

    Policy Start date : 23-Jan-2006
    Last Premium Date : 23-Jan-2021
    Policy Maturity Date : 23-Jan-2031
    Polciy Term : 25
    Premium Paying Term : 16
    Premium : Rs 30,535 per anum
    Sum Assured : Rs 6,000,00
    Premium already Paid : Rs 3,66,420 (=Rs 30.535 * 12 yrs)
    Vested Bonus : Rs 1,93,200 (As of Mar-2017)
    =====================================================

    Policy#4 : Jeevan Anand (T.No. 149)

    Policy Start date : 28-Dec-2006
    Last Premium Date : 28-Dec-2021
    Policy Maturity Date : 28-Dec-2022
    Polciy Term : 20
    Premium Paying Term : 16
    Premium : Rs 10,563 per anum
    Sum Assured : Rs 1,50,000
    Premium already Paid : Rs 1,16,193 (=Rs 10,563 * 11 yrs)
    Vested Bonus : Rs 65,700 (As of Mar-2017)
    =====================================================

    Policy#5 : Child Career (T.No. 184)

    Policy Start date : 13-Aug-2012
    Last Premium Date : 13-Aug-2026
    Policy Maturity Date : 13-Aug-2032
    Polciy Term : 20
    Premium Paying Term : 15
    Premium : Rs 6,677 per anum
    Sum Assured : Rs 1,00,000
    Premium already Paid : Rs 33,485 (=Rs 6,677 * 5 yrs)
    Vested Bonus : Rs 15,700 (As of Mar-2017)
    =====================================================

    1. Discontinue all of them. No insurance other than term plan makes sense for most of the people, unless you want the return they will give like 4-6%

  2. Rangaswamy says:

    Hi manish
    In investment view, I’m in your favor.
    BUT, Life Insurance companies never said anyone to investment in life insurance to get better returns on your investments comparing to many other investment options.

    Life ininsurance policy is to secure(in some extent) the insured (the bread winner-income source of family) family members economically, if unfortunately something happened to him/her.

    1.Mr.Chanakya has taken life insurance policy with DAB for his father for sum assured 50L. He has paid 2 premium. If his father dies in third month he will get 50Lsum assured+bonus of any + DAB 50L. Who will give this type of economic security( for self care minds-returns)

    Life insurance benifits in my view:
    1.Savings
    2.Tax savings
    3.Minimum returns
    4.Economic Security to nominees
    5.Peace of mind (economically-after insured/you)
    6. No tax on what you will get back (returns)

    2. Mr Manikya buy a car worth Rd.25L and he will take insurance of Rs.15K to get secure from economic loss of damage to the car if it take place. If in 5th year accident take place, and some part get damage.But insurance companies will pay some percentage of some parts,not for all (fibre parts will be excluded in insurance), sometimes no nothing. If he had not premium to insurance companies, it would have been repaired/replaced out of that. If nothing happens,everything is going well, your premium will be in some HUNDI. For this no returns, no tax savings,less reimbursement than what you have paid, are you happy!!!

    3.Mr. Kumar have invested 10L in Deposits/shares. He will get some thing

    In this case
    1. No Tax savings on investment
    2. Tax on returns
    3. If it is share market if you are in loss you have to imagine yourselves 🙁

    Concl:
    1. Select the good plan which is suitable to you
    2. People highly concerned about things than their life and family members

    Rangaswamy

    1. Hi Rangaswamy

      Thanks for your sharing your valuable comment on this topic. Please keep sharing your views in future also

      Manish

      1. Sanjiv says:

        I like rangaswamy view lic policies are not to get rich.

        1. Jagoinvestor Admin says:

          Thanks for your comment Sanjiv .. Please keep sharing your views like this..

          Manish

  3. gopi says:

    Hi Manish, Is it possible to know how much bonus added to my LIC policy? How?

    1. Just make your LIC login on their website , it will show details. In worst case, file a RTI

  4. Ritesh says:

    I have jeevan anand (T No 149) commenced on 28-8-2003, annual premium 10486, I have paid all within time till date, its showing policy term 73 (premium payment term 21), what does this mean, and what u advice to me for this policy, should I continue paying, should I make it paid up policy or should I remove all money right now from policy
    Can u also calculate how much money I will get if I remove all money now only.
    Thanks
    rag476@gmail.com

    1. just stop it. No other advice

  5. Praveen says:

    Hi Manish,
    in your example of Simple Reversionary Bonuses, you’ve mentioned 60,000Rs for that particular year. if policy term is 20 years for example, then what amount someone gets at maturity ?

    Premium paid (for 20 years) + Bonus (for each 20 years) + other bonus (if any)
    Or,
    Bonus (for each 20 years) + other bonus (if any)

    1. Its Premium paid (for 20 years) + Bonus (for each 20 years) + other bonus (if any)

  6. Raj says:

    hi manish

    is vested bonus is one in the same as accured bonus

  7. Murugesan says:

    Your comment on ROI for LIC policy or other is exactly correct

  8. Atul says:

    HI –

    I have policies like Jeevan Chaya, Endowment Policies, Jivan Mitra, etc from 2004. They have started showing Vested Bonus as well. Annual premium is Rs 20000. Is it sensible to surrender these policies? How about stopping premium payment. I can now understand that the policy term is 34 yrs…. and I am away 22 yrs for maturity 🙁

    Atul.ganorkar@gmail.com

    Regards,

    Atul

    1. Its better to stop premiums and make it a paid up policy !

  9. AchyuthKumar says:

    Dear Friends,
    Investing in any life policy is not a sound investment of your hard and judiciously earned income. The total amount payable by the insurance company of any type of policy will not accounted more than 4% of interest which is equal to the SB rate of interest of the Bank. If we consider the risk element of 1% of the assured amount then it will be within 5% Rate of Interest per year. Most of the agents/companies/Banks speak to you in different manner the Total pay out for any type of policy will not cross 5% rate of interest on your investment. Please check this with the Recurring deposit calculator of any bank or all banking solutions web site. After studying several hundred types of policies and its maturities of different Life Insurance companies I am informing this. You may tale a Term assurance policy of your choice for risk coverage and invest the differential sum in RD accounts of Banks and the maturity proceeds may be either deposited in PPF account of Deposits account. You will get double the amount of your saving through life Insurance companies.If you want to make yourself Fool at a later date.you can invest in Life Insurance companies.

    1. Thanks for your comment AchyuthKumar

  10. Reeshita says:

    Thanks for the clarification. Could you please provide an example of how much one might get for a paid-up policy at the end of the policy term?

    1. I think thats already covered in the article ?

      1. Reeshita says:

        Yes Manish it’s mentioned but I need some help with the apparent figures that one may expect to receive for a paid up policy. I pay Rs. 13010/- per quarter for a 20 year money back policy. Now, if I wish to stop paying the premiums after 5 years but keep it as a paid up policy then after 20 years what is the expected value? The main issue is that how the accrued bonus would be calculated after the premium is stopped and if any money will be received as cashback after 10th and 15th year (not considering the 5th year because till that time premium would be paid hence cashback would be received.)

        1. Hi Reeshita

          That is very specific to the company and how the policy is structured. YOu can get the answer you company only .

  11. sudhir says:

    manish thx a lot frnd .
    ur article must have open the eyes for many common people.
    i was searchg fr such article but ur explaination ws best.

    1. Thanks for your comment sudhir

  12. Avinash Sardesai says:

    Manish, this is very informative article. While most of the policy holders knows about simple revisionary bonus, good to see some table for FAB that I came across for the first time.
    This article gives another interesting message – the benefits offered by LIC are so opaque that it is actually impossible to understand your maturity benefits till you actually receive those, particularly for plans without guaranteed addition, as FAB and loyalty adfition will come into play only at the time of maturity.
    Thanks for putting in so much efforts to clearly demonstrate the benefits through graphical representation.

  13. shyam says:

    I have one ULIP policy from LIC and its ending in January 2017, What should I do to take my money?

    1. Visit LIC office and surrender it

  14. VenkateshBhagavath says:

    Dear Manish,

    I had a LIC policy Bima Nivesh, which got matured this Oct 2015, I see that TDS of 2% is deducted on the maturity amount. I would like to know does this credit of matured amount from policy attracts more tax by considering it to be my income, I mean to say the Sum Assured + compounded G.A. + Loyalty Addition, whatever is credited, will it be taxed again based on my income tax slabs.
    Please help me out if you have any information on this.
    Thanks
    Regards
    VB

    1. Hi Venkatesh

      You can claim the TDS by filing your returns incase there is no tax to be paid from your end

  15. Ritesh says:

    Hello Manish,

    1. I am investing 20652 Rs annually for Jeevan anand policy whose sum assured is 5 Lakhs rupees. Could you please confirm how much money will I get at the end of 25 years maturity?.
    2. Also please suggest any other suitable option for investments other than PPF for retirement planning. Ex: ELSS, RD, Mutual Fund, FD, LIC
    3. How much money a person should invest yearly in PPF, Mutual fund, LIC, RD, FD, ELSS etc and which option is best?
    4. Apart from LIC is this good if we invest Rs 3000 in Birla sun life insurance plans for retirement planning.

    Your quick response will be highly appreciated.

    1. Ritesh

      The simple rule is to invest in Equity based products for long term like Mutual funds or stocks and rest everything for short term ..

  16. Nagarajan says:

    Hi Sir,

    I delayed Jeevan Anand Plan premium payment by 4 days from the actual due date.
    Will this affect my vested bonus(reduction in vested bonus amount accumulated so far)?
    Please note I am paying premium on-time for the past 3 years without delay, only once I delayed by 4 days from actual due date.

    Regards,
    Nagarajan.

    1. It should not create an issue. There is always a grace period !

  17. latha says:

    Sir I am having jeevan saral policy I completed 5years wthh the premium of RS 15000 per year so hw much loan can I get plz

    1. Hi latha

      This is very specific query which you should follow up with the concerned authority only. We wont be able to comment on that

      Manish

  18. Hardik says:

    Hello sir,

    I have Jivan Mitra policy from last 5 years . and my bonus value is 20K.
    SO for coming years my Bonus will be given on My Premium + Credited Bonus ?

    Regards, Hardik patel

    1. Yes, thats correct

      1. Avinash Sardesai says:

        Manish, As per my understanding the Bonus is on sum assured only and not given on any other components. Correct me if this understanding is incorrect.

        1. Avinash Sardesai says:

          I mean neither premium paid, nor bonus accrued are considered for subsequent bonus computation.

        2. Yes, its related to Sum assured, its given as “Rs X for every Rs 1 lac sum assured” . something like that !

  19. vijay says:

    Dear Sir/Madam,

    I have 3 policy from LIC and i paid apprx 6 lakh in Last 8 Years to LIC now when i applied for Loan they are saying total amount is Rs 4.20 lakh and it is just the 65% of the total amount paid.

    Can you let me know why it is so less.

    regards
    Vijay dahiya

    1. Hi vijay

      This is very specific query which you should follow up with the concerned authority only. We wont be able to comment on that

      Manish

  20. uday says:

    Hi Manish,

    What is a term plan ? Is it preferred over Endowmnet plan ? Any good term plan you can suggest from LIC or any other reputed organization?

    Regards,
    Uday

    1. Rupesh says:

      Based on your requirement i can give u a quotation.

    2. We suggest HDFC term plan. Incase you are interested in that . We have a tie up with HDFC and we can connect you with them .. Just fill up the form here https://www.jagoinvestor.com/services/life-insurance

  21. ARKUSH says:

    Sorry , forgot to inform the policy details in my earlier mail .The policy Plan is 162-10-06

  22. ARKUSH says:

    Hello

    I took a policy from LIC in 2006 for Rs.5 lac. The premium payment term was 6 years ( which was paid) and the term of the policy was 10 years. Now in March, 16 , my policy is maturing. Shall be grateful, in case the LIC maturity amount is informed to me( the total maturity amount). No one in LIC including their agent are not able to calculate and inform. Thanks

    1. Hi ARKUSH

      I suggest that you now take the RTI route. You can file the RTI and ask your queries to them. THey are bound to reply you on your queries.

      Its a bit long cut, but works well

      Manish

  23. Sthitapth says:

    Hi Manish,

    Excellent article. But I read it 10 yrs after I took LIC policy:-( Wish I could have read it earlier. I have Jeevan Anand policy with 20 yrs term . I have already paid 10 yrs premium. I spoke to LIC people and If I make it paid up now – I will get around 7 lacs after 10 yrs from now (as some accrued bonus already there). If I continue to pay , I would be paying another 400000 as premium and I would be getting 16 lacs at the end approx in total + 8 Lacs coverage for another some years (as term plan). Instead if I start SIP and invest the same 4L in mutual fund with 12% return rate, I will be getting 8Lacs approx after 10 yrs of SIP. That is 7+8 = 15 lacs Almost same as regular paying policy. But in LIC its guaranteed and in mutual fund is not with risks. Am I missing anything here before I decide or any important info I need to consider before making LIC as paid up? Can you please help me in this.

  24. subramanian says:

    hi,
    I enrolled myself in jeevan anand policy in the year 2014. It’s basic sum assured is 2,00,000. It is a 15 year plan. So at the end of maturity how much amount I will b getting? Can you explain me the breakup?

    1. Hi subramanian

      The best answer you can get only from the agent you invested through or just contact the company. The thing is your case is a bit personalised and other than company, no one can give accurate information

      Manish

  25. SomNath says:

    Hello there,

    I get this article and it’s very knowledgeable really.
    I would like to know something about the Policy. As Can we change Policy terms, Sum Assured and Premium ?
    Is it possible online ? Because Agent can’t get correct details. As I can see in your article. We need maximum 3 years for surrender any policy. But I have opened Jeevan anand 815 for 16 terms and agent said you need to maximum 5 years for surrender policy otherwise you will never get any amount. Is it true ? Please advice.

    Thank You!

    1. From what I know, its 3 yrs .. check your policy documents !

  26. siva says:

    dear manish, iam enrolled to 175 and iam paying the fourth premium this january.there is 10% money back (policy for 10 lakhs)at d end of fourth year. where and how should i collect the money i.e 1 lakh.

    1. Avinash Sardesai says:

      LIC should communicate you regarding the same. It is better if you submit your NEFT details to LIC so that you get the amount deposited to your account.

  27. Ambikesh says:

    Manish,
    Thanks for the information.
    I’ve held multiple policies of LIC for over 12 years now. Recently I got a call about loyalty bonus on fine policy. The caller told me that my agent hasn’t responded and the loyalty bonus will lapse. I talked to my agent and he said that it’s a fake call.
    Would you please elaborate how loyalty bonus is paid and when?

    Thanks.

      1. Ashish says:

        Thanks Ambikesh for asking this question and thanks for reply Manish. I too got similar call today. He too asked me to contact agent for getting loyalty bonus. He mentioned that agent is saying, “I don’t want bonus and LIC can deposit 40% in agents account”. I asked him details about my policies for which he is getting bonuses etc. He didn’t give me details. He asked me to contact him back if agent doesn’t reply.
        Thanks for details provided by you in above thread. Now I understood many things about LIC :-).
        I will now raise complaint under DND against this caller.

        1. Glad to know that Ashish ..

  28. ravinder says:

    Hi
    I have jeevan shree II T No 112 at annual premium of 24981 started in 2000 for 16 years and term is 25 years.. Its status is now fully paid up. What is my best bet now… My husband expired two months back. I need to sort my life now with three small kids daughters all age 8. Please guide me what I should do.

    1. I suggest that you should take all the money and then decide later what needs to be done with it

  29. teja says:

    Hi Manish I want start lic policy what is basic amount per month or year any best policy

    1. We dont suggest LIC policies

  30. christopher says:

    Hello Manish,

    Excellent article.. makes things very clear.. though there is still that emotional attachment that you mentioned. I have foolishly taken an endowment policy paying 1 lakh a year for a period of 33 years.. I have paid 2 years and the 3rd premium is upon me.. agent says I can surrender it only if I pay the 3rd premium.. what do you say? will I lose more or gain if only a little bit. I am ready to walk away from the 2 lakh if you say that I will be losing more than I will gain. Awaiting your reply

    1. I cant decide on your behalf 🙂 . Its a very tough call , but yes getting out of this will make more sense in longer run

  31. Dharmraj says:

    Hi
    I am new to this LIC and investment,

    My simple question is should i buy LIC or not?, If yes then in which ?
    I can go for max 25k(per year) investment.

    1. Its not about LIC or some other company. If you are buying a right product, any company is fine !

  32. Deepak says:

    Dear Manish Chauhan

    I have taken Lic Jeevan Saral 165 in 2011 September . Half yearly Premium of 24260. on Terms of 20 Years. Can you please tell how much will i get after policy complete.Thanks

    1. Hi Deepak

      The best answer you can get only from the agent you invested through or just contact the company. The thing is your case is a bit personalised and other than company, no one can give accurate information

      Manish

  33. Raghav says:

    The article was very insightful.

    Question on Simple Revisionary Bonuses Vs Sum Assured Vs Premium Paid: I have Jeevan Anand plan and have been paying 9k for last 11 years and have 4 more premium paying years left.

    From LIC’s bonus table as of 31/3/15, I’ll be getting about 34k as bonus at end of term. Though my sum assured is 1L and I’ve already paid 1.19L and assuming bonus would be about 34k to 38k per thousand when policy matures, what would the approximate cash that I would get? Will it be 1L plus 34k or something more (I Yes, I will be surprised).

    Regards,
    Raghav

    1. Hi Raghav

      The best answer you can get only from the agent you invested through or just contact the company. The thing is your case is a bit personalised and other than company, no one can give accurate information

      Manish

  34. Mohit says:

    Dear Manish,
    After reading your article I realized the drawback sort of thing applicable in LIC policies.
    I’ve enrolled in LIC 75F Money back 20years policy 7 years back 12600Rs being premiun annually..
    As per policy terms I’ve got 20% money of Sum Assured after 5 years already in my account.
    My vested bonus is 48000Rs.

    I’ve 2 doubts :-
    1) Can i get my bonus now?? (U wrote its only after maturity or death)

    2) Should I surrender my policy now?

    1. Hi Mohit

      The best answer you can get only from the agent you invested through or just contact the company. The thing is your case is a bit personalised and other than company, no one can give accurate information

      Manish

  35. sailesh singh says:

    Dear Manish,
    I had opened jeevan pramukh policy and have completed the premium . Could you please let me know what is the sum or amount of money i will get back after the maturity of the policy, unable to calculate.

    Thanking you,
    Sailesh

    1. Hi sailesh singh

      The best answer you can get only from the agent you invested through or just contact the company. The thing is your case is a bit personalised and other than company, no one can give accurate information

      Manish

  36. Sharmaa says:

    I have Two policies …

    Plan 5 The Whole Life Policy – Limited Payment – 10,398/- Half Yearly.
    Plan 14 The Endowment Assurance Policy – 41,507/- Half Yearly.

    I started in August 2013 with Premium Paying Term 20Y. Now I want to know is it good to continue these policies or stop and invest in any other Product? I have already taken a Term Policy for 35 Years with Cover 1 Crore.

    Please Advise?

    Regards,
    Sharmaa

    1. They are good policies, they will pay 4-6%

  37. sandesh says:

    I have a lic policy table 75-20 money back,paying premium since last eleven years, sum assured 5 lakh accrued bonus 197000 can I have any loan from lic

    1. Hi sandesh

      The best answer you can get only from the agent you invested through or just contact the company. The thing is your case is a bit personalised and other than company, no one can give accurate information

      Manish

  38. sathish says:

    Hi

    Will i go with Jeevan anand or New endowment policy, both are same as per my consultant. but i’m ready to pay Rs.2000 pm. with term of less than 21 years

    Kindly suggest which is best.

    1. None of them is good. Better invest in RD or just mutual funds

      1. Nitin says:

        There is not assururity of ur life security in R.D.

        1. In that case, take a term plan for life security

  39. Masood says:

    Hi Manish, I have a LIC policy of Jeevan Saral for 21 years taken in August 2013. I have paid 2 annual premiums till now for Aug 2013 and Aug 2014. My next due date is Aug 2015. But due to shortage of cash, I wont be able to make the 3rd premium. Also, I want to either surrender or make the policy ‘paid up’ (coz I can wait till maturity to get something back). Can you suggest the best course of action. Do i have to inform the LIC office or just stop making the payments for making the policy ‘paid up’?

    1. heman says:

      brother as you mentioned you paid two premiums. please do not stop paying premium if you do so you will get nothing. pay the premium after 2 to three months after due date. lic will charge nominal fine and it will get started again.
      Please note.
      1)there was no service tax when you take the policy.
      it is a good plan.

    2. a says:

      not need of surrendar polcy.you will pay after 6 month no issue.

    3. Hi Masood

      You should make it paid up . Just stop paying premiums and it will become paid up , BUT ONLY AFTER 3 yrs of payment

      Manish

  40. Nitin says:

    I am paying 48,000/annum for last 2.5 years i.e i have paid 1,20,000/- so far. Please suggest should i continue or drop. But drop means forego 1.2 lacs. please advice.
    Policy Name : LIC -Jeevan Saral ( Plan 165)

    1. hemant says:

      please do not do so.
      continue it

    2. I suggest you continue it for some years nad then surrender !

  41. fayaz says:

    i have taken a policy Komal Jeevan on 25/03/2010 I am paying it regularly in quarterly basis of amount 2070/-. In that one it is written as the policy term is 25 and premium paying term is 17.

    Really i didn’t understand the agent explanation at that time. May i know what are the benefit i/my child get it with an example.

    How may years i have to pay and what are the benefits i will receive.

    Awaiting for your valuable answer.

    1. You need to pay total of 17 yrs, but the maturity of the policy will happen after 25 yrs of taking the policy !

      Manish

  42. kapil says:

    Hi just gone through your comments. Have few queries please suggest.
    I have 2 Jeevan Saral policy 60,000 + 60,000 1.2 L per yr. Its 3 yrs now, 3,60,000/- premium paid till date and want to close the policy as u suggested.
    1. Shall I surrender it or make a paid up?
    2. Take a loan on the policy?
    3. Shall i reduce the premium amount?
    What will be the best solution? do you have any other thought ?

    1. Hi kapil

      I think you should make it paid up or surrender the policy.

      Manish

  43. Peeta says:

    Dear Manish,

    I have taken Jeevan Rekha LIC policy during 2005 ,10 years term with 10% cach back every 5 years. After paying full premiums ( last premium was on 2015 march) my agent told me that I will only get the SA ( 30000 USD) only aftre my 80th year ( my agnt actually explained me endowment policy and given jeevn rekha ) . As i am unmarried (43 years) and my nominee is my mom ( 67 years) is there any way I can get my money now rather waiting untill my 80th year.
    Appreciate your help

    1. You can make the policy as PAID UP , and you will get the money, but not the full , only partial !

      1. Peeta says:

        Thanks for your response Manish,
        I believe paid-up value is only when you have still premiums left.. But in my case I have fully paid the premium. Will I be eligible for altering the policy as “Paid-up” ? if so how much percentage I will get.. ( i have already received 3000 USD during 2010 and I will receive another 3000 USD this week).

        Please advise

        1. No its not like that. Check your policy details . Even in case of one time premiums, the paid up value concept exists, but the final thing would be in the documents. Once you get $3000 this week, after that you apply for paid up policy

          Manish

          1. Peeta says:

            Thanks Manish,

            sorry to ask you the same , roughly how much percentage i will get if I apply for paid up?
            Sudha

            1. Only LIC can tell you that

  44. Mohammed Rabbani says:

    Hi,
    Manish,

    Kindly suggest, where can i invest my money. As per my religious terms, Interest given & take is prohibited. My monthly limit is around 15000/-.

    Do the needful.

    Thanks,
    Rabbani

    1. Hi Mohammed Rabbani

      But anywhere you invest, you are going to get interest profit or something more than you invested

      Manish

  45. Mohammed Rabbani says:

    Thanks for your information.

    I have taken Jeevan Anand Policy in 2012. But now i want to Withdraw, due to some personal problem. But, as per your suggestion, im going to lost money.

    Can i Convert my policy into any other Policy.

    Regards,
    Rabbani

    1. Converting is not possible

  46. mohit srivastava says:

    Very nice and crisp…cleared my doubts and I liked that you kept it so simple…

    1. Thanks mohit srivastava

  47. anil says:

    I have LIC Jeevan Mitra
    Table 133
    Premium Rs 13000/-
    Started in Year 2000
    Have paid 15 premiums so far
    Term 30 years

    I calculate IRR, it is very low.

    Shall I continue for next 15 years?
    Or Surrender?
    Or Just stop paying premium and let it get converted to paid up?

    1. I dont think you should continue . Better surrender or make it paid up

  48. K Bhardwaj says:

    Hi, Manish,
    I have a jeev Shree policy. Date of commencement 14/06/2001, date of maturity 14/06/2021. Premium Rs 52661/ Last premium paid in June 2012. Sum assured Rs Seven Lacs. I took a loan in Dec 20111 of Rs Five Lacs . Half yearly interest is Rs 22860. I want your advise what are the pros & cons if I surrender now or wait till maturity. I have requirement of funds for education of my son.
    regards
    K Bhardwaj

    1. I have already shared exactly what you are asking in the article. Did you go through it ?

  49. K Bhardwaj says:

    Hi Manish,
    Please advise, I am holding Jeevan Shree policy table & term 112-20 (12) Sum assured Seven Lacs, Date of commencement 14/06/2001, date of maturity 14/06/2021, date of lastPremium payment 14/06/2012 , Premium amount Rs 52661/ . All premiums have been paid. I have taken a loan of Rs Five lacs & eight thousand on 24/12/2011. Interest being Rs 22860/ half yearly . but I have not paid any interest so far. please advise if it is in my interest to surrender / wait till maturity. As I may require funds for my sons higher education. Regards

    1. K Bhardwaj says:

      Hi Manish,
      Plz also let me know roughly how much amount I can expect after deduction of loan amount & interest , if I decide to encase within one/ two months.
      Regards

      1. Which loan is that ? Is it against the policy ?

        Manish

        1. K Bhardwaj says:

          Yes it is against the policy.As per latest surrender quotation dated 06/04/2015 .Paid up value Rs seven Lacs, total bonus Rs Seven lacs thirty five thousand ,surrender value payable Rs Eight Lacs seventy thousand Six hundred & fifteen. Please let me the pros & Cons of encasing now/ on maturity
          Regards
          K bhardwaj

          1. Then you can surrender it now . Its better to take less now and reinvest or use , rather than take a little higher sum later

            Manish

          2. K Bhardwaj says:

            Dear Manish,
            please let me know what amount I will get now on surrendering / surrendering on maturity. how much is loss amount wise.
            Regards
            k bhardwaj

            1. That only your company LIC will be able to share. The calculations are with them only

  50. rushi says:

    Hello manish

    I have gone through this blog first time & i think that you would be the one who will take me to the precise solution to the issue.

    right now I am having 6 policies.started in march-2012 (3 yrs back)
    Plan Nr Enrollment Date Prm Amnt Sum Assured Plan PP term
    179 19-04-2013 1,671.00 5,50,000 New Bima Gold 20
    14 19-04-2013 960 2,80,000 The Endowment 24
    5 19-04-2013 801 2,75,000 Whole Life ltd pol 28
    14 19-04-2013 690 2,70,000 The Endowment 32
    14 19-04-2013 415 1,80,000 The Endowment 36
    14 19-04-2013 118 55,000 The Endowment 53

    now I realised by calculating few figures that i have made mistake by investing so much money in it.

    I am thinking to surrender it all ut found “paid up” phrase above in the blog.
    can you plz suggest what shall I do with these policies to face minimum loss?

    I dont want to continue such blocking of money where I am myself not having any idea whether its really beneficial or not.

    1. If you close it before 3 yrs , you will loose all the money. But even continuing is not a good option !

  51. Pradeep says:

    Hi Manish, I have taken 3 policies actually
    1. The Endowment Assurance Policy.
    2. Jevan Anand.
    3. Jevan Mitra Triple Cover Endowment Plan.
    Every month i will be paying Rs.2206 (Including Three Policies). Almost from 4 years I am paying means around 1,06,000 i have already paid. And this is 25 years policy plan. My question is while doing this policy I have not asked any doubts but now after reading all these things I am getting few doubts. How much I will be getting once these policy get matures. Premium details
    1. The Endowment Assurance Policy (Rs.663)
    2. Jevan Anand (Rs.741)
    3. Jevan Mitra Triple Cover Endowment Plan (Rs.802).
    Inclucing all these three policy i am paying 2206 per month.
    Can u give me rough figure how much i will get after 25 yrs….?

    1. Hi Pradeep

      For that you should contact LIC only. THey will be able to give you right picture !

  52. NITIN J BARVE says:

    sir,
    I have gone through all queries and answers.
    in all insurance policies,there is component of saving + mortality+ expenses.
    if you bifurcate your insurance premium in two parts. The maturity value of saving portion will work out to 8% .TAX FREE ASSUMING CURRENT BONUSES.
    LIC IS DOING VERY GOOD JOB OF PROTECTING POLICY HOLDERS MONEY FROM INTEREST RATE CHANGES,STOCK MARKETS UP DOWNS AND GIVING DECENT RETURN OVER LONG PERIOD.
    SURRENDER WILL BE ALWAYS LOSS MAKING IN EARLY YEARS OF POLICY.
    YOU HAVE NOT GIVEN ANY CHART SHOWING ACTUAL MATURITY VALUE PAID BY LIC TO ITS POLICY HOLDERS IN PAST.
    YOU ARE SHOWING SCENARIO OF ONLY SURRENDER.
    YOUR ARTICLE SHOULD BE BALANCED. SHOWING BOTH POSITIVE AND NEGATIVE SIDES OF ANY INVESTMENT.

    1. Hey NITIN J BARVE

      Thanks for sharing your experience with all of us. It was a great learning.

      Manish

  53. Gajjan says:

    Hi Manish,

    I have paid 7 Yrs premium (60K/Yr) (of course cheated by agent) for Jeevan saral plan.Can i pay 3 more yrs so that loyalty addition will be added.

    Is my calculation is correct as below for loyalty addition.
    For 1000 Rs – LA is 375
    For 550000 -LA will be 206000 (approximately at the time of surrender)

    Thanks in advance

    1. How will you benefit by doing that ?

  54. Paramjeet Singh says:

    I am a LIC advisor and i considered your article as good as it is just educating people about choosing insurance go along with that. Insurance should be treated as a medium for Risk Coverage, but not to get huge return on investment. There are various other medium to invest money. Every insurance company work same way. Customer should understand that even paying small premium they are covered for big amount in case of any mis-happening with policy holder. This is the main benefit which no other investment can provide.

    1. Hi Paramjeet Singh

      Thanks for your sharing your valuable comment on this topic. Please keep sharing your views in future also

      Manish

  55. kishor12345 says:

    if i surrender now they will give me 82000. (asked lic office)

  56. kishor12345 says:

    Dear Sir,

    Please can you advice me.

    I have jeevan saral policy of 48040 per ann. and have completed 3 years just now. I have taken this policy only for investment and tax saving & at that time i get misguided from lic agent. Now i want to exit this policy with minimum loss. i have following 2 doubts in my mind

    1) continue for 10 years and then surrender so that no surrender charges and will get some LA.

    2) surrender now (completed 3 years now) and invest surrender amount and next premiums in ppf.

    1. I think option 2 is better

  57. Kaushik Baruah says:

    Hi,
    I have a Jeevan Anand Policy for 25 years. I pay Rs 29,944 as annual premium and have already paid premium for 10 years. The vested bonus as shown in my LIC log in is Rs 349,500. Please let me know approx. how much will I get if I surrender my policy.
    Thanks,
    Kaushik

    1. Vested bonus is not the same amount which you will get if you surrender the policy .You need to ask LIC on the exact surrender value !

  58. santosh says:

    Good explanation from you…. Please explain how maturity amount is calculated at the end of policy period.

    1. Thats too complicated to explain and cant be done in comments section . Talk to company on this .

  59. Harinath says:

    hi manish, i hav taken jeevan anand policy with sum assured of 22,00,000 and annual premium of 107204 payable half yearly..,i hav paid 3 instalments of 53602(one and half year) till now.., ofcourse i didnot do proper research before taking policy and agent has nicely trapped me. Now i feel am doing wrong. so, 1st step i took is taking term plan from hdfc. 2nd step is am thinking of stopping paying LIC fella.
    1st question -Is it a good decision because i wont get single penny out of it.
    2nd question – my agent paid 26k of 1st installment – wil he come and ask me money. if e asks wat should i do.

    1. Harinath

      You can choose to stop it, but I would say if you anyways want to put most of hte money in FD or PPF , then you can continue it and let this be the debt portion of your financial life.

      Your agent will not ask for the installment

      1. Harinath says:

        Dear Manish ji,
        thank you for ur reply. yes i was thinking of putting same amount in FD/PPF.., it works as debt instrument if we remove tax part, IRR is around 8%. i’ll continue with it.

  60. anand says:

    hi Manish,

    I had paid my first premium in Jeevan Saral @ Rs. 24k per year in June 2007 and have paid till June 2014. Now it is clear i want to surrender the policy after reading the article and above queries, but does it make sense to wait for 10 years to complete, or do it immediately?

    Thanks,

    1. I would have surrendered it now itself 🙂

  61. nitesh says:

    And i received a call from the LIC company they told me that we provide the bonus after completing a year and we paid our clients by cheque and that bonus is from our side LIC company..

  62. nitesh says:

    THANKKS @ LOT…..but can u tell me what amount of bonus i will get at the end of the yearfor e.g:if pay monthly a 1000 rs then what amount of bonus i will get at the end of the year…….

  63. nitesh says:

    Hi Manish,

    I had taken LIC policy last year and completed one year also, is there any bonus provided by the LIC company ,and would i can get that in my account or i will get at the end of maturity.

    1. You will get it at the end of the maturity !

  64. thomas says:

    4:48 PM

    Dear Manish,

    Excellent article. I end up reading this article when I decided to reconsider continuing my Jeevan Anand 149 Plan. I am in a real dilemma whether to continue or dump this policy and I think you would be the perfect person to answer that.
    Policy details : Jeevan Anand 149 plan, Premium quarterly : 17,983 Rs, Maturity : 21 years.
    Start date : 09/05/2011.
    The policy is currently lapsed and I have paid my last premium on 09/02/2014. I just want to know
    a) surrender the policy as I have paid premium for min 3 years?
    b) Continue policy till the 5 th year and later surrender?
    c) Make It a paid up policy and wait for 21st year for Maturity benefits?

    Thanks,
    Thomas

    1. You can leave it unpaid and it will be in paid up option !

      1. THOMAS says:

        Hello Manish,
        Yesterday I met my LIC manager and we had a good talk for half n hour or so . He was kindful enough to provide me the “magic matrix numbers” . I can send you this pdf report which shows the annual premium and the returns for successive years. As per this, if I surrender the Jeevan Anand policy now, i would be getting 1, 45,000 Rs , where the total premium paid would be 2, 75000.
        If i make this a paid up policy , my returns on 21st year would be less than what i would earn if I invest 1,45,000 in Mutual funds ( assuming 10% returns with MF and 5.5% return with LIC). I have decided to take a term insurance and may be I can split some portion of the surrender value in this and rest in PPF and mutual funds. In this regard, I would like to know your thoughts on making this policy paid up ( as suggested by you before)?. Also, if I surrender the policy now, what is the best tax saving option to invest the surrendered money so that I would beat the LIC returns of 6 % max ( with bonus +FAB etc).

        Eagerly waiting for your reply

        1. Let me put a mail to you

          1. thomas says:

            Thanks.

  65. Deepak says:

    Hello,
    I have read this blog as well as the comments on this blog.
    I have a question regarding Jeevan Anand just like all others.
    I have a LIC Jeevan Anand for the sum assured 10L, for which I have been paying premium of Rs. 4ok every year, and 4 premiums paid.
    I have gone through your blog and understood that its not good to mix investment and insurance, and that is very clear to me now. And I have almost decided to come out of it. I have a question –
    Lets consider this scenario,where think of this Jeevan Anand just as investment (since I had already paid some premiums).
    As per the agent and a few sites on the internet, after 25 years (20 yrs from now), I will get around 24 L as maturity amount, and cover of 10L still continues.
    Now, lets say I come out of it, I had already paid 1.6L and I will only get 80k.
    Now, lets say I put this 80k in the PPF as starting balance, and keep putting the same 40k per year also to the PPF, considering the 8.7% interest rate, it will become approx 25L after 20 years.

    So, don’t you see not-much difference between the two?
    Or 24L claim by agent etc is not at all true?
    I know the maturity values depends on bonus and FAB, but still is it far away from actual maturity value?

    Please resolve my final concern.

    1. Yes, most of the times the numbers given by agents are projections .. I suggest you find out the IRR of the policy and decide on that ..

  66. pradeep kumar sharma says:

    AFTER 5 YEAR PAYEING 9000PER ANUM IF I WANT SUURENDER WHAT I WILL GET

    1. Depends on the policy rules

  67. Hemant says:

    I have Jeevan Tarang Policy. I paid 04 premium. One year premium 73430/- policy term is 20 yrs. if i am not paid any premium now than how much amount i will get end of 20 yrs. Or i will continue to this policy.

    Pls advise

    1. You will get all your premiums paid till now at the end of the policy !

  68. anil says:

    Iam anil i have lic jeevan saral polici i paid 3 premium (4700 yearly) i want surrender how much i will back?

    1. You will get just the 1 yr premium back at this point

  69. Mohanreddy says:

    Dear Sir,

    I have LIC Jeevan Anand Policy for 16 years,
    Last year i have taken the policy
    Per year my premium is 51,888 /-
    After 16 Years how much amount i will get.

    Thanking you sir,

    Mohanreddy

    1. You will get all your premiums + bonus

  70. chavan says:

    Thanks Manish And Nandish, good information with simple language, can be understood by any one,spending few minutes to get basic knowladge

  71. devendra says:

    hello sir,
    just eagar to know why we buy LIC policy to get 6-7% return.
    isn’t it better to go fix deposit.

    1. Valid question … But most of the people never get that question at all !

  72. Abul Fujail says:

    Hi Manish Chauhan,
    What about Postal Endowment policy. Whether is it better than insurances provided by other organizations? I have seen lots of complement on your article but not finding the article. Can u plz send it.

    1. Any Endowment is not recommended

      1. Abul Fujail says:

        Can u plz give me an idea about the disadvantages of Endowment policies. How others are better than this?

        1. Abul

          Do you know what is the % return you get from them over long term ? Its below inflation almost all the times . Thats the main disadvantage !

          1. Abul Fujail says:

            Thank you Manish Chauhan… its 100% correct… Still i want to know the which one is better, LIC Jeevan Anand or Postal EA. According to agent, LIC is giving more resturn. I am not sure whether is it correct. In Postal return is on average 65/1000. My age is 30, if i do it for 20yrs. Investment may not be possible as i cant invest at a tome. Monthly i have to deposit.

            1. In that case you can go with LIC only !

  73. Nikhil says:

    Hello,

    My wife has a Jeevan Saral policy initiated in 2011 through a relative of her’s. Now this relative has paid up first premium and have not paid the remaining of premiums which she came to know couple of months back. Now she has two options:

    1. Pay 4 due premiums which penalty
    2. Leave the policy redundant

    Going for 1 would mean 4 Installment but 8% Interest on it as Penalty (Am I correct here?) Going for 2 means losing the 1st Installment i.e. 18K. I know there would be no benefit before 5 years when we can surrender it.

    Now if I plan to renew the policy, will I get benefit of the 4 installment that has been delayed i.e. Interest and bonus associated with it? Should I leave it like this and make this 4 installment investment in some pure investment avenue.

    Please suggest.
    Thanks

    1. I would personally go with option 2 , and restart my investment plans !

  74. Santanu Chowdhury says:

    Hi:

    I have a LIC policy , Table no 151. I started paying Premium in 2003 March.
    Premium= 113,000
    SA = 10,00,000
    I have completed my premium paying period of 10 yrs and waiting for maturity in 2018 March.

    At this point if i withdraw , how much i can expect back from LIC.

    Thanks

    Santanu

    1. That can be shared only by LIC . Login to their website , your account and you can get this information !

  75. Viren says:

    Hi,
    This is very nice post.
    I would like to have a quick snapshot calculation against LIC loan.
    for eg. If I take 1 Lakh loan against my policy fulfilling loan eligibility then how the Premium+interest gets paid to LIC over the period of time…
    Can anyone explain in amt paid over month-year format till the loan becomes nill

    Thanks,
    Viren

    1. This is more of a discussion questions, a better place would be our forum to discuss this – http://www.jagoinvestor.com/forum

  76. Jimmy Jose says:

    Hi Manish,

    Thanks for this very useful article!

    I am invested in ‘Kotak Mahindra Money Back Policy’ since 44 months. Its SA is Rs.500,000/-; Maturity Period is 20 years; Monthly Premium is Rs.3003/-.

    The Policy Document states that 20% would be paid thrice after every 5 years, and Rs.350,000/- at maturity, which comprise the remaining 40% and some bonus.

    1] Does that mean that the total premium paid by the end of the 20th year would exceed my returns of Rs.650,000/-?

    2] Does this policy have the ‘Paid-Up’ option so that I can stop paying now and remain invested for 16 more years? If YES, how much can I expect of it at the end of 20th year?

    Regards,
    Jimmy

    =-=-=

    1. 1. Yes, along with Bonus, I guess you will get more than 650,000

      2. You need to check their brochure for that,but Yes, there is always a PAID up option !

      1. jimmyjose2980 says:

        Thanks Manish!

        Any idea what amount of bonus can I expect?

        1. The exact amount can shared only by the company

  77. Kishan says:

    Hi Manish,

    I read your article, its very helpful and upto the point. I got information about paid up policy by reading the article & below comments.
    I have recently started my policy, its been 2 yers and I have paid premium of 54000/year. Now its my 3rd year, I need to make payment in the month of July 2014.
    I have 2 questions for you:
    1. Do i need to continue till 5 years and stop paying the premium or STOP now only??
    2. If I stop paying the premium, it will become paid up. Will LIC still give me Insurance coverage ??

    Thanks,
    Kishan

    1. If you stop it now, then it will NOT Become PAID UP , because you have not paid till 3 yrs , only after 3 yrs of payment it gets any surrender value .

  78. Jayan says:

    Hello Manish,
    While goggling for good investment plan for my future I came across this site. Nice initiate and it will help people like me.
    I need your advice for best investment plan.
    I have plan to buy SBI life’s Shubh Nivesh or HDFC progrowth plan for sum assured 1,000,000.
    Is it wise advice or should I go with PPF or RD else pls advice.
    Already ordered for your book and it will delivered on 7/2.

    Thanks
    Jayan
    Bangalore

    1. I would suggest going with basic level products like PPF , RD or mutual funds

      1. Jayan says:

        Thanks Manish.
        I have started SIP on SBI MF Magnum global and Blue chip fund
        Not sure this is good plan, please suggest some best plan for SBI and other AMC’s

        1. Jayan

          For suggestions on mutual funds, please open a thread on our forum http://www.jagoinvestor.com/forum

  79. Pingback: Which is the best bank for Home Loan
  80. mayura says:

    Hi Manish, if there is no question of surrender, is LIC a good option for “return on investment’ for long term plan(15yrs). I’m asking because I’m not sure I can be very disciplined/active player in the MF area for this long duration. I’m done with PPF, so this is over and above that. Thanks in advance

    1. Yes, if you are not going to surrender, LIC can be a ok choice, you can get around 5-7% return over a long term, you have to be ready for it then ? Is it ok ?

  81. Amit says:

    Hello,
    I am taking jeevan saral policies and yearly premium is 60,000.

    But due to some reason i need to save the money for some expense right now. I paid premium quarterly and three installment i paid total money i paid is about 45,000.

    so what should i do, to get my money back. or i hv to close it and bear the loss of 45000. please guide me. or wait for 5 years so that i will get good amount

    1. Amit

      Jeevan Saral acquires a Surrender value only if you make payments for 3 yrs . If you stop your payments before that you will loose everything !

  82. Raj says:

    Hi Manish,
    I have a LIC pension plus (T No 803) commencement on 24-Sep-2010. I am paying quarterly premium of Rs.12,000.00/-. Till now I have paid Rs.1,56,000.00/-.
    Now I want to complete withdrawal of my above policy. At looking at the 5 years lock-in clause of the policy now I have 2 options. First, pay my premiums for next 2 years. Second, do not pay any more premiums. How LIC will calculate my fund value in both the scenarios? Which will be good?
    Please help as from policy documents I am not able understand and conclude the same.

    1. I think its a market linked product .. If it is , there its not a matter of calculation, because its not based on a formula .. I would say check both the scenarios and take a decision. Its always better to do these kind of discussions on our forum – http://www.jagoinvestor.com/forum

  83. sriprakash says:

    Hi Manish,
    I am sriprakash from Bangalore.I have total 9 lacs to invest which can give me good returns every year.Please suggest me ..I cannot invest on real estate and all as i have total only 9 lacs and my salary also very less.Please suggest me some good fixed deposit/mutualfund/nsc/government bonds.

    1. You should then invest in some fixed deposit and choose interest for quarterly basis to make sure that you have some regular income out of it

  84. Hari Krishna says:

    Hello sir,

    I have an LIC policy ‘Limited Endowments+’ that I have started in 2002 with an annual premium of Rs 49,676, and it is meturing in 2027. The sum assured is Rs 10 lacks. The ‘vested bonus’ accured so far is Rs 5,14,000. Given the advent of mutual funds and other investment options, is it advisable to continue this policy or I better invest elsewhere? If I close the policy now, howmuch will I get approximately? Please suggest a course of action. Thanks.

    1. What is the return you are getting on this policy in percentage terms ?

  85. Biju says:

    Excellent article.. I did not do any math when I took a LIC policy in 2003 for a high premium for 20 years just to avoid tax. Because of inflation the returns on 2023 is actually very very less. I am pretty sure by 2023 the money from LIC would be 6 months salary for medium IT profession or even less then!!!! This should be an eye opener for many ..

  86. Hvishal says:

    Hi
    Thanks for all your valuable comments. I need your help to understand whether I’m going for right plan.
    My LIC agent has suggested me Limited payment whole life with profit plan (table 5). Premium per year is 31000. SA is 9,00,000. Premium paying terms is 20 years. Maturity is at age of 80. Risk cover given is 9 lac from first year and keep on increasing till 71 lac towards the maturity i.e. it increases by 50,000 every year. Maturity benefit is around 71 lac. Can you please let me know if this is good plan to buy, as risk cover appear to be good. Of course the guaranteed risk cover is 9 lac but including bonuses it goes upto 71 lac. Please help.

    1. I think you should wait for some time for more clarity on any traditional plans . read my article which I publish today on this regard !

  87. uranakar says:

    07 Aug 2012 06:42 AM
    ‘Endowment Plans are not bad’
    D V Suresh, DVS Consulting, Hyderabad
    Share on facebookShare on twitterShare on email

    D V Suresh of DVS Consulting says that surrendering an endowment plan
    just because it gives lower returns is not a good idea. He says that
    endowment plans can be safely considered as debt component in the
    asset allocation, instead of asking the client to surrender.

    A lot is heard and read about surrender of endowment plans in the
    media. No doubt term cover is one of the cheapest ways to protect the
    family for income replacement, but that is not the only thing that
    protects the family from practical situations.

    There is no doubt that investing in equity and mutual funds do give
    better returns, which is the basis on which the CFPs are advocating
    surrender of Endowment plans. And it is one of the easiest ways for
    the CFP to impress the client by comparing higher returns through
    equity based investment with the returns of endowment plans.

    While endowment plans do not give better returns compared to mutual
    funds, what is lacking in the advice is the practical aspect of
    living.

    We prepare a comprehensive financial plan or for that matter even a
    goal based financial plan and advise the client that a systematic
    investment in the chosen mutual fund will meet the goal which will
    beat inflation. But, can we look at this more practically?

    As human beings we are disciplined only when we are compelled to. When
    there is no compulsion the discipline tends to go awry. This is proved
    by the fact that approximately only 40% of the persons who have
    started the SIPs (Systematic Investment Plans) with mutual funds are
    actually staying till the end of the term. This means, 6 out of 10
    discontinue in between.

    When this concern was discussed with some of the CFPs, the answer was
    “it is up to the investor to stay the course if they want to meet the
    goal”. Agreed that it is the individual’s necessity so he better stick
    to his commitment. But as professionals, is it not our duty to also
    look into it more practically?

    Life is not as smooth as it appears on paper. In spite of all the
    planning, life can throw surprises and unforeseen emergencies. So in
    such circumstances the easiest fall back is on funds that are easily
    accessible – mutual funds. And what goes for a toss is the goal for
    which the mutual fund was meant for.

    Imagine a situation where a person had planned his/her child’s
    professional education or daughter’s marriage. If he/she had invested
    only in mutual funds and taken a huge term cover, and unfortunately a
    situation similar to the 2008 global meltdown arises. Where does the
    person stand? Can the person postpone the child’s education because
    the Planner failed to protect them in such situation?

    Dear CFPs, please note that it is very easy to advise surrender of
    policies, but wake up to facts of life and reality. Working on excel
    sheets no doubt gives impressive output, but let it also work in all
    circumstances.

    To substantiate my view, I have taken an example of a 35 year old
    person who has taken LIC’s endowment plan for 21 years in order to
    accumulate some money for his child’s overseas education who is one
    year old. Now let us see, how this endowment plan performs..

    I have considered two scenarios i.e., with tax benefit (30% slab) and
    without tax benefit (under section 80C) after setting aside the term
    cover part of the premium…

    Investing in a term plan vis-à-vis an endowment plan

    Without Tax Benefit

    With Tax Benefit

    No Tax Beneift but with Term Cover Included

    Annual Premium

    Rs 47888

    Rs 47888

    Rs 47888

    Less: Savings in Tax

    0

    Rs 14654

    0

    Less: Term Cover Premium

    Rs 5600

    Rs 5600

    0

    Net Premium

    Rs 42288

    Rs 27634

    Rs 47888

    Term of Endowment Plan

    21 years

    21 years

    21 years

    Total Net Premium Payable

    Rs 888048

    Rs 580314

    Rs 1005648

    Risk Cover -Natural Death

    Rs 10,00,000

    Rs 10,00,000

    Rs 10,00,000

    -Accidental Death

    Rs 20,00,000

    RS 20,00,000

    Rs 20,00,000

    Maturity Amount

    Rs 21,08,000

    Rs 21,08,000

    Rs 21,08,000

    Yield on IRR basis

    7.30%

    10.62%

    6.30%

    In the last column, we see that in spite of including the term premium
    and by also not considering any tax benefit the internal rate of
    return (IRR) works out to 6.30%, while the first two columns show
    clearly the IRRs with and without considering the tax benefit, which
    are 10.62% and 7.30% respectively. These are conservative returns, and
    the capital is also protected. Thus an endowment plan can be safely
    considered as debt component in the asset allocation, instead of
    asking the client to surrender.

    Yes, one can include existing insurance plans based on its merits and
    then suggest improvements and additions while drawing up a financial
    plan.

    This will indeed help the client overcome an adverse situation by
    protecting the extent of the maturity amounts from endowment plans
    which are not directly impacted by the market fluctuations.

    The views expressed in this article are solely of the author and do
    not necessarily reflect the views of Cafemutual nor does Cafemutual
    take responsibility for the accuracy of any information in the
    article.

    1. Good article . Overall I agree with the writer on the aspect of compulsion . But then I think that those who can not control themselves and need some compulsive approach to make their financial life better actually deserve lower returns.

  88. Anand Mahamuni says:

    One of my “close friend-n-my LIC Agent” has presented me an retirement plan for my wife (age 40): Jeevan Saral – term 22, yearly premium – Rs. 72060/- and paying upto 2033
    He say it has to be started in this month (aug – or latest by Sept 2013) as there would be “service charges added in all the LIC policies starting in Oct 2013” [is that really true]

    Returns:
    1] Retirement monthly Income – would be Rs 25300/- (age 61 – in 2034)
    2] withdrawal available of Rs 42,83,305/- (age 61 – in 2034)

    What do you say on this – from a view of an retirement plan?

  89. ashok says:

    Sir
    u r genius in investment advisory. LIC is government of India unit .IF lic is duping ,then government is duping or misleading public.so why cant u make a forum fight against it .Advertise in all indian launguase magazines regarding the matter. Govt has invested rs 5000 core when it is nationalized private blade insurance companies. & getting heavy dividend for it .Guide villagers to have life cover ,return of good return with good profit, because they r unaware of equity ,mf etc.They will be followed by blade complies.by greediness. they will lose principal also.Against this why cant to u approach honorable supreme court in the matter .

    1. Yes, lets do it together . As you have already accepted it , will you help us in this movement ?

  90. Sam says:

    Hi,
    Can you please explain the difference between ‘basic sum assured” and “maturity sum assured” in Jeevan Aastha LIC policy? When will these amounts be given to the proposer?

    Thanks in advance.

  91. Vignesh. S says:

    I have a doubt on one of the Policies named New Jeevan Suraksha.

    I am paying a premium of Rs. 50000 per year and i have completed paying 5 years in full and 5th year is completed. Could you please let me know how much will i be getting if i surrender the policy after the completion of 5th year.

    Regards,
    Vignesh. S

    1. Only your policy document will be able to show you that. Why not ask the same agent from where you bought it !

  92. Ayesha says:

    Dear Manish:
    I would like to know about
    1) the kind of investments LIC makes with the policy holders’ money?
    2) From a religious point of view, does it involves “interest”, which is forbidden for muslims?

    Thanks,
    Ayesha

    1. Muthu Krishnan V says:

      ayesha, LIC in turn invests in equities, government debt which definitely involves interest. I do not think any LIC product is shariah-compliant if that is what you are looking for.

  93. Arun Kumar says:

    Hi I have a Jeevan Anand policy, from last 1 year i had not paid the premium.
    and its 2 year old. if I paid the premium today.
    Can i avail the loan facility on the same???

  94. Raj says:

    I have invested on LIC Jeevan Anand(T. No.149) policy term 70(premium payment term 25) commenced on Sep-2005 with Rs.20978 payable yearly. Current surrender value is Rs.106626. Kindly advise should I surrender or continue it?
    I have also invested on LIC Jeevan Surabhi(T. No.108) policy term 25(premium payment term 18) commenced on May-2005 with Rs.20362 payable yearly. I have no information about current surrender value but received 50000 this month. Kindly suggest should I surrender or continue it?
    If you suggest to surrender then please let me know where to invest the same amount of money.
    Thank you .

    1. Make it Paid up option now

  95. Manisha says:

    What about alterations in the existing policies? What us the procedure and pros and cons?

    1. Not sure of your question . Elaborate !

  96. Rajesh Shetty says:

    Hi Manish,

    I am kicking myself in the nuts now. I learnt this the hard way when i had to surrender my birla and bajaj insurance policies since i was in an emergency… ….. I then started searching net on how these crooks cheat us…..I should have gone thru this article years ago………I still have 4 more LIC policies and have been putting my hard earned money in to them year by year… a quick calculation using your logical methods has proved me that i should have kept insurance and investment seperate. Thanks a ton for your article.

    Let more ppl go through this and understand things better. I am copying your article link on to my facebook wall. I want all my frnds also to get enlightened.

    Regards,
    rajeshKR

  97. p kumar says:

    Dear manish,
    i m a merchant navy officer in foreign going vessel.i want to buy a policy thr LIC.is there any special plan for mariners??
    please suggest me which plan should i opt?/

    1. I dont there is any special plan like tht

  98. Murty says:

    My dear Friend,
    The majority is not always true. I respect your profession, probably you are an LIC Agent, but tell me one thing, A dalal is a dalal, a doctor is a doctor, but every TD&H is a great analyst, that includes Manish, You and me.I appreciate manish’s efforts, there might be one or two glitches, we have to rectify them and not to give seeping statements like everyone who is commenting here is a fool! THE WORLD IS A MIRROR MY FRIEND! IT JUST REFLECTS YOUR OWN PERSONALITY!
    Apart from LIC, tell me something better about other Insurers too! For instance, I got a mobile number of a previous employee allotted to me. That bloody fool from TATA AIG gives me annual reminders for the past 6 years, inspite of telling them politely and writing mails, giving complaints, still they are after me! What do you say? The Doctor knows how to grab patients? The vendor runs after the vendees???????

    1. Murty

      Whom have you address this reply to ?

      1. Murty says:

        Hi Manish,
        It seems some guy was writing comments using too much of his own intelligence and trying to belittle your efforts, and it is in reply to his comment I wrote this.

  99. pramod mishra says:

    Hi
    I have a jeevan varsha policy of 9 year and I have paid premium up to 3 yrs . now i want surrender this policy. Can u tel now LIC how % paid me?

    1. Only LIC will be able to tell you

  100. Puneet Sharma says:

    Hi Manish,

    I have following set of policies

    Commencement Date Plan Name Sum Assured Premium Amount Mode Accident Risk Cover

    6/20/2002 New Bima Kiran 100000.00 873.00 Yly 100000.00
    6/20/2002 New Bima Kiran 100000.00 873.00 Yly 100000.00
    6/20/2002 New Bima Kiran 100000.00 873.00 Yly 100000.00
    6/20/2002 New Bima Kiran 100000.00 873.00 Yly 100000.00
    12/21/2005 Bima Gold 200000.00 6569.00 Yly 0.00
    5/25/2006 Jeevan Tarang 400000.00 20088.00 Yly 0.00
    1/11/2011 Jeevan Saral 1250000.00 5104.00 Mly 0.00
    5/3/2012 Jeevan Chhaya 500000.00 25690.00 Yly

    What do you suggest i should be doing with these? I had gone through your previous articles and somehow think i am stuck with wrong deals. As i don’t have much knowledge about these – please suggest.

    Thanks
    Puneet Sharma

    1. If I were you , I would make it paid up

      1. Puneet Sharma says:

        Paid up? Can you please elaborate on that.

        1. Puneet

          Its covered in the article itself

  101. Prakash says:

    Hi Manish,

    I have a lic policy of term 20 years with Rs 20,000 per year premium. I have paid premium for 5 years.
    Now if I surrender, will I get entire Vested Bonus or only 30% of Vested Bonus?

    Thanks,
    Prakash

    1. You will get current value of vested bonus . its a future value

  102. Akash says:

    Hi

    I have LIC jeevan anand policy.
    My Age-25 years
    Yearly premium-25000
    Insurance covered-1000000
    Tenure-35 years
    Sum Assured-4000000
    two premium paid as of now.
    What do you suggest, hows this calculations going..?
    Should I continue ?

    1. I suggest paid up

  103. Lavkush Sharma says:

    I have a Policy named Jeevan Anand Plan – 149, term 21 years with the sum assured of Rs. 3,00,000/- & the premium is 7407/-HYrly. I have paid 7 premium & want to avail the loan on the given policy. I have received the vested bonus of Rs. 28000/-
    Please tell me how much amount can I get loan on policy & what will be the surrender value. If I get the loan how much interest is needed to pay in how much time. Also explain the Vested bonus on the policy.

    Lavkush Sharma
    Indore

    1. Lavkush

      All this info you will get from LIC only. the numbers given by us will not be accurate

      1. Lavkush Sharma says:

        Dear Manishji,
        I am just asking about the tentative idea & the basic knowledge of the terminology…….Please try to find out the way…

  104. venky says:

    dont surrender the policy before 5 years or 10 years in jeevan saral policy .surender policy after 10 years .
    take term insurance if ur intrested at the same time look at private companies claim ratio also .
    most of private life insurance companies do the fraud or cheating so be care ful before take any policy from new life insurance companies .
    LIC and SBI life are the best in present market .

  105. Shivakumar A says:

    whenever you decide to take a plan from LIC, please go to a experienced and full time Agent. Experieced Agents would be able to guide you better in term of Insurance and Investment.

    LIC is only for Insurance. Please do not mix Insurance and Investment.

  106. Raja says:

    Hi Manish
    I have invested in total of 10lacs(2 policies) in the past 10years in endowment assurance policy(payment term 20yrs policy term 25yrs), I am 38 yrs now do you suggest me to continue in this policy or surrender or paid up
    please suggest

  107. Amar Nath says:

    Hi Manish,

    I have taken a Jeevan saral Policy from LIC. I am paying rs 60,000 per year.I have paid 3 installments ie rs 1,80,000. When is the best time to surrender this policy.

    What will be the approx amount if i keep paying them for 20 Yrs?

    Regards,
    Amar Nath
    8087036000

  108. GODFREY CHERIAN says:

    Dear Manish,

    This site is really very good and very neatly explained.
    I have a query. I have taken jeevan shri LIC in September 2003 and is expected to mature in September 2013. I paid Rs.171,093/- every year for 6 years. The insured sum is KD.10,00,000/- . Can you tell me what will be the maturity amount in September 2013. Also, kindly advise if i can withdraw the money before its maturity in August 2013 (one month before its acutual maturity). Will i get the complete money or there will be some deduction. This is only becasue i will be in India only in July and August 2013. Awaiting your advise. Thank you.

    1. I dont think you can get it before , you can get it only if you surrender , but that will be a bad proposition at this moment when the maturity is so near . The amount you get will back would be as per the policy document you have got, why havent you looked at it ?

      1. GODFREY CHERIAN says:

        THANKS MANISH FOR YOUR PROMPT RESPONSE. I WAS TOLD BY MY AGENT THAT MATURITY AMOUNT AFTER 10 YEARS WILL BE APPROX. RS.2O LAKS. I DONT THINK ANY THING IS WRITTEN ON THE POLICY DOCS. IS IT RIGHT. WHAT IS YOUR SUGGESTION, WILL I GET AROUND 20 LAKHS.

        1. If its not written, it does not exist . Generally you get Sum assured + Bonus .So you will get sum assured and whatever is accumulated in BONUS , in the long you generally do not beat inflation with any kind of traditional policies

        2. If its not written, then it does not exist. your policy document clearly states what you get

          1. GODFREY CHERIAN says:

            dear manish,
            i checked with LIC today and gave them all the policy details, I was informed that the maturity amount will be around 15 Lacs. I feel cheated, because while taking the policy in 2003 the agent told that maturity amount will be around 20L. (18.5 L to 20 L). the last policy amount i paid was in 2008 with total premium of approx. 10.5 L. Had i invested in some other products, definately it would have been double by now. what is your suggestion. I totally agree with hhegdenaveenn on his quote “stop cheating innocent people of india using words like ‘Anand, Suraksha..etc’. Life insurance is becoming totally meaningless in india due to high inflation. I would say ‘stay away from LIC policies’. Better go for term plans & enjoy rest of your money when you are ALIVE!

            1. Yes .. note that agents just give the approx figure on higher side which is not possible in most of the cases. Right now its better to bite the bullet and make sure you buy things only when you are clear what you will get.

  109. Kamati says:

    Hi Manish,

    I have Jeevan Anand Policy which was taken in 2007 with SA of 5Lakcs. Recently I have gone LIC website with my login then I am able to see some vested bonus against my Jeevan anand policy.

    Can you please through some light on this vested bonus as I am planning to stop this policy from this year onwards as have completed 5 years and will make it to Paid up?

    Please provide your valuable suggestion that will helpful for everyone in this forum.

    Regards,
    Kamati Srisailam

    1. The bonus is declared per year and gets accumulated, which you get at the end of the maturity . So as you will make it as a PAID UP policy, you will get the accumulated bonus also at maturity

  110. Rajesh Sen says:

    Dear Manish

    I have taken a Jeevan Saral policy for no reason as i was looking to take an insurance policy without knowing any thing but after 2 years I got to know that I was wrong.
    I had taken it on NOV – 2011 ,what is the best for me paid up or surrender, My premium is 3000/- PM/ please suggest..

    1. Better surrender it

  111. siva says:

    Hi Manish,

    Thanks for the informative article.
    Following are the 2 policies that I have taken from LIC :
    1) Jeevan Ananad : yearly premium – 25319; sum assured : 500000; policy term: 21yrs; premiums paid so far: 3 (4th one due by this May)
    2) New Jana Raksha: Package policy(10 policies) with the premium of 22.8K per year. only one premium paid so far that was in september 2012.

    Please suggest in what ways I can get out of these without significant loses in future. Either surrender or paid up. Please let me know if I make my Jeevan Anand policy as paid up, what is the expected amount of return i would be getting at the end of 20yrs tenure based on the current and expected inflation percentages?

    Regards,
    -siva

  112. Deepesh says:

    Hello Manish

    One of the Lic agent suggessted me a Lic plan(Bima gold Table 179)
    IF i invest Rs 30k p/m then I would get 15% of sum assured(30k) on 4,8,12 years respectively

    And on maturity I would get (8lac)

    If I invest same amount on PPF account even I get the same amount on maturity after 15 years

    so can you suggesst on which plan to invest?

    1. Yes, the agent has said right ,but the question you need to ask is what is the % CAGR return out of hte policy ?

  113. Deepesh says:

    Hi Manish

    One of the Lic agent told me to invest in Bima gold plan(e.g 30k/pa) ,I would be getting 15 % of the sum assured at the end of 4,8,12 years

    and then at Maturity I would get a lump sum around 8lakhs

    I am confused how can 1 predict maturity amount that too after 16 years , is it worth taking this policy?

  114. HI Manish

    I am 25 years old. I have taken a LIC New money back policy of 25 years. every 3 month in pay 1332 rupees and also 5 years completed so please tel how many money me get after 25 years. pls guide me i want another new policy so which is best for money saving.

    1. You cant say an amount like that . Whats writtten in your policy document ?

      1. Money back – 1,00,000

  115. Sudheer says:

    Thanks for your popular book ‘Jago Investor: Change your Relation with Money’ i just got that yesterday. Here i want your guidance, last year in a hurry to save tax i have invested in 10 Lakh sum assured for 28 years LIC saving cum insurance policy. Later, with my seniors i come to know that it is neither giving full insurance nor savings, around 5-6% (No idea about this ). Due to this reason, i am planning to stop paying premiums and save and invest through SIP in ELSS and get a term insurance. If the Jeevan Anand can get me around not less than 7.5% annual return (Considering, even in FDs in long term considering 30% tax slab, returns will be less) i am planning to continue it.

    1. Yes Jeevan Anand can get you around 6-6.5% . If you are not going to invest in Mutual funds , then you can continue it .

  116. Sohil Shah says:

    Thanks for this wonderful article. I just have one query.
    – I have paid 3 annual premiums each of Rs. 60050 for LIC’s Jeevan Saral Policy. Now I am not going to pay anymore premium to the policy. I do not want to surrender the policy as it will just return me nothing. As I have paid premiums for 3 years, it has acquired paid up value. I just wanted to know HOW MANY MORE YEARS it will take so that the maturity value acquires at least the value of my 3 premiums i.e. Rs. 1,80,000?

    Appreciate your help.

    1. You will only get your paid premiums now on maturity . not before that ..

  117. Ajit Singh says:

    And i have given 2 premiums means 72ooo + 72000= 144000. Its not possible to surrender as 3 years not completed. I am 28 and i calcuated on every aspect according to your book. But all comes to a stop with a question- “Can v beleive on the table of jeevan saral? Even till 10 years i am getting around 13lakh and same amount gives around 11 in PPf. Please advice

    1. You can believe the table on jeevan saral if its on LIC website or the policy document

  118. Ajit Singh says:

    Dear Manish,
    I got your latest book ” How to be…10steps”. And the first step made me fall from my chair as i invested my hard earned money on Jeevan saral LIC. paying in two parts 24ooo and 48000/annum(parental pressure). But reading your book i calculated and if invested for more than 10 years its beneficial than putting in PPF for same period. Now the important question-“the table given by jeevan saral for 35 years.can v rely on that”. Please answer.

    1. Yes ,you can rely on that .

  119. Shob says:

    I have an LIC Money back policy which has completed 5 years. Can i stop paying premium’s for this policies? I have received one payment money back. What will be the impact on the returns. I have another LIC Jeevan Saral paid 2 preminums. Want to stop the payment after one more premium instead of closing the policy as i will not get my amount.

    Is it worth doing it and invest the same amount in my PPF account.
    What are the drawbacks if i stop the premiums.

    1. Stop it after getting the next money back

  120. bhanuprakash says:

    Sir,
    I am looking for a good children plans & i have decided to go for LIC children plans.
    please help me to select a plan which can cover my daughters education and marriage.
    However, many say, “Term insurance plan” is good compared to “children’s plans”. Kindly advise, which one to go for.

    Thanks in advance,
    Bhanuprakash

    1. A normal child plan will not give you any life coverage which is very important from security point of view, and also from returns point of view children plans are not that great , especially traditional plans from any company . It will give around 5-7% max .

      By combining a term plan and another investment option like mutual funds, or even PPF , you can create a better structure for yourself.

  121. Narinder Tiwari says:

    Hi Manish,
    I have LIC Jeevan Anand policy . I took this policy in 2007 and paying the premium regularly. This year, before paying the premium, I check the surrender value. It was 1,25,890 against the premium I paid 156000 (25974*6). So I pay the premium for 2013 also. I just want to come out from the Policy with no Loss at-least. Do you think, it would be better to continue with this policy in future.

    1. I dont think it makes sense .. The only way you make no Loss is by continuing the policy for long enough, which itself is a loosing proposition . I would say dont get into that mindset of “at least I should get what I paid” . Its just a wrong way of thinking .

  122. Ramakant Chauhan says:

    Dear Manish,

    This year on 21st Jan’ 2013, I took Money Back Policy from LIC (Table 75, 20 yr term) with yearly premium of Rs. 22,949. The S.A. is Rs. 3,65,000. I’ll be getting 20% of S.A. from 5,10,15 yrs of survival & 40% of S.A. + vested bonus after 20 yrs.

    After reading so many articles on endowment & money back, I feel I’ve made fool of myself. I’ve already planned to take 1 cr online term policy from HDFC. But I’m confused about this LIC money back plan. Should I continue with it or surrender it. I never knew that I’ll not be getting anything if i surrender it with in 1st year of taking it. Kindly suggest!

    1. You are in a bad situation now . You will not get any money back now unless you pay 3 yrs premium and even after that you will get peanuts if you surrender back in initial years . it would be really painful , but I think the best thing you can do is forget this and restart your investments .

  123. Rajesh says:

    Hi Manish,

    Iam having few doubts regarding the comparision of LIC PLANS and others.Please take this on a positive note and clear it.
    LIC is 56 yrs old company and has largest market share in Insurance. Incase a person like you suggested not to invest in LIC when it was formed in 1956, where had been the investments made till now.And as per the Indian mentality, i wonder whether so many people saved so many crores of money for longer terms into the instruments which you have told? How many people till now continued the investments in the same instrument continuously for 10 yrs?
    Though the returns or IRR is low.what i feel is a part of the investments should be made in LIC also just because there is a mandate to pay it for longer terms.
    Please correct me if iam wrong.

    Rajesh

    1. Yes Rajesh

      There is no issue if you are ok with low returns . Its totally fine . Its your choice . If you are happy with a small insurance by paying a large premium and if you are ok with 5-6% return in long term , then you can invest in any endowment plan .

  124. charan says:

    Hello Manish,

    I am 28 years old. I have taken Jeevan Anand and Jeevan Saral in Feb 2012 at Sum assured of Rs. 5 Lacs and 2.5 L respectively and Premium payment term is 21 years for both policies . I am paying monthly premium of Rs.2190 and Rs.1021 respectively through ECS system.

    Now, i wanted to surrender both the policies and wanted to invest the same amount or more in Gold and PPF.

    I am already having one more policy “Jeevan Shree” of 5.0 L which was taken in 2002 and paying premium of Rs.24700 per year with payment term of 20 years.

    Can you please guide me whether the idea of surrendering Jeevan Anand and Jeevan Saral immediately is suggestable or should i wait till completion of 3.0 years and then surrender the policy.

    1. I would suggest better just stop the policy and do not make any payments further !

  125. Varsha says:

    Hi

    I had taken a policy in 2011, LIC (money Back after 20 years), But one thing is confusing me i.e how much amount i will get back after 20 years . Sum assured is 3,00,000.
    please reply me as soon as possible

    1. I guess somewhere around 5-6 lacs

  126. Billa says:

    Hi Manish,
    I am 24yr old bachelor and i would like to invest premium of 30,000 to 40,000 P.A…Please give me suggestion which will be better to me.

    If possible please posta copy on mail
    Warm Thanks,
    Billa

    1. I would say invest in ELSS mutual funds

  127. Nagraj says:

    Hello Manish,

    My self Nagraj and planning for jeevan anand 50 L for 32 years

    Sum Assured : 50 Lakh for 32 Years
    Double Accident Benefit : 50 Lakh
    Premium yearly : 153000
    ==================
    Returns :
    Sum Assured : 50 Lakh
    Bounus : 76 Lakh
    Final Bonus : 77 Lakh
    ================
    Total : around 2 Crore
    I feel 2 crore is good amount, please let me know what do you think.

    I don’t want to invest in Mutual funds at present, but fine with PPF, NSC, RD etc

    Eagerly waiting for replay.

    1. But the life cover is how much ? I guess its only 1 crore ? check how much will you get in case of death . Also why not combine PPF + Term plan ?

  128. Rajasekaran says:

    Dear Mr.Manish,

    I have taken ‘Jeevan Anand’ policy and paying premium of Rs.36000/- p.a from 2012 and ends at 2048, the poilcy details as below

    DOB : 13/07/1989 , Rs.1 lacs sum assured each with total 12 policies in addition accident benefit of Rs.5 lacs and the maturity starts from 2039 and end at 2049, the agent shown me that total maturity value will be received of Rs.44 lacs

    My annual income is Rs.6 lacs and recently i took term insurance for Rs.50 lacs and also decided to invest in PPF and MF

    Kindly suggested whether the policy is viable

    One final question whether the insurance plans should be looked as an ‘Investment Channel’ or a back up plan as in case of unprecedented events.

    Regards
    Raj

    1. they should never be looked as your investment plan , insurance is insurance, how can it be investments … Better not go with this option. Its too complicated and do you know what is the IRR of the whole setup !

  129. Munesh Kumar says:

    Dear Manish ji’
    I have taken money back policy-25 years (table 93 plan) starting from 28 jan 2012
    till now i have paid 3 premium of Rs. 25898-/ half yearly. according to policy they will pay me 1.5 lac at the 5th,10th,15th,and 20th .can u tell me plz what amount will i get at the maturity period (i.e. after or at the end of 25 yeras) . now i m very confused , now i think that i am paying more what i will get at the end. should i carry this policy or drop out plz guide me. i am 24 years old.

    1. Check out which policy is it and on the LIC website it must be clearly mentioned how much will you get at the end .. Mostly in your case you are getting 15% in money back each time and rest 40% at the end.

      1. Munesh Kumar says:

        sir,
        if i want to surrender this policy what is the right time so atleast i dont loose any money what i have paid.

        1. then you will have to continue the policy .

  130. Nitin Shimpi says:

    Hi Manish,

    I have gone through your article. It is really helpful for me. Today I have taken LIC jeevan saral plan policy. and after that I saw your article. please advise me is this polity beneficial for me. my annual premium is 24k. for 20 years. If this is not good policy so which policy should I get?
    I am married person so I want policy like which can give return for future as well as insurance cover. please advise me. I am now count on your advise.
    my

    1. I would say give it back with in your freelook up period of 15 day !

  131. Ekaveera says:

    Hi manish, Thanks for the nice Explanation on LIC basics. I Really like the math involved in it. Can i get any math problems on these LIC related stuff, so that it will be more clear. if you have any link or book please share it.

    1. I am not aware of any issue like that

  132. Venkatesh says:

    Hi Manish,
    This article is eye opener. Thanks for the informative article.

    I need a clarification on surrender of the endowment policy.
    Can we surrender the policy while we are paying premiums?. or Can we Make the policy Paid up and then surrender it.

    Which option would give me better surrender value?.

    Thanks and Regards
    Venkatesh

    1. Venkatesh says:

      Policy details… I have paid 10 years of premium 10,000 each year.

    2. You can surrender anytime after 3 yrs .. Surrender will always give you less money than you paid .

  133. Sheetal_p says:

    Thank you for this post!

    This has certainly cleard the doubts that was lingering on my mind when i paid annual premium of my three LIC policies early this year.

    My father had opened these policies for me some 7 years back. I have three Money back policies with different maturity periods – maturing at 15, 20 and 25 years period. Total Annual premium i have been paying is 28,390. I had never seen the policy docs since my dad started up this for me. I was of the opinion i would get atleast 8 lacs at maturity considering the annual premium payment. Couple of days back I saw the policy details and was shocked to find out that the total Sum assured for these three policies comes upto 4,25,000. made no sense to me at all.

    I am a huge fan of PPF. I immediately opened the online PPF calculator which showed that if I invest 28,000 every year in PPF for 15 years, the maturity amount will be 8.65 lacs.. A suerty that my investment doubles in 15 years. LIC policy does not even give any indications on accrued bonuses on an annual basis. What a waste it is.

    Lastly, please advise if it would be any beneficial to make these policies as paid up after 7 years.

    1. I think your Bonus will also be there , not sure if you looked at it or not .. you should expect around 6-8 lacs if the sum assured come around 4.25 lacs ..

      However PPF is a better option I must say !

  134. Monica says:

    Hi Manish, thanks for the good article. I’ve not quite understood (or rather have many doubts on) the loan repayment procedure for LIC policy. Can you please explain the following
    1. My agent told me interest rate is 10.5% and interest needs to be paid half-yearly. Say, if i take a loan with a pay-back period of 3 years, will the interest amount be the same for every half-yearly payment cycle or will it be compounded
    2. The agent also told me, I can pay back the loan amount in part or in full at any time during the period of 3 years. Is that true?
    3. In that case, will the interest amount for next 2 years be reduced if I made a part-payment in the end of the first year
    4. The agent also told me if I choose not to pay the loan amount I can do so and the amount will be deducted from the claim amount. Wanted to check if it is that simple as it sounds or will it have any hidden effects to the maturity amount itself

    1. Monica

      I am not clear on LIC loans .. please open a thread on our forum to discuss this, and surely you should get an answer – http://www.jagoinvestor.com/forum/

  135. hi Manish ,

    very nice article , you have explain it in details , i never get the such detail information from LIC agent. thanks a lot manish

  136. i have gone through this article and found what you are presenting is JUST FALSE and ANNOYING i initially thought it is useless to comment THEN I REALISED as an AGENT WITH LIC it is my duty to respond………… I POSITIVELY HOPE you are not paid for WRITING AGAINST LIC ………. ………… please refer to the link given below http://www.licindia.in/know_lic.htm#2 which is self explanatory. INSURANCE as an investment is different, you can not just compare any other investment with INSURANCE ……. ( YOU CAN NOT COMPARE oranges with APPLES ) ……….. and when we sell INSURANCE we sell a long term contract to the client and hence there is no point in calculating or worrying about surrendering. I REALLY PITY THOSE AWAKEN CLUB MEMBERS ……..going in to FOOLS PARADISE by paying FEES ……… JAI HIND…… I REST MY CASE and i further not interested to know what is your response………

    1. Thanks for enlightening us .. please point out the false statements in the article, so that we can correct it . thanks for your support . Investors community is really looking for agents like you, who are ready to point out the mistakes ! .. thanks once again

    2. Indian says:

      Manish is right,
      @chandramouli kalyanachakravarthy — you are simple IDIOT..not accepting facts…and selling useless ploicies..to loot the people.

    3. Rajesh says:

      Dear Mr. Agent,

      It is understandable that the article is ANNOYING to you, but please do point out what exactly is FALSE.

      Regards,
      Rajesh

  137. Aisha says:

    Hi Manish,

    I am 26 and want to take some good tax saving investment policy..My annual income is upto 3 lac.Please guide me which one will be the best for me.

    This will be my first investment/policy ever.

    hoping to get some good suggestions..

    Thanks

    1. What kind of risk you can take on your investment and what is your future goals ?

  138. thamaka says:

    Hi Manish,
    I need an info regarding loan on LIC policies. If I take loan from existing LIC policies, will it reflect in CIBIL report? I am planning to go for Home Loan. If I take loan from LIC policies before taking Home Loan will that affect my eligibility on the Home Loan?

    Thanks
    Thamarai.

    1. Yes . It should be reported . Note that if you are paying an EMI on it , its going to be reported . Even though its a secured loan, still its going to build your repayment record.

      1. thamaka says:

        Hi Manish,
        Thanks for the reply. For the LIC policy loan, there is no monthly EMI like personal loan. I have to pay just interest for the principal amount half yearly. I can repay my principal amount When I get some money.

        Since there is no EMI, will it get reported to CIBIL?

        Thanks
        Thamarai

        1. hmm… This is tricky then .. Any kind of secured loan should also be reported to CIBIL , just like a secured credit card or secured personal loan does . Now LIC is not a NBFC , but can give loans as LIC policies as security . So I am now not sure if it will report to CIBIL about it, But if a bank gives you loan on the basis of your policy , then it will surely update CIBIL about it .

          1. Vishnu says:

            Hi Manish/Thamarai,
            I’m in same situation. I’m going to apply for home loan and I want to get loan on my LIC policy. I want to know whether home loan eligibility will be reduced, if I take loan on my LIC policy. If you already went for loan, please update me what happened in your case.

            Thanks,
            Vishnu

            1. So you take loan on LIC policy and tell the bank that you want lesser loan from them . I am not sure what is the issue here ?

  139. Ranjeet says:

    Hi Manish,

    last year I have taken Jeevan Saral ATM plan policy . Details are below

    DOB – 16/09/1985
    Premium Amount – Rs. 15,925 Qtrly
    Date of commencement of Risk 28/06/2012
    Date of last payment 28/03/2033
    date of maturity ( First Policy)- 28/06/2033
    S.A – 12,50,000.

    Actually I am confused whether i am investing in good policy or not. Agent had gave me 13 policies . Each Policy have different date of maturity, last maturity date is 28/06/2045. Please advice shall i continue this policy or not. In case I continue this policy how much Interest I will get. also let me know what other Investment can i do ??? Awaiting for your prompt reply.

    1. the policies which you have , do you know about the maturity return in terms of percentage ? I want you to do the IRR analysis which is explained here – https://www.jagoinvestor.com/2011/02/calculate-insurance-policies-returns-video.html

    2. Indian says:

      @Ranjeet
      I am sure that your agent had misguided you…
      If you invest same amount in PPF or even in NDC Bonds… you will get at least 30 – 35 lakhs.

      It would be better for if you stop paying premiums from today itself and also forget money what ever u have paid till now… and put your hard earned money in to some other investment options…like PPF or NDC Bonds or Post Office ..etc.

  140. Ajita says:

    Hi Manish,

    I am a 26 years old fixed salaried employee. I recently took two LIC policies to avert ITax. However, I am realising now that I might have been duped by my insurance agent.

    1. LIC Jeevan Saral, premium 24,500 per year for 35 years &
    2.LIC Jeevan Anand, premium 21,324 per year for 25 years

    So far I have paid two premiums only. If I stop both of them I would loss Rs. 22,912.00

    Therefore, I have decided to discontinue with the Jeevan Saral Policy and to carry on with the Jeevan Anand Policy.
    What is your view?
    A really honest, no matter how much brutal, reply is really appreciated. Thank you.

    1. All the LIC policies need to run for atleast 3 yrs , else you loose everything . i am not clear why do you want to stop Jeevan Saral and continue Jeevan Anand ? Also a big mistake which I can see you have done is to save for a tiny income tax money, you have put a big amount at stake .

      1. Ajita says:

        Hi Manish,

        Thank you very much for the reply.

  141. Ashok says:

    Hi Manish,

    My Jeevan Saral policy is for 15 years for 5 lakh. Started from 2008, paying 25000 yearly premium till now total premium paid is 1.25 lakh. If I go for paid up from this year onwards, could you clarify me what is the lump sum I will get when reaching the maturity period. How the calculation will be? during paid up period, will LIC make any charges or cut something in any other way from the amount I paid?

    Thanks in advance!

    1. You will get your paid premiums at maturity + bonus accumulated till date !

  142. Arvind Salvi says:

    Hi Manish,

    I had “Twenty Year Cash and Cover Policy with Profits(With accident benefit)” policy from LIC. Policy details are as follows:
    LIC policy No. :18309679
    Policy term: 20 years
    Commencement Date : 02-JUN-1977
    Last Premium Date : 02-MAY-1997
    Sum Assured : 10,000/-
    Premium amount : 45.40/- monthly
    I got survival benifit every 5 year @12.5% of the sum assured where as I completely missed to claim the maturity benifits (Maturity amount) of this policy which got matured during JUNE 1997.
    Would like to know the way to get the status of this policy and how to get the matured amount.
    Request you please guide me.

    1. Incase of cash back plans , at the end of the policy you get a small amount because of the money back . Did you check your policy brochure ?

  143. Srinivas says:

    Hi Manish,
    I took Jeevan Anand LIC for 20 years since 2003. I am paying 52,843 for every 6 months. Upto now, totally I paid 10 years. I don’t want continue with policy.
    could you please advice me?. Should I surrender my policy ? policy itself continue further 10 years?
    please advice me
    thanks
    srinivas

    1. Make it paid up if you are not hard pressed for money !

      1. Srinivas says:

        Hi Manish,
        thanks for your answers. How much Should I expect after completion of my preminums (20 years). Agent saying that I might get 50 + 20 = about 70 lakhs (maturity benifits, etc)
        please let me know.
        Thanks,
        Srinivas

        1. I seriosuly doubt .. you will get your sum assured + your bonus . Thats all .. so just check what is your sum assured , should be mostly equal to the total premium you pay . And regarding bonus, its generally 50-55 per year , so another 10-12 lacs for a 20 yrs tenure . So at the end , you should not expect more than 5-7% in total on compounded basis

        2. And the best thing would be to ask your agent, how he arrived on that 70 lacs figure ? Also ask him best and worst case and also ask him to do it as per the information given in the brochure

  144. Vivek KM says:

    Hi Manish,
    I have taken 2 LIC Jeevan Saral policies, one in my name and second in my wife name. Both policies have the same commencement date.
    After reading the forums and other notes on this I am really confused as whether I am investing my money in wrong product of LIC.
    I have a loan of 50L for which I am paying the EMI from 26-Feb-2013. I got attracted from the table that LIC agent presented me, like in 10 years my money was getting doubled.
    Can you please advice what should I do now, continue or change to someother plan. I need to pay my loan so kindly advise something which is beneficial to me.
    Apart from this I have Birla Life insurance for which I am paying premium of 15K annualy and getting 40L cover.
    For LIC policy:-
    My DOB: 02-Jun-1980
    Commencement Date: 24/05/2011
    Policy term: 30 years
    Premium: 60650/- payable Half Yearly
    Sum Assured: 2500000/-

    Many thanks for your advise.

    Thanks,
    Vivek KM

    1. Vivek

      Can you share what was the attraction point for you in that plan ? Money doubling in 10 yrs ? What is the attraction in that ? You can make that happen in 8 yrs in FD ! . Do you know what is the percentage return you will get in your policy , if you do not know that it means you have no analysed it yet .

      1. Vivek KM says:

        Hi Manish,

        That was the big mistake I really did and now I am realizing it. He gave me a paper where a table was printed with projection value of 10%(he said it will be more and other stuff and if I continue this policy for long I will be getting more than double the value). The lucarative thing was from 11th year onwards if you continue the policy the money was adding in a large number, I think addition on 2-3L per year, so that thing attracted me :(. I have that sheet, do we have any place where I can upload that.
        At the end of 10th year I would end up paying 120000/- and as per the table I was getting return around 24L or more.
        I am not sure what is the current percentage that LIC is giving on maturity of the policy and I have discussed with many folks from insurance and they are unaware of this.

        I request you to please advise me what should I do?

        Thanks,
        Vivek KM

        1. Those paper has no significance . Its just a illustration which agents give . IRDA has clearly said that agents can give illustrations with 6% and 10% assumption. However in reality anything can happen . Your policy document clearly mentions how much you will get and on what assumptions . Wheather it will be 6% at the end or 10% would depend on the kind of bonus LIC declares each year. Its seen that in general its hardly matches inflation in long run.

          If you have already passed 3 yrs of policy, better make it paid up now and stop paying any further premiums . This is the best you can do right now.

          Manish

          1. Vivek KM says:

            Do you mean to say, I should stop making payment to that policy on completion of 3rd year. So in that case can i get my money back, if not full than how much I can expect.
            What do you advice where I can invest my money, any other policy/FD/equity/MF etc.
            Can you plz be more clear.
            Thanks, Vivek KM

            1. If you have not yet compelted 3 yrs , the best you should do is stop the policy all together. If you have a moneyback next year itself, then check if you will get more than the premium paid or not .

      2. Anil kumar says:

        FD makes money double in 9years 9 month and doesn’t has life risk cover and no tax benefit…..and if interest is more than 10 thousand an additional tax levied…

        1. At what interest rates ? and what about the liquidity point ?

  145. Foram says:

    Hi,

    Manish, its a good article. Helps people understand how LIC policies work.

    Would just like to say that people have different requirements. You may say LIC returns are only 5% but pls provide me with a better proposal. Equity may give you 20% return in a yr but someone who is not very financially savvy as you are may lose out all their hard earned money.

    LIC provides very good risk cover on life which should be considered while doing a financial planningand the entire idea of 20 yr term is to have a regular saving.

    as rightly mentioned by Chiraag Bhojwani, Jeevan Anand does provide good risk cover.

    If you are against insuring, does not mean other should do the same. Pls do consider their needs and requirements before advising them against LIC. You are mis-guiding the investors who are looking for help and advise from you.

    1. Forum

      Thanks for your views .. Lets say a person has a requirement of 1 crore sum assured . Please give me what will you suggest to this person ?

  146. Manjunath says:

    Manish, i have a Money back policy of annual premium 31000, already paid 3 premiums and have to pay 4th yr premium now. I am no more interested in policies as a whole after calculating the returns and for longer durations as Life is very short. Now should i pay another 2 premiums and get the first 20% back and make it Paid up or simply forget already paid premiums.

    1. Which means you will pay 62000 in next 2 yrs . How much will you get back overall as 20% and also while surrendering ? It might make senses , just do the calculations once !

  147. Ashok says:

    A simple tip for all you guys,
    LIC is good If you go for minimum maturity periods, most of the policy has minimum of 5 years maturity. Stick to this decision to take a policy for only 5 years even then your are stressed by an agent to take the policy for 20, 25 and 30 years, this is because they want to enjoy the commission for such a long time. Think about it, just 5 years time will allow you and some how you can pay for 5 years and finish it off, It is better instead of taking policy for a long time and suffering unable to pay to reach the maturity and thinking to surrender this will lead you to loss your money. Do not surrender the policy, just take for 5 years and pay only for 5 years, after policy is matured you will enjoy the money you paid + bonus from LIC + risk coverage.

  148. Guruprasad says:

    Hi,
    I have paid premiums for two years in Jeevan Anand policy. Will I be able to avail loan on policy?

  149. ritesh says:

    Hi Manish,
    Query on Life Insurance, all policy from LIC
    1) Jeevan Mitra (since 2004) Premium Rs 10516/- (2 lac cover= maturity 2026)
    2) Bima Gold (since 2005) Premium Rs 7774/- (2.2 lac cover= maturity 2025)
    3) New Bima Gold (since 2006) Premium Rs 8345/- (2.2 lac cover= maturity 2026)
    4) Whole Life Policy (since 2008) Premium Rs 61804/- (5×4= 20 lac cover = premium paying till 2044 maturity 2058.
    I had previously ULIP’s which I have cleared almost with little loss 1 year back.
    Now my total policy above is 26.4 lacs and total premium Rs 88,349/-. My query is
    Should I surrender my policy, I will take a loss of 59% for all my premium paid,
    Thanks

    1. Better make your policies paid up now ..

  150. Ankit says:

    Hi Manish,

    My father in law had taken a 20 years money back plan in May 1997 and regularly paid premiums till May 2011 (15 premiums). But he did not pay the May 2012 premium for reasons best known to him only. Unfortunately he expired in Dec 2012 (accidental death). Should nominee be getting any death and accidental claim benefits from the policy. ( It also seems he already received 20% each at the end of 5 years, 10 years and 15 years from the policy commencement).

    Regards

    Ankit

    1. Obviosuly NOT .. The policy is as good as STOPPED , he will only get the Surrender value now which was as on that date when he died.

      Manish

  151. Praveen says:

    Hi Manish,

    I have paid 2 year premium. One of my friend advised me take 1st money back and stop premium. He told it is more profitable that surrendering or making it paid up after 3 years.

    Please advice.

    Praveen

    1. Yes, if your first money back is due in just 1-2 yrs ,better take it and then make it paid up

  152. Hari says:

    Dear Manish,

    My hearty congratulations and appreciations for your guidance!
    I want your help in making a decision in respect of my jeevan anand policy. The details are as follows:
    I have taken 19 policies (Rs 100000 each) for Sum assured of Rs 1900000 of Jeevan anand with profits and accident benefit. The total Premium is Rs 50097 payable annually. The policies starts maturing from 28-Jan-36 to 28-Jan-54. Start date of the policies is 28-Jan-2009. Date of Birth is 15-Sep-1981. I have paid 4 premiums amounting to Rs 200388. The current premium is due and also I need to submit my investment declaration by this week. I am in a dilemma whether to continue with Jeevan anand or surrender. Please guide me. Also please let me know what are the other alternatives.

    1. Your situation is bad overall .. you at at a juncture where you will face the maximum loss. Surrendering the policy now means taking the maximum loss, but continuing the policy also means a big loss in terms of getting very low returns ..

      1. Hari says:

        Many Thanks Manish.Would surrendering JA now and taking a PPF + term policy help me reduce / cover the losses in the long run. Please advise

        1. yea thats a right decision . go ahead !

  153. Ramya says:

    Hi Manish,
    Thanks for your wonderful post!

    I have a question on Jeevan Saral policy.

    Does the loyalty addition declared in the policy is not guaranteed ? Is it possible for you to explain the disadvantages of Jeevan Saral. I totally agree that Mutual funds gives more return on investment but do we have some valid points which totally defer opting for Jeevan Saral. My intention is to showcase the disadvantages of Jeevan Saral as an individual policy (and this shouldn’t be done by comparing it with Mutual Funds in which the latter always benefits).

    1. Its guaranteed .. In policies you will see something like Rs 50 per 1000 sum assured of loyalty addition . The disadvantage is simple .. low returns, not liquid

  154. Aarti says:

    So Manish ..as per your article, are you suggesting not to invest in LIC and invest in others? and what are those?

    1. NO thats not my suggestion . the decision has to be taken by the person who is investing . If he/she is ok with the returns, liquidity and other points of any policy, then she/he can invest..

      Manish

  155. Karthik says:

    Hi,

    My policy term is 77 and premium paying term is 17. My SA is 10,00,000 and I am paying ard 63,000 per annum. I am really confused about the policy term and premium paying term. When will my policy mature? Is it after 17 years?
    If that is the case what is policy term? And what will be the amount after maturity?

    Thanks,
    Karthik

    1. No , it will be 77 yrs !

  156. Sandeep says:

    Hello Manish,

    Nice article !
    I also have LIC moneyback policy started in 2004.
    SA: 250000
    Premium: 15767 (yearly) due in March every year.
    Moneyback: 50000 (i.e. 20% of SA every 5, 10, 15 yrs)
    This year premium is still not paid. My plan is to surrender this policy after paying premium next yr 2014 i.e. 10th yr so that I will get moneyback benefit. Policy copy is not with me now but as per website (https://customer.onlinelic.in/periodic_moneyback_003_benefits.htm) and ofcourse mentioned by you, 30% of the basic premiums will be paid (excluding 1st yr premium & all survival benefits paid earlier).

    Whats your view? should I surrender now or next yr after getting moneyback? (ofcourse for that 2 premiums have to pay)
    What in case of paid up option? (didnt see any option on website)

    -sandeep

    1. Better make it paid up !

  157. B Deka says:

    Manish is absolutely right. In my opinion we should no take Life insurance policy as a means of investment. Because what we shall get at the end of fifteen or twenty years will be very less for us to serve any purpose. We should open life insurance policies for taking risk coverage only. And term policies are best for that.

  158. Basudev says:

    So far I understand Manish is absolutely right. In my opinion people should open LIC policy for risk coverage only, not as an investment and term polices are best for that.

  159. Anand says:

    Hi Manish,
    Thanks for the article. It is very good one to understand the LIC policies.
    I have below question.

    My father has taken Jeevan Mitra policy in Oct 2000 for SA 80k with premium 2070 per quarter for 15 years, and Endowment assurance policy in Aug 2004 for SA 2 lacs with premium 2155 per month for 9 years. He is 58 years old now.

    Should he continue paying premiums or surrender them?
    Please suggest what can be done.

    1. If its just 2-3 more premiums, let me complete !

  160. KRish Nals says:

    Hi,

    I`ve 2 policys Jeevan Anand and Jeevan chaya) of total 30K permium per annum started from 2008 and paid 5 yrs of premium already. I got the awareness of term insurance(and the probable returns after 11 years from now i.e after maturity) which isnt that good even as of a PPF or NSC will give.

    So decided to make it paid up. I`ve taken 60k of loan(now i realised the load interest is increased from 9% to 10% by LIC). I am reapying it. I wanted to make both the polices paid up.

    My question is :
    I`m planning to complete the loan shortly.
    Also at same time i can stop my premium payment due from next month., will this automatically make the policy as paid up? or LIC has something to ensure this is made paid up(any document for saying it is paid up). Because when i say to my agent i`m making it paid up, he says dont. But i`ve made the decision. So will stopping premium will make the policy as paid up now ?

    Thanks for your help in ad.

    Regards,
    Krishn

    1. While stopping the premium makes it paid up , its better if you just mail them saying that you want to make it paid up !

  161. vinod kumar says:

    Hai Manish

    I have taken lic policy jeevan saral 1 year ago my age is 26 year agent ask me it give me 10% of return i want to know about current return of of this policy

    1. You should understand that LIC policies are highly illiquid .. so right now if you want your money back , you will loose a big amount .

  162. Rakesh says:

    Dear Manish ji
    a agent from SBI Life shown the calculation of the reversionary bonus given by the SBI Life is @6% of Sum Assured(SA) to say for 15yrs term & SA 5lakhs will be paid at maturity
    will be 5lakhs plus Bonus 4.5 laks=9.5lakhs
    is it justifying? Official website is showing the reversionary bonus amount is 168000
    they are not showing the process of calculation
    could please explain their process

    Rakesh

    1. What is givin in official website will be final . Ask from sbi customer care on that or ask on your forum http://www.jagoinvestor.com/forum/

  163. Sukomal says:

    Manish, I have ICICI pru whole life policy, which was taken by mistake in Jan 2011.. Now I dont want to invest any more in this as I paid min lock in period of 3yr. However if I withdraw the money , I see i will get very less amount not even half of my total premium paid. Now i am thinking to keep this policy active without paying any premium. do you think i will at least get the money that I paid for after 5year or 10year(which is matured year)..

    1. Yes you can get that. but how does it help ? If you get the amoutn you paid after 10 yrs , how does it make this investment great .. Its just a way to boost your inner ego 🙂 .. that you didnt loose. . if you get 50% now , put it in FD and in 7-8 yrs it will be 100% .. the same thing which you want from the ULIP

      1. Sukomal says:

        Thanks for such a clear thoughts.. you are doing really great man 🙂 hope more to come in your site…

  164. vikas says:

    Hi Manish,

    Was just going through your article, no doubt it is really an informative article.

    please let me know if there is any thing called additional bonus on LIC premium, yesterday I got call saying he was talking form LIC, he asked me whether I had received any bonus till the time or not when I said no, he said agent actually mention there code so that they receive the bonus, they he asked em about the premium amt, I said over all for my family I have around 70-80k as premium, then he told me I should receive around 2 Lakhs as bonus in march13. he would provide me the code which I would need to give his boss when I receive call again, till now I have not given him any details except my address which he already had.

    the most weird thing was he said do not discuss the same with your agent else he would change the code again and you may not receive the bonus amount.

    I doubt if he was from LIC, though I am unable to contact any body in LIC as there call center I believe doesn’t work.

    1. I believe he was some LIC agent, and was trying to pursuade you to change the agent code somehow through his tricks . Dont get into that kind of trap … There are policies where FAB can be there which means FINAL ADDITIONAL BONUS , but that is given at the end and depends on LIC at the end.

      1. vikas says:

        thanks manish, even I was wondering how could a person tell the bonus amount without even asking the policy names. Also I have no policy which is maturing in the neat future.

        thanks for clarification, let him call back, will take care of that person.

  165. Sharad says:

    I have taken LIC’s New Bima Gold in Year 2007 and have already paid 6 premiums. After reading your article, Now I have decided to stop paying next premium which is due in this month only. I have also taken term plan of 50 lacs this year, that will cover my insurance part.
    Manish, I would be highly grateful to you if you could suggest whether I should surrender the policy or leave it as it is without further paying the premium?
    Thanks in advance.

    1. I think you can make the policy as paid up now .

  166. Ishwar says:

    Dear Manish Chauhan :

    Dear manish thx for providing insurance details its helps us to select insurance. I have one query i want to buy policy for my daughter (8 months) which policy is better for her future. As per my knowledge i am going for LIC Child career plan(no184) or LIC child future plan (no185). I am not believing other MNC insurance like ICICI,Max neyork,Bajaj etc.

    Please you choose which policy i have to take for my daughter plz.

    I can spend yearly premium up to 15000/-

    Plz suggest

    Thx.

    1. We do not recommend any “policy” . Better go with simpler products like FD , PPF etc .. Or you can invest in Mutual funds . take term plan to secure your life insurance

      Manish

  167. ravi says:

    Sir,I just received a phone call from a person who claims to be from IRDA delhi office and they say that I am a beneficiary of additional bonus from LIC and to claim for the sale I should invest RS 25000/-in Reliance Insurance and the IRDA office shall clear my cheque for payment of Additional bonus against my policies.
    Kindly suggest if there is any scheme of this type.

  168. raghavendra nayak says:

    lic policies offer security and protection in case of any uncertainities such as death . imagine a sole bread winner of d family dies. his family has no where to go. with a life insurance policy to a certain extent d family can continue to carry on with dignity and pride. so lic is a must , whether a term or endowment. comparing the returns & doing arithmethics in insurance is a poor bussiness. a responsible person will least do that.

    1. Yes, agree ..

      Can you tell us how much will a 50 lacs Sum assured endowment policy cost as premium per year ?

  169. Asif says:

    I have purchased Jeevan Sanchay policy of Rs 75000/- in Feb-2000 (at the age of 23), for 15 years. Premium amount is Rs 6945 yearly and all 13 premiums are paid.
    I got 18750 twice (in 2005 and 2010). Now I want to know my maturity amount in Feb-2015. Kindly give reply as soon as possible.
    Thanks

    1. Better talk to your agent , he will be able to tell you that

    2. bmkumar says:

      Hi asif,
      I also took the same Jeevan Sanchay Policy from LIC in May 2001 for Rs.1,00,000 SA. I also received 25% of SA ie., Rs.25,000 in May 2006 and May 2011. Wanted to know how much you got on maturity (ie., during Feb 2016)
      Manish Kumar

  170. madhu says:

    Hi Manish,

    I have a LIC policy taken way back in 2001 [ Jeevan shree -I],
    I pay about 24500/- Per year and PPT is till 2016.

    Can i get a Loan on this policy as Housing loan, if so how much as i have only 3 premiums left to pay?
    My Policy Maturity year will be in 2027.
    My agent informed then i will get about 18L by 2027.

    Thank you.
    Madhu

    1. You can get a loan, but not “housing loan” per se .. better talk to LIC on this

  171. Abhijit says:

    Hi Manish/All,
    Thanks for the information about these policies. Now in case of me there is some immediate advice needed. I have a policy called Jeevan Rekha (152) for 25yrs, started in Jan 2005, renewal premium is due just after 18 days from now.
    Sum assured is 2 Lacs, yearly premium is 7253/-
    Question is if I make “Paid Up” that means stop paying the premium from this year itself (considering I have paid 6 premiums already & received 20000 as money back once). Whether I am to get the sum assured at the end of 25 yrs? Am I going to get the money back of 20000 after every 5 years? Should I really make it “paid up” or surrender completely? I saw some answers as “paid up” & few answers as “surrender” little confused. No immediate need of money for me right now.
    Waiting for your advice & guidance….

  172. satheesh says:

    Hello Sir,

    I am new reader of your blog. I am 25.

    I am confused with the term sum assured ?

    I thought that they will provide the below two sum of money at the end of policy term .
    1)Value mentioned at sum assured column.
    2)The premium paid during the term.

    Plz educate me .

    Because of TDS, i have invested in LIC. 1 policy paid for 1 year & other policy is started for 1 month.

  173. RaviD says:

    Hi Manish

    Thanks for sharing this info through jagoinvestor.com, esp when this entire process of the premium to return ratio is pretty convoluted with LIC.

    I want to enquire about the Jeevan Anad policy I registered back in Aug, 2008.

    The details are:

    Policy Name: Jeevan Anand (T. No. 149)
    Sum Assured: 500000
    Policy term: 75 (premium payment term: 16)
    Annual premium: 34801

    I have till date paid 5 annual premiums of Rs 34,801 each. Just want to check with you if this policy is due to mature on 21-Aug-2024? Is this correct?

    I am not really sure how much this policy could get me at maturity but I am already thinking of having it “paid-up”. I ll check with my uncle (apparently the agent as well) on helping me out with that.

    I have this policy registered on http://www.licindia.in but I am unable to get any bonus information on that portal. Could you also please guide me on how to check this?

    As far as other investments go, I have invested in ULIP (Birla Sun Life) – isnt really doing well after having paid the 5th installment just now…….
    and also invested in Mutual Funds: ICICI Prudential – going far better than the BirlaSunLife one.

    I might just look to close the ULIP plan next year after I finish the 5 year tenure on that policy.

    But could you please guide me on how to go about the LIC Jeevan Anand policy?

    Many thanks in advance,
    Ravi

    1. It would depend on your choice of tenure, for how long you have taken the policy for ? Also you are not seeing bonus info , because generally only after 5 yrs of existence the policy has some bonus. I suggest making it Paid up !

      1. RaviD says:

        The premium payment term for this policy is 16 years, and I bought it back in Aug 2008. I called up the customer support helpline and was told I have a bonus of around Rs 84000 on this policy till now.

        1. But that 84,000 is future value, I mean if you surrrender the policy , you wont get 84,000 , you will get a reduced version of value in today’s terms .

          1. RaviD says:

            So I ll go for the paid up option on this policy.

            Thanks for the comments, Manish.

      2. krishna says:

        will stopping premium will make the policy as paid up now ?
        I was tinking LIC may give some policy doc for stating it as paid up.
        Thanks for your help in ad.

        Regards,
        Krishn

        1. Stop premium = PAID UP

  174. Prashant says:

    Hi Manish,

    Which is good LIC policy for 63 years old person.

    Regards
    Prashant

    1. Is your requirement of Pension ? getting a regular income ?

  175. Sri says:

    Manish,

    I have jeevan anand policy for sum assured of Rs. 10L for 20 Yrs. Till now paid 3 premiums. Is the Paid-up method applicable for me? If yes, could you please explain the pros and cons in detail.
    Thanks,
    Sri

    1. Yes , you can make it paid up now .. you can read the article to understand what it means

  176. Anand says:

    Informative article… Appreciate the explanations. For me, only term insurance makes sense. All other insurance policies are just marketing gimmicks if we think sensibly and mathematically too.

    1. True ! , we think alike !

  177. Rahul says:

    Hi Manish,

    Just a little query..

    suppose my monthly take home is 47k, Then what is the tax amount. Also as i read all our posts overnight 🙂 I thought that i will take up some things like:

    1) NSC
    2)Mutual Funds
    3)EPF account
    4)Term insurance

    Can you tell me if its right choice.. Also does term insurance covers tax benefits

    1. Rahul

      There are other elements to be considered while computing your tax. DO you know how to compute it or not ?

      Also term plans come under tax benefits in 80C !

  178. prashant says:

    Dear Sir,

    I like to the details of JEEVAN ANAND policy. i can pay annual premium approx. Rs.5000 for 15 years.

    please let me know the features and benifits of Jeevan anand

    1. Prashant

      The benefits are mentioned here at http://www.licindia.in/endowment_005_benefits.htm . If you are happy with the returns, you can go ahead . Just make sure you understand all the features and how it works . We generally suggest that one should not get into endowment plans for long term investing !

      Manish

  179. Debopam says:

    Hi Manish Vaiya, I have taken Jeevan Anand Policy of SA 3,50,000 for 20 yrs term at yearly premium Rs. 19,086. The Date of commencement is 02.10.2012. Can I change its term to 21 yrs?

    1. No you cant change it like this

  180. Nayaz says:

    Dear Manish,

    Need some advice since i am not getting it from my LIC agent.
    i have a 40L jeevan anand policy maturing in 2020. I have paid 6 premiums so far of about 3.5L each and took a loan last year to pay the premium. i paid them interest this year too. Now i wish to stop paying completely and make it a premium paid policy.
    questions:
    a) do i need to clear this loan?
    b) if i don’t clear this loan will i be charged interest each year until 2020 and will this be eventually deducted along with loan taken from maturity value +bonus?
    c) can i reduce term and policy value to have this policy mature in say 2013? is this possible?( my agent says both cant be done and one or the other only is possible). And if this is possible will i lose anything at the end of 2013?

    This is all so confusing and i asked LIC for a clear picture in writing and yet to receive a response after 10days!
    what is your advice? thanks
    Nayaz

    1. a) The loan has to be cleared by you , otherwise it will be deducted from your policy worth itself . Assume when you get the policy proceeds and your worth is X in the policy, and your loan with interest has become Y , then you will get X-Y

      b) Dont you think this is obvious , if you take a loan , it charges your interest each year , nothing to tell in this

      c) Thats same as Surrender , the policy is maturing in 2020 , now you cant change it , you can just surrender it in 2013 if you want, I can only imagine your state of mind when you will come to know how much you will get from your policy if you wish to get all your money back in 2013 , I can pray for you .

      I can see that you have operated all these years without understanding the impact of your actions . Try to make sure you never do it in future .

      Ask your agent and LIC abotu the number which you will get in 2013 if you want !

      Manish

  181. Rahul says:

    Hi Manish,

    I am planning to purchase a life insurance policy (preferably from some government companies like LIC, SBI etc.) and invest some money in mutual fund. Can you suggest me any good plans. I am looking for cover of 30 lakhs+ and yearly premium of around 20K.
    I am not a citizen of India. So what are the provisions in the law, and will that cause any hassles while claiming?

    Thanks.

    1. I am not sure if you can buy it then ? Are you NRI ?

  182. Abhijit Dey says:

    Hi Manish,
    I am 23 years old…I am new to investment world…I want to invest 30000/year on LIC Jiban Saral policy for 15 years term…from your article I came to know that it’s better to invest in mutual fund….but as I want risk coverage so initially I want to invest on LIC Jiban saral policy…can you give me a approximate calculation that how much money I will be get after the maturity (including IRR)…and I am very much interested to invest in mutual fund…can you please suggest me any site or book from where I can get some knowledge .Please give me some advice if you find time.Thanks in advanced for your advice.
    Regards,
    Abhijit

    1. Why dont you take a term plan seperately then and cover your self , and invest the rest of the money into mutual fund

  183. Abhijit Dey says:

    Hi Manish ,
    I am 23 years old…I am new to investment world…I want to invest 30000/year on LIC Jiban Saral policy for 15 years term…from your article I came to know that it’s better to invest in mutual fund….but as I want risk coverage so initially I want to invest on LIC Jiban saral policy…can you give me a approximate calculation that how much money I will be get after the maturity (including IRR)…and I am very much interested to invest in mutual fund…can you please suggest me any site or book from where I can get some knowledge .Please give me some advice if you find time.Thanks in advanced for your advice.

  184. MAGESH says:

    Hi Manish,

    Is FAB applicable for the Jeevan Anand policy? Also, the FAB listed above seems to be stale. The LIC has published the updated list in the LIC website. Can you please clarify me.

    Thanks,
    Magesh S.

    1. Magesh

      I am not sure if JA has it . Some policies give you at the end

  185. MAGESH says:

    Hi Manish,

    Is FAB applicable for the Jeevan Anand policy? Can you please let me know how many years minimum required for the FAB to be applicable for Jeevan Anand?

    Also, the FAB listed above seems to be stale. The LIC has published the updated list in the LIC website. Can you please clarify me.

    One more question, if we apply for loan in Jeevan Anand after some years, how much is the interest rate the charge for the borrowed amount?

    Thanks,
    Magesh S.

  186. Gaurav says:

    Hi Manish,

    Thanks for your valuable advises.

    I need some advise on my current financial situation.

    I am 27 years(1985) old man, earning 6 Lakhs PA, wish to have insurance (till now i have not taken any LIC etc.) I can put 50,000 per year insurance for myself.

    Now I have the following questions:

    where should I put my amount Rs 50,000

    1. Should I take Term Plan of Rs. 11000 per year (HDFC Life while LIC is charging RS 28000 ) for 30 + years of 1 crore ? if yes which insurance company LIC or HDFC Life or else?

    and where should I put my rest 40 K?

    My question to you is if you can suggest me something better. As I`m looking for Life cover(50 lacs at least) and good lump sum amount in next 15-20 years.

    Thanks
    Gaurav

    1. Gaurav

      You should go for online term plan from HDFC or any company you are comfortable with , I would say invest rest through SIP in a equity fund .

  187. Gopi Krishna says:

    Iam paying for two policies.

    1. started in 2007 July – SBI horizon -II – premium 12000 INR / year(6k Paid halfyearly. This is doing very bad as per the Unit NAV statement.

    2. Started in April 2010 Jeevan Anand – 92000INR – yearly one time premuim payment – Term 15 Years. i might get around 15Lakhs on maturity. Paid three terms already 92000 x 3 = 2,76000 INR.

    Taking Jeevan Anand for such a huge premium is my bad decision. but when i enquired many LIC agents they told it is a very good plan and i will be pain in excess of the 15Lakhs at the maturity.

    3. Also i invested in Sundaram Tax saver in may 2010 which locked for three years.
    is it a good option to conitue after locking period?

    1. Once the lock in period is over,you need to then find out if it makes sense to continue or not . we cant comment at this moment on that

  188. Vibhor Gupta says:

    i took a policy jeevan saral for long term investmnt , bt later i got to knw that this policy is only beneficial in case of death only. i am 21 , premium yearly- rs.60000 and the term is 30 years. and already paid 3 installments. please help me out what is best form now.. what shall i do for my investments and not for death 🙁

    1. No its not true .. you will also get the sum assured, if you do not die !

      1. Vibhor Gupta says:

        But Sir, before buying the policy my agent and the clerk in local LIC office, they promised about a return of above 1Cr. is dat true? could u plz tell an approx amout how mch i get at maturity.. i really dont hav any idea . help me to sort it out plz.

        1. If it was not written ! , it was never made !

  189. Rajeev says:

    Hi Manish,

    I have taken 3Lac each LIC money back policy of 25 years. First policy i have taken in the year of 2005 and till the year 2010 i have taken total 5 policies [each year i have taken 1]. Currently i am paying a premium of 15000 each. Since it is money back policy, starting from 2010 every year i am getting Rs.45000 back since one another policy completes 5 year block. Do you fell i need to surrender these policies and instead i need to put this in stock market? My age is 29.

    regards,
    Rajeev

    1. Rajeev

      We dont say that close it put money in stock market . But this policy is not going to give you enough returns at the end . I would say if some policy is going to give you money back in next 1 yr, continue it and take the money and close , or just close it all together . What to do with the money recieved is dependent on many things like your risk appetite , your understanding about markets and mutual funds .

      1. Rajeev says:

        OK Thank you. Can you tell me where i can start learning some information about money management in markets and mutual funda? if you could provide some links that would be very helpful.

        Thanks a lot.

        Rajeev

        1. Rajeev

          Just check all the articles written here https://www.jagoinvestor.com/archives . you can choose to read what you require

  190. Pushkar says:

    I had purchased a HDFC LIFE Sampoorna Samroodhi Plan in December 2011 with a yearly premium of Rs : 25000 and SA: 135000. for term of seven years.

    SO should I continue with this policy or , just consider those 25 k as lost.

    If the policy will provide me good returns , then I have no problem in paying 25k, but I have seen that 5% is max returns and ,

    this policy has 3% assured returns, so in worst case , at end of 7 years, I will not even recovere my paid premiums.

    So please suggest ASAP.

    1. Dont you think its such a unsuitable policy for you . Why do you want to get such a small return when banks can give you 9-10% on FD ?

  191. Dhanesh Kaattoopaadath says:

    Hi,
    I myself have two LIC Jeevan anand policies
    1.Sum assured-2,00,000- 1o years
    Premium paid Quarterly-6065
    Commencement of policy-07/07/2008
    Premium paid till-03/2012

    2.Sum assured-1,00,000- 20 years
    Premium paid quarterly-1401
    Commencement of policy-4/12/2006
    Premium paid till-04/2012

    I had an accident last year and Currently am unemployed.The premiums are in due and needs to be paid soon.I don’t want to continue the policy.Shall I make it a paid up policy or should I surrender the policy.I am not in an urgent need of money.Would like to have a long term deposit.So is it advisable to wait and get the paid up amount after the policy period?

    Dhanesh K A

    1. BEtter make it paid up in that case .

  192. ladiesman770 says:

    I need to buy a policy, I am looking for good return after 5-7 years, Which one should I get??? I mean should I get Jeevan Anand OR Jeevan Saral ??
    Guide me here please.

    1. None ! .. whats your requirement exactly !

  193. aarif says:

    hi Manish ,

    thanks for this nice article..

    i have Jeevan Saral two policy of 52,000 and 48,000.

    could you please tell me the Maturity amount i will recieved after 20 years.

    Regards,
    aarif mohammad

    1. Should be approx 15-20 lacs from each policy !

  194. subhash chandel says:

    hi Manish,

    i am holding a LIC money back policy with normal paying premium
    sum assured -500000
    annual installment-31292
    term-20years
    I am very much confused about the total amount that i will get at the maturity of the policy including my mid Money Back installment (as stated by agent 100000 lakh, 3 times)
    kindly help me in this that i can make my mind for the future investment in LIC.

    regards
    Subhash Chandel

  195. RAPOLU JAGAN MOHAN RAO says:

    I have taken Jeevan Anurag T.No:168. Paid single one time premium on 30th May,2009. If i surrender, how much do i get ?.
    Is this better option to surrender it ?. Please reply Manish.

    1. RAPOLU JAGAN MOHAN RAO says:

      Premium paid on 30th May, 2009 is Rs:32,000/-

    2. You will loose a lot of money , what is agent telling you about surrender option !

  196. Deepak Kumar says:

    I am planing to buy LIC policy for my brother. which one is better Jeevan anand or jeevan saral. I have already investing in PPF.

    1. I wont recommend any of those !

    2. Deepak Bawa says:

      lic jeevan Anand because lifetime risk cover after maturity.

  197. jagadish maruthi says:

    hi manish ,awesome article
    I’am having policy of lic jeevan saral and i’am paying primium of 36000/- per annum ,completed 4yrs,shall i continue or shal i drop .I’am planning to start trading of commodities can u guide whice company is better plz

    1. YOu can surrender the policy in 5th year

  198. Aditya says:

    Hi Manish,
    I am 36 years of age, my is wife 32 years and we have 2 year old kid, and look after our parents, both me and my wife are working. I want to take an insurance policy to secure my family future (not looking for any returns). Would it be possible for you to suggest some insurance plans, am of the idea to take two policies one from LIC purely based on its settlement ratio, and other from a pvt insurance company, can you suggest some for us? Many Thanks

    1. Go for LIC + Aviva or Kotak in that case

  199. Bimal Das says:

    Dear Manish,
    I have paid 3 yearly premium for Aviva Young Scholar @ Rs. 30,000/ which I no more want to continue. Please suggest how to progress with minimum loss.

    Regards,

    Bimal

    1. I think the only thing you can do is surrender it nw !

  200. Ganesh says:

    Dear Mr. Chauhan
    Thanks for the enlightenment. I have few queries. Please help. I have taken the following policies as per the details given below;
    01. Jeevan Surabhi – Policy term 15 years, payment term 12 yrs, started in Jan-2001, fully paid now. Rs.10,670/annum
    02. Asha Deep II – Policy term 15 yrs, payment term 15 yrs, started in Feb-2002, Rs.6,850/annum
    3. Jeevan Anuraag – Policy term 15 yrs, payment term 15 yrs, started in Dec-2004 Rs.9,089/annum
    Do you suggest that i hold these policies or close it as of now. I am 37 years old now & am into business with very less tax liability which i think can be easily managed with my PPF account. Looking forward to hear from you soon. Thanks in advance

    1. 1. U have already paid all the money ,there is no analysis needed here

      2. Make it paid up

      3. same here

      Better make them as paid up policies now .

      1. Ganesh says:

        Hi Manish
        So, you suggest that i can surrender all the 3 policies mentioned above & it will minimise the loss. Am i right?

  201. sumesh says:

    Dear Manish I need ur help
    I have enrolled for a jeevan anand with the following details

    Plan : Jeevan Anand (T No 149)
    Policy Term : 77 (Premiuim payment term 10)
    Commencement Date: 23/09/2010]
    Sum Assured : 1000000 after 10 years
    Premiuim : 29450 payable Quarterly

    I have paid all premium till date. After reading ur article, i feel like im wasting my all money. Can u please tell me what to do now
    Also please tell me when i will get bonus if i continue and approximatley how much?
    Thanks
    Sumesh

    1. As its just 2 yrs, you are in tough state . You will not get much money if you just surrender it right now .

  202. Ranjit Singh Shekhawat says:

    I took a LIC policy named Jeevan Surbhi of SA of 4 Lacs in Feb,2009. Total premium pay upto Feb,2013 will be Rs. 122592/- using premium of Rs 15324/- every six month.
    Total premium pay term is 18 Years. In year 2013 I’l get 20% of SA (4Lacs) = Rs. 80k. ( according to Table # 108).
    Should I surrender this policy after getting this Rs. 80,000 amount or before.
    What will be the surrender value in both cases.

    Pl Help ..

    1. Yes, that seems to be a good option . Just surrender after getting that money

  203. Sreedhar Janarthanan says:

    “INSURENCE ” is not INVESTMENT.

    If you want Insurence take a TERM INSURENCE policy.
    (For Ex: There are policys which give 50 lacks life cover by paying a premium of 10000/year,but you wont get any money in return at the end of the policy.
    so if your plan is for 20 years you would have spend 200000 Rs on premium to safe guard your family.

    In worst case if the policy holder expires in 5 years then his family get the life cover.)

    If you wish investment go for Real estate,Shares ,Mutual funds (SIP),Gold ETF and safe investments like Fixed deposits,PPF,RD,NSC,SCSS.

    1. Thanks for your sharing !

  204. Deena says:

    I have Jeevan Tarang policy for which I have paid premiums for 4 years. Is it good idea to make it paid up[stop paying premiums] or should I pay one more year and then make it paid-up.

    1. You can make it paid up now

  205. Pradeep Singh Rawat says:

    Dear Manish Ji, Today, I read your article which is very very informative. A big thanks to you.
    I would be grateful if you could spare couple of minutes to answer my query.

    Presently I am saving 40,000/year in PPF and planning to buy term plan for insurance. Does LIC have a better plan where I could get more returns compared to PPF in the same duration and which also provides good insurance cover?

    Please reply back.. would be indebted.

    Best Regards

    1. No , I dont think any policy will give you more than PPF right now . Better go with PPF only

  206. Ramesh says:

    Hi Manish,
    First of all, I would like to tell that you’re doing a great (free!) service here in this forum to public. Appreciate your effort!

    One query: So far, I have paid 4 yearly installements of Rs.25000.00 towards Jeevan Mitra (Triple Cover Endowment Plan) of 20 yrs tenure. I am thinking to surrender and then invest in MF or invest thru SIP (btw, I am 38 yrs old). I guess that I would get only Rs.25,000 if I surrender. What you may advice me? Should I Surrender or paid-up?

    Regards,
    Ramesh

    1. Why not make it a paid up plan now .

      1. Ravi Nagar says:

        Manish,

        First let me tell you, your articles on this website is really helping me a lot to understand the world of investment and insurance. In fact after going to through jagoinvestor.com I have decided to discontinue my Jeevan Saral policy.
        I have certain doubts regarding that. I took the policy in 2010 for Rs 24000 annual premium(Got 40% of first premium back from agent). paid Rs 24000 in 2011 and Jan 2012. Total 62400 paid. What I understand from your forums is that I have following options now:

        1. Forget about the premium paid and move ahead.

        2. I suppose after paying 3 premiums I can surrender the policy. In that case I will get Rs 14400 back (30% of 2 years premium).

        3. Special surrender value: I don’t understand this and not able to calculate how much will I get in such case and whether it will be applied in my case.

        4. Keep on paying premium that I really don’t want to.

        5. Paid up: If I stop paying premium now, will it be eligible for being paid up policy. What will happen to my money then? Will it keep on reducing or atleast I can get the premium paid for lets say after 10 years? Will insurance cover will remain intact?

        Please help me find answers. Thanks

        1. Ravi

          With Jeevan Saral , seems like you can get a big amount back if you surrender in 4th and 5th year . So better surrender in 5th year

  207. vivek says:

    Dear manish,
    I would like to appreciate the article by you. Its quite educative and tells about issyes which no lic office , agent talks about. But it has put me to doubt about two plans which i hold ,Jeewan Anand and Jeewan Chaya, have paid two premiums and paying upto Rs 57000 per annum in total. Kindly advice should I close and go in for PPF, would PPF give a batter return?

    1. You are in tough situation right now , yes generally we suggest to get out of LIC if you are in initial years and use the future premiums in something better.

  208. Nitesh says:

    I have gone through all the comments on this article. I was planning to take some Financial decision for my future through insurance or PPF and a term insurance, so that i can secure my family.
    But going through you article, it’s clear that Insurance companies fetch less returns also in long term than the PPF and FD”s. Ok i want to go for term insurance instead of Money back policies. In this case my future is secure with some lumpsum amount in long term if i invest enough every year.
    For Term policy to secure my family if, incase something happens to me.
    I have only one doubt. Can i rely on term policy, as they are assuring for big amount if some thing happens to me unfortunetly, by taking some amount every year.
    Will they pay this amount to my family or will they try to avoid the claim.
    if the claim is denied then my purpose will be waste.
    All companies have different premium for term insurance and LIC as the highest premium.
    Which company i can rely for term insurance.
    Please give be the best few on which i can trust for next 30 years and my family will not have any problem in claming the insurance. LIC i trust, but still need few more and can i trust on term insurance is the big question here?????

    Please suggest me for term insurance. other investment i will take care of, as i am fine with 7%-10% profit on my investment. So will go ahead with ppf or fd or may be insurance too for tax saving.

    Waiting for suggestions on term insurance and can i rely on this with any insurance company.

    1. All insurance company will pay the claim if you were genuine in providing your information and have paid all the premiums

  209. Vasudev Tadepalli says:

    Dear Manish, I have a money back policy for 50000 and have been paid back twice, amount being 10000 each time. The vested bonus I gathered is 48500. Since I am paid back will that amount be deducted from my maturity amount?

    1. Mostly yes , look at the policy details on LIC website . generally its 20% , 20% , 20% and 40% payment

  210. Shiv Kumar says:

    Hi Manish,

    I really feel very Bad-the way you are misguiding the Peoples and making them Anti LIC.
    Do you really know the meaning of LIC and Power of LIC and what social Work LIC do for this society and what benefits LIC is giving to there customers.

    If you go for Life insurance-LIC is the only Insurance company you can trust in India and no one else-hope you dont have daring to oppose this.

    Guys If you realy want to know the benifits of LIC-its better to meet someone who can give you Geniuine and expert advise.

    90% of the people who invest in LIC are from middle class-they cannot take the risk of investing in Share-Market/Mutual funds also they want Security for there family the one and only option is LIC.

    LIC helps people when even a doctor cannot save the life of someone and Just Says simple words ‘I AM SORRY’ and walks away-its LIC who pays the Heavy amount to the survivers,dont want to say Much….But my dear freinds-you all belongs to Middle-class-dont risk your money and invest in LIC-where your money is Safe.

    1. Can you explain

      1. What is the average life insurance of LIC policy holders and is it enough for their family ?

      2. What is the return of the investment on LIC , is it enough to combat inflation ?

      3. What was wrong in the article ? Which you think is misguiding ?

      Manish

  211. Arunima says:

    Now a days you may even mail to your lic servicing branch for knowing the surrender value of all your policies.

  212. avinash says:

    hi manish ,
    You are doing good(great) job….I would like to share my experience with you.
    My father does not believe in lic or any money back policies and he does not have any either.And mind you he is 75 yrs now,got retired at the age of 50.He has fulfilled all his duties (financial) for his family .He started investing in stock market way back in 1985 instead of taking lic policy ,which at that time was considered amust(lic).Now he is financialy free and thankfully he has given us better future to look after.The point is why give your hard earned money to somone who will use your money & get rich & in return promise a paltry amt in distant future which whoknows will only be used to pay your maids salary

    once again thank you & keep the good job

    1. thats an amazing thing to read.. Your dad went beyond conventional rules and did what he felt was right .. hats off

  213. Vimal Mathews says:

    Dear Manish,
    I have 1 policy plan 162 – 15, sum assured 5lakh, payable quarterly for 6 years and the commencement date was 4th July 2007. Please tell me the pros and cons of this since i am planning to take a similar one again.
    thanking you
    Vimal Mathews

    1. Better make it a paid up plan .

  214. Subhas says:

    Hello sir
    I have taken lic’s jeevan anand policy of 500000 sum assured on 2/2/2012 for 25 years. My present age is 36. Could u plz tell me the final maturity value for my money giving me the details about bonus and FAB.
    Thnks

    1. The bonus and FAB are future numbers, you can just take a guess of around 40-50 per year .

  215. Mustafa Ahmed says:

    Dear Manish,
    Can you please tell me in which policy to invest… After reading all your suggestions from the last 15 days I am now totally confused… My plan is to buy a surabhi plan, one endowment plan, one child plan and one pension plan. I can doll out INR 125,000 per annum. Plz suggest bcoz I have seen u suggesting not to invest in money back plans due to its high premium. Also if I buy all policies online how much I save in premiums.Thanks

    1. Its not about offline and online , its about Equity and Debt option . Moneyback and endowment plans will give you below inflation returns, do you want that ?

      Or you do want to invest for your long term goals in the best way . I suggest you grab my book from flipkart first – http://bit.ly/jago-book

  216. HT says:

    Hi Manish,

    I am willing to buy a policy for my wife (Age 27 years, premium will be paid by me as she is housewife). I can invest upto 25-30 k per year and i want a life insurance policy which have good return value. Could you please suggest me the our guide me for better policy.

    1. Is it for insurance or investments ?

  217. k.srinivas says:

    your article is simply superb and it reveals that you are master in LIC issues. my LIC policy JEVANMITRA (20 years sum assured 50,000) is near maturity and the loan which i had taken is still due. what can i do? can i repay the loan amount by taking another loan by some where else? or simply forget the LIC loan and wait for the maturity of policy. which is the best way. would you guide me? i am eagerly waiting for your suggesition.

    1. I think if you do not repay your LIC loan , then it will be deducted out of maturity and rest will be paid to you

  218. RAVI PRAKASH BHAR DWAJ says:

    i m ravi prakash I have almost finished reading your book. It is a wonderful wonderful book. The ideas are so easily explained with simple mathematics and logic. I think it is a must read for everyone. I totally recommend this book to everyone, and have already influenced 2 new buyers in my circle.

  219. Vivek K M says:

    Hi Manish,
    Can you plz advise:
    Planning to take LIC Jeevan Saral for 30 years with 120000INR premium yearly. In case if I want to withdraw money after 10 years, will I get all the benefits, and in case if I withdraw after 15 years will I get FAB also.
    Also appreciate if you can tell how much will I get after 10 years and how much will be the bonus per year 🙂
    Thanks
    Vivek K M

    1. The bonus cant be predicted like that, but you can see today’s numbers . I suggest you read these threads before applying . https://www.jagoinvestor.com/forum/?s=Jeevan+Saral

  220. Mukesh says:

    mr. manish u r certainly misguiding and trying to fool each and every person. i dont know your motto and the exact reason behind the same.
    for your kind information and to others if anyone has any issues regarding the lic policies and its payment of business. kindly go to the web page http://www.licindia.in/bonus_info.htm#5
    and can see the entire bonus and final additional bonus declared by the LIC.
    for endowment policy like plan 14 and 149 are the best insurance plan.
    either manish has some vested interest or has little knowledge about the bonus and final additional bonus paid by the LIC that’s why he has mislead and misguided.
    eg. for the plan 14 having sum assured 10 lacs term 30 years then lic will pay around 35 lac rupees.
    if anyone has any confusion then he can calculate the same through the above stated link.

    1. Mukesh

      Can you share with us how you reached that number 35 lacs ? Also what is the IRR in this policy ? How do you get maturity amount if you do not have future bonus values ?

      1. Mukesh says:

        hi manish,
        here is the calculation
        suppose a policy holder has taken plan no. 14, having sum assured 10 lacs, for 30 years.
        according to the LIC the interim bonus and final additional bonus is declared each year and so i am calculating on the value of the last year

        interim bonus 48 for each 1000 each year, then
        for s.a. 10 lacs 30 years = 48*1000*30= 1440000.00
        final additional bonus for 30 years is 1100 per thousand
        so total final additional bonus (FAB) = 1100*1000=1100000

        total amount payable on 30th year = S.A. + Interim bonus + FAB
        = 1000000+1440000+1100000
        =3540000 rupees

        1. Deepak Jain says:

          Hi Manish,

          I Appreciate myself in going thru all the comments of my friends, found your responses for almost all and I appreciate you for that.

          Can you please let us know whether the calculation given above by Mukesh is the way which LIC applies??

          Waiting for your reply on Mukesh comment with a better clarification.

          Regards,
          Deepak Jain

          1. No I dont think that teh way its calculated . FAB is just once at the end and that also is only for few policies .

  221. Gajjan says:

    Hi Manish,
    LIC has declared loyalti addition for jeevan Saral as 250 Rs , can you help to get %of return ,I am not sure for how many years this amount is.

    Thanks & Regards

    1. Its just a one time addition in the start and might be for the policies which are maturing in current year

  222. K Prashant says:

    Hi Manish,

    I have been investing in two(2) LIC Policies since last 4 yrs which are :
    Jana Raksha having premium 59000/Yr
    Jeevan Saral having premium 24000/yr

    Now , as I am learning about other investment opportunities, I am not sure whether i should continue with them or not . please Suggest.

    Prashant

    1. We dont recommend continuing .. Better make it paid up or surrender them

      1. ashok says:

        your are misgiding

        1. Ohh .. we are sorry for that .. can you please guide him in that case, can you suggest him what is a better alternative and why ? Can you please also put the facts and number to support your argument .

          We would love to learn from you Ashok .

  223. Faiz Ahmed says:

    Hii Manish Ji..

    I have taken a Money back policy of 10,00,000 on Dec 2011 for 20 yrs period with a return of 20% on every 5 years i.e. for 5th, 10th and 15th year.
    Currently I am 27 years old, and I thought that insuring my life and some returns on every 5 years will give a boost to my life.
    But there is always a question whether I am paying more to get this benefit.
    I am paying of RS 5405 as an premium per month.
    So at the end of policy on 20th year LIC will give 40% of assured amount with bonus.
    Can you please tell me what will be the final amount which I will receive by the end of the policy.

    1. This whole thing translates into how much of yearly return ? I dont think its crossing inflation ! .. Thats how money back policies work , better dont continue this.

  224. diptanjan says:

    Hi Manish,

    I have a Jivan Anand Policy (Started Jan 2011). I am paying a premium of Rs. 6302/- month.

    In my policy the Policy term says the following : 65 (premium payment term 16).
    Sum Assured is 10,00,000.00/-

    While taking the policy my agent mentioned I will receive the Sum assured + Bonus on 17th year of this policy (Year 2028).

    I have asked my agent why term is showing as 65, and he mentioned my life is insured 65 years from the day of taking the insurance (I took it when I was at age 35) so this policy will be affective till my 100 yrs of age.

    Do you have any idea when (which year) I can get this Sum Assured+Bonus.

    Regards
    Diptanjan

    1. Did you see the policy document , what does it say ?

  225. Santhosh says:

    Hi Manish,

    I read your article…I just got Jeevan Anand for 10 lakh coverage and paying a hefty premium…..I didnt analyse much when i bought the policy….Now let me know what would be the best option……Surrender after 3 years or let it paid up……I am thinking of using the money to get Term Insurance + PPF

    1. Just stop the premium payment right now .

      1. Santhosh says:

        Stop in the sense…..let it get paid up?

  226. Vishesh Girdhar says:

    Hi Manish,

    I am 29 years old and i have bought Jeevan Anand policy for 25years.
    i am paying a premium of around Rs. 24000/annum. i have paid 4 premiums.

    Should i withdraw from the policy and invest in a plan which gives better returns according to you or should i hold onto the existing policy.

    Thanks

    1. I would recommend getting out of it and investing in mutual funds

      1. Vishesh Girdhar says:

        Which mutual fund would you suggest? How do i decide which fund will give better returns as compared to the other? Where should i buy mutual funds from?

        1. What is your goal and risk appetite ?

  227. Dj says:

    Dear Manish,
    I was searching the net regarding the info and I came across your web-site. A very nice write up you have provided for all the users. I am however a little confused mainly because I don’t have any idea regarding the insurance policies, I am looking for a health cover for my self and for my parents the age of both the parents have crossed 60+ yrs. and also they both have High BP & Sugar. Which I don’t think is covered ( What I came across ) Kindly do let me know what policy should I take my income is 1.8 Lac. PA.
    Thanks.

    1. You can look at some options like Oriental Family Floater and Max Bupa policies.

      1. Dj says:

        Thanks for your advice. I will look into it and revert you back in case I have any more questions.
        Thanks again and all the best at what you are doing. Getting people educated about insurance is in my mind one of the toughest thing to do in India.

      2. Dj says:

        Dear Manish,

        I went on to inquire about the policies as told by you Family floater plan and in between I was approached by LIC’s agent. He told me about Jeevan Arogya plan. Will that be sufficient for the cover the medical treatments or should I go to another policy?

        Thanks.

        1. No , its not the best thing you can buy , better go for standard plans .

          1. Dj says:

            Thanks for your reply. What exactly you meant with standard plans? Kindly explain as I clearly don’t have an idea about it.

            Thanks.

            1. I was talking about mutual funds . Dont go for “policies”

            2. Dj says:

              Thanks a lot for your advice.. I will be taking the info regarding MF’s. May be I should enroll myself into your site cause I might make a hasty decision as I don’t have any much idea.
              Thanks again!!

            3. Yes, first learn about things

  228. javed says:

    Hi, Manish
    I’m 25 years old i want to Know Start some Money back policy which Policy annual Primium 12000/- So Pls Suggest policy name & with compelite Datial Bigning to maturity period ????

    Thanks & Regard
    Javed

    1. What is your risk appetite ?

  229. Kunal Sanwal says:

    Dear Manish read your article about keeping investments and insurance separately
    i do understand the mathematics and the logic behind the concept but in my view Insurance as a subject is too individually need based to suggest the same solution for each and every case as far as my experience which is a healthy 8 yrs goes each and every customer has to be individually passed through a process of need analysis and only therafter any product should be suggested the fact is that insurance is not an investment but more of a complete solution

    1. Kunal

      Not sure on that. Can you give an example where INsurance has to be seen as complete solution ? In my opinion , Life Insurance policy is a life insurance policy and should be seen as that only . Can you give me some scenario

  230. rashid says:

    respected sir
    i want to know regarding HDFC SL CREST investment plan for 5 years in which i need to buy at nav of rs.10 and which gives a gurantee that maturity of your contract will be higher of rs.15 or highest nav recorded during the last 7 years.since i dont know much regardind this please guide sir or should i opt for FD
    regards

  231. kawal says:

    Hi Manish what Maheshwar jha is saying is half truth also. For policy like jeevan shree(original , not JS1 or JS 2 ) which was hihest sold policy of LIC till date has a Guaranted bonus of Rs.75 it was later that it got reduced in its subsequent avatar. In india why at present the terms plans are not popular one of the reason is people don’t digest the idea that after paying premiums they don’t get anything if they survive policy term no ody wishes to be told that you get money when you die. overall your site is quite educative keep it up. kawal

    1. Ok , for that one policy, I agree its a great one , But what about majority of plans ? Also I am not able to understand which part of the article is not right . I am open to correct that ? Regarding term policy thing , read this – https://www.jagoinvestor.com/2009/08/why-people-dont-like-term-insurance-and.html

  232. PRADEEP says:

    Dear Hemant ,
    Myself taken HDFClife jeevan samruddhi plan .Presently I am paying Rs.2062 pm. which takes total of about 25000 per year. Initially they told me that I would get187000. But later I found that I am not even getting my principal amount after maturity . I paid premium for 5 months. Please tell me that should I continue or not?

    Regards
    A.Pradeep

    1. Why do you think oyu will not get your principle after maturity ?

      1. pradeep says:

        DEAR MANISH
        HDFC LIFE PERSONNEL TOLD ME THAT I WILL BE GETTING 3-10% ON SUM ASSURED. THAT IS IF CONSIDERING 5% ON SUM ASSURED RS 85500 EVERY YEAR AFTER 5 YEARS WILL BE AROUND 21000 AND INTERIM BONUS OF 10% IN LAST YEAR WILL BE 8500 . TOTAL WILL BE 123000/ AFTER 5 YEARS. THAT WHAT I CALCULATED. AM I CORRECT. . PLEASE ADVICE ME.
        REGARDS
        A.PRADEEP

          1. pradeep says:

            Dear Manish
            I calculated IRR based on your format it is coming 14%. . I will be paying 24744 per year for 5 years and i was told that i will be getting 187000 after 5 years. So IRR comes to 14% . Please give me your advice. Whether i should continue or not?
            Regards
            A.Pradeep

          2. pradeep says:

            Dear Manish
            Based on your calculater If iam investing 24744 per year for 5 years. After 5 years based on their claim i will be getting 187000.
            SO IRR stands at 14%. So guide me whether i should continue or not. How can i recover my amount of 5 months?
            Regards
            A.Pradeep

  233. pradeep says:

    Hai Manish
    I am Pradeep fromGULBARGA . I presently took HDFC LIFE JEEVAN SAMRUDDHI PLAN . Monthly premium is Rs.2062 which accounts Rs 25000 annually. I took it for 5 years . Agents told me that after 5 years I will be getting Rs.187000 but later I found that it was wrong ,I suspect that even I cannot get my principal amount which is equal to 125000 approx. Please tell me that whether i should continue or not. I paid premium for 5 months?

    1. Why do you think you will get 1,25,000 ?

      1. pradeep says:

        Based on your calculater If iam investing 24744 per year for 5 years. After 5 years based on their claim i will be getting 187000.
        SO IRR stands at 14%. So guide me whether i should continue or not. How can i recover my amount of 5 months?
        Regards
        A.Pradeep

        1. But did you check if their claim 187000 is right or not , Is it promised in writing ? Agents use any number to pursude people to buy !

          1. pradeep says:

            How can i check . They did not gave me in writing.

            Regards
            Pradeep

            1. Then you cant prove it actually .. Its as good as it never happened !

            2. pradeep says:

              should i surrender policy ? how can i recover my amount

            3. pradeep says:

              should i surrender policy? how can i recover my amount

            4. pradeep says:

              should i surrender policy? how can i recover my amount

              Regards
              Pradeep

            5. You can not recover the amount like this, if you surrender , the policy terms and conditions will apply

  234. Ravi says:

    Hi Manish,
    I have wealth plus policy started in May 2010 and as per policy only you have to pay 3 premiums annualy and i have paid 3 premiums annualy which is 60,000 but now i got a letter from LIC saying that next premium due date is May 2013, but as per policy its only 3 years premium so why i got that letter and i will not pay next premium, so should i surrender the policy or no need to pay premiums and wait till maturity date i.e 2018 and if i wll wait till maturity date then should i get Sum Assured+Bonus.. plz suggest

    Thanks

    1. WHere is it written that there are only 3 premiums in the policy, can you look at the policy document ?

      1. Ravi says:

        my agent told me that and now i have checked the documents and its not saying pay only 3 premiums, now i want to close it, can u tell me how much money i will get.. and if i will make it paidup then how much money i will get ?

        1. It can be defined by the policy only , talk to customer care !

  235. pradeep says:

    Hai Manish
    I took HDFC LIFE JEEVAN SAMRUDDHI PLAN . I have to pay 2062/ monthly premium for 5 years so after 5 years it will be around 125000. Initially I was told that I will get around 187000/ after 5 years but later I found that I would not get even my principal amount. Please tell me whether i should opt out of this policy , I paid 5 premiums.
    Regards
    A.Pradeep

    1. Better get out of it !

  236. Dinesh says:

    Hi Manish,

    I am 22 years old salaried employee.Planning to open Money back policy f0r 20 years with a annual premium of 50000..How much i will get back after 20 years?is it worth taking this policy?

    1. Its not worth taking , It would give you below inflation return !

  237. Raj says:

    Hi Manish
    very good article. I have 1 question about the agent commissions. I have couple of policies and not getting any service from the LIC agent. do they get any commission from my yearly premium payment ? if yes, I would like to complain it to LIC mgmt or officer.

    1. Yes they get 5% of premium . But they are not liable for any service anyways .. What will you complain ?

      What service are you talking about ?

      Manish

  238. Bhavesh says:

    Hi Manish,

    Will help if you can share similar arithmatic for LIC Pension Plan and what benefits it give, in case any? Also, options in case Pension Plan is not carrying any meaning after the benefit got clubbed under one tax saving bracket….

    Thanks in advance!

    Cheers

  239. pallavi sharma says:

    presently my salary is 14k/m
    2 child 4 & 5 yrs
    how much I should
    invest /m & where for
    1. Child Education
    2. marriage
    3. My pension
    thanks

  240. pradeep says:

    Hi Manish

    Great info. I had a jeevan shree-112 policy from 2002. I don’t find any information about this policy or its returns on LIC website. I lost the contact of the agent from whom I have taken this policy.

    1. Pradeep says:

      Some how figured out the returns on maturity. Posting my findings, so that the people invested in this PARTICULAR policy wont get disappointed.
      This is the old jeevan shree (table no. 112-16-25)
      premium paying 24,000 pa
      sum assured 5,00,000
      premium paying term 16Yrs, maturity at 25yrs
      total returns on maturity
      sum assured =5,00,000
      guaranteed additions @ Rs 75 per 1000 sum assured pa = 75*500*25=937500
      loyalty additions @Rs 105 per 1000 sum assured = 52,500
      total = 14,90,000
      ———————————————
      You can compare it with traditional investment @8%pa
      For 16Yrs it is RD at 8% and rest 9Yrs FD at 8%(compounded)
      RD returns
      775654-39000(10% tax on interest component)=736654
      FD returns on 736654
      15,02,355-76000(10% tax on interest component)=14,26,355

    2. Pradeep

      There has been tons of discussion on these plans at our forum – https://www.jagoinvestor.com/forum/?s=Jeevan+Shree , Look at them

  241. Sanghmitra says:

    Hi Manish !

    Let me know tell you a recent incident. One of my relative aged 24 yrs was suggested by his father’s ‘friend cum LIC agent’ to take LIC policy. The guy came with 3-4 quotations with no plan name mention…just some magic calculator stuff….I was being asked to look into them and finalise for my relative…As i was aware of plan structure, those sheets more confused me as to what he is trying to sell…
    Anyways i wasn’t able to explain my relative in simple terms that why not to go for it…
    Since they trust LIC and the friend..and wanted something for Tax purpose…relative took Jeevan Saral ( which i mentioned agent to give to him) with 2 policies of 18 k yearly each…
    I still feel uncomfortable (or confused ) as if could have managed to avoid this transaction 🙁

    Regards
    Sanghmitra

    1. Hmm.. you could have asked for things like

      1. What will he get back if due to some emergency he needs to surrender it in next 2-5 yrs, please show us LIC wordings on that.

      2. What is the real return of the policy above inflation ?

      Manish

  242. Sid says:

    And now please tell me, where do i invest this 36000 per annum? That is 3000 per month? I have 3 SIP’s.
    1) Tata Retirement Fund: 2000/month.
    2) SBI tax saver fund: 2000/month.
    3) Reliance equity opportunity fund: 2000/month.

    Are these okay, performance wise?
    And which do you suggest i take now???

    Awaiting your response.

    1. What is the final equity allocation of your portfolio , if its 80%+ , then its fine .

  243. chandan says:

    Dear Manish!
    Just have read your article about LIC policy ..You may call it coincidence but i am glad that i have read your article and can guide someone for the same….Manish even i look in to the JEVAN SARAL plan of one of my neighbour i was all shoked after doing some sort of simple mathematics over his policy…see he started his policy 3 months back with 1531 quarterly with DAB..AS policy says he will get 106452 INR as maturity AMOUNT,this figure is an eye opener for me.. even if he saves his money in any saving account which give him 8% interest rate he will get even much better than this as i calculate 500*120 (months) amount which he will save doing nothing is 60000 …after giving away 60,000 currency to lic and as LIC promises with 10% which i dont think so..he will accumulate only 40,000 rs only after 10 years… I SAY BIG NO TO THIS POLICY…. your take?

    1. Yes .. agree with you !

  244. rashid says:

    im buying lic jeevan anand policy for a premium of 1lakh rupees per year for a period of 25 year how much return will i get please guide

    1. You will get around 40-45 lacs back

  245. rashid says:

    respected manish sir
    im thinking or buying lic jeevand anand policy for a premium of rs.1lakh per year for a perio of 25 years how much return i will get approximately please guide.Also should i opt for fd rather than lic

    1. chandan says:

      Manish says 40 to 45 lakhs….which is correctly said…. But rashid when you say 1 LAKH consistent in a raw for 25 years… ask yourself can you for 25 BIG YEARS?one thing i cant understand even after reading this article you still planning to go for it?… why dont you make yourself a good protfolio where this 1 lakh of your money diversified between different instruments,,(I:E recurring,ppf,good mutual fund schemes etc..) rest on you…

  246. Sri says:

    Hi,

    I am using Bima gold (Money Back Policy). I discontinued in the middle for the total tenure. Now i want to continue can i do this.what is th eprocedure please let me know in detail.Now my age is 29 years.i started this policy in 2006 .

    With regards,

    sri.

    1. You can revive the policy, but only in next few years of closing it . how much time has passed since you closed it ?

  247. Sid says:

    Hi Manish,

    Can you please reply to me as well. I posted a query on 6th September. Thrice actually by mistake.

  248. Atul Agarwal says:

    Dear Manish jee,

    Thanks for this wonderful article. I landed up here with lots of doubts in my mind regarding my LIC policy. I plan to surrender my LIC policy which is a profit plus policy having current NAV :10.78 and No. of units being: 6500.
    Will i be getting the amount as follows if i surrended my policy?
    Amount = NAV * No. of Units
    Amount= 10.78 * 6500 = Rs 70070/-

    I have paid a total of 5 premiums (Yearly 15000 * 5 = 75000)

    I plan to invest this money in SIP after withdraw. I have a risk taking capability and kindly suggest some aggressive SIP for my investments.

    Many Thanks,
    Atul

    1. Yes , you should get the full amount

  249. ganapathy says:

    hello sir
    i’m having one doubt. right now i’m paying lic wealth plus this month all the premium i have to pay going to end(for three years i paid) , so what shall i do that is “if i wait for four year it is possible for me to get good return” or else i shall take the money

    1. I think you dont understand the policy, it might not be a 3 yr policy, better you sell it now

  250. Sid says:

    Hi Manish,
    I have taken LIC Jeevan Surabhi policy with 5 lakhs sum assured for a period of 18 years. According to that, i’ll receive 1 lakh at regular intervals i.e. 20% of sum assured, 5 times. And also i am told that i’ll receive an accrued bonus at the end of 25th year which may be close to 10 lakhs. Please tell me how much money approximately will i receive at the end of 25th year. I have paid just one quarterly premium of 9981/-. Should i continue with the policy or just stop it?
    Please advice.

  251. Inderpreet Kaur says:

    hi manish

    i have a policy LIC Jeeven Anand with sum assured of Rs. 1000000/- and the policy term is 21 years. Can u be able to calculate the final sum assured at the time of maturity that i will be paid by LIC. As i have very less knowledge about these insurance and investment. If i surrender my policy after 5 yrs then what will be the amount i will receive back. I have read ur article abt policy surrender but i specifically want to know about the jeewan anand .

    1. Inderpreet Kaur says:

      its jeewan Saral not jeewan anand

    2. it will be same for Jeevan Anand. Incase you surrender within 5 yrs, the amount you will get will be very less like 50% of your money paid

      1. Inderpreet Kaur says:

        thnxxx a lot Manish,

        But if i need my money thn can i take loan on my amount paid after five years ??? Is there a option of making this Jeewan saral a paid up plan

        1. Yes you can make it a paid option

  252. Saravanan says:

    Hi Manish,

    Great Job by You!
    I have a 25 yrs money Back policy which was started in 2003 for about 5 Lakhs SA.
    Now I paid (38,154 annually) 10 terms. I need to pay 8 more terms and wait for 15 more years to get my returns.
    Is it good to conitnue at this stage ? What is your suggestions on investment point?

    Thanks
    Saravanan

    1. Better make it a paid up plan !

  253. Sharath says:

    Hi,

    I am planning to invest Jeevan Saral based on reveiws and suggestions from LIC agents and few of my friends. I am 36 and planning for 15 years tenure for this policy.

    Can you plese suggest & advise it is good to invest this Jeevan Saral.

    Thanks,
    Sharath

    1. I dont think its a prudent decision. You are asking people who are either biased (agent) or they themselves dont understand it (friends) . Do some maths and find out the returns .

  254. Mayank Jain says:

    Hi Manish Sir, I have taken LIC Jeevan Anand in 2006 and annual premium is ~25,000 while sum assured is 5,00,000. Till date I have paid 6 premiums i.e. 1,50,000 in all and next premium is due today. I don’t want to continue with this policy (please note that I have taken a term-policy last year and I am not in need of money). Please advice what should I do now – surrender, make it paid up or anything else? Thanks in advance!!

    1. Better make it paid up , when you dont make the premium payment, it means it becomes paid up automatically !

  255. jeevan anand insurer says:

    Manish – i am in the tail end of my Jeevan Anand (last year premium is pending). I started a yearly premium paying in 2004 and my last payment insurance for 10 years in May 2013. Insured amount was 10,000,00 with an annual premium of 1,21,029. Roughly how much will i paid after the policy matures… I don’t see any amount or bonus addition on the website online
    Jeevan Anand Insurer

    1. That should be as per the policy document , you should get Bonus + SA

  256. pawan k baidya says:

    Dear Manish,

    Ur articles are really giving deep insight to insurance policies. I was planning to buy Jeevan sathi of LIC for investment as well as life coverage of my & my wife(She has no insurance policy till date). Need to know your specific analysis on that policy, it will be of great help for me.

    Thanks & regards…pawan

    1. We dont suggest any endowment policy , from LIC or any private insurer. You need to take a term plan if you need life cover. Else not

  257. sona says:

    policy commencement date 2.3.09.Whole life limited cover. Premium 11225 payable 1/2 yearly. next due in sept ’12. Cover 5,00,000/-Age now 46 yrs. premium paying period is 20 yrs. All premiums paid till now.

    pl advise should i surrender policy or make it paid up

      1. sona says:

        thanks for your response. Pl note I had made wrong mention of year. Commencement date is 2.3.07 and not 2.3.09 as mentioned. Would your advise still be to surrender or paid up?

        LIC informs that approx surrender value will be about 65000/-.

        thanks and regards

        Sona

        1. In that case , you can make it paid up if you dont need money right now, else if you need, then surrender !

  258. Chethan kumar says:

    Hello Sir,

    I have one doubt regarding LIC policy maturity For Example if i take jeevan anand policy with Sum assured one lakh paying 1388 quarterly for 20 years, wat will be the amount i get after maturity, my agent said its maturity amount=Amount paid+sum assured+accrued bonus+loyalty bonus. is that true……. than as per his projection maturity amount land up somewhere b/w 3.5-4 lakhs please clarify

    1. Yes your agent it true .. but the bonus amount is different for all the years and it will depend on future bonus amounts !

      1. Chethankumar says:

        Thanks Sir for your kind advice

  259. Mohan says:

    Hi Manish,

    I have applied for LIC Amulya Jeevan-1 for 25 lakhs /35 years; for my age of 28, the premium is 8600 per annum. I had gone through required medical tests and every thing is fine. However, i was operated for tonsillectomy 7-8 years back which i mentioned in the application.
    I was told that, i need to pay an extra of 1625Rs/annum for the same (i.e, 20% extra) – to me, it looked like a very high price for some simple thing that is not even considered as an operation (as there are no stitches). Please advise.

    This is my first insurance policy, I wanted to be 100% sure and hence went ahead with LIC; I planned to take a second term policy from a private player with higher sum assured.

    Thanks,
    Mohan

    1. Understand that companies dont look at things they way you are , when you went ahead with some medical operation or some issue ,it means you are unhealtheir than others by some margin . This is how they look at it

      So better go ahead with it , if you still dont want to , go to some private insurer , but you will have to mention this LIC incident there as they ask for any rejections or you rejecting some insurer !

  260. Reena Singh says:

    Manish

    Your Article is good.now help me One Fren (LIC Agent) of my husband suggested
    him plan “Magic Plan Retire & Enjoy”
    how this plan is should we take it or not.
    we already have very Good term plan of other company so do not require sum assured more.
    I am not intersted in this plan i am more intersted to clear my home loan at earliest.
    please suggest?
    I understand Retirement Plan are nothing diffrent from other common insurance plan.
    kindly revert with your valuable comments.

    1. Yes better dont take it , its just a marketting gimmick .. just ask him to show you the comparision with a mutual fund on long term basis , ask him how much is the liquidity of policy, if you want to close after 2 yrs , can you do that ?

  261. Santosh Kumar Sharma says:

    Hi manish,
    I have taken LIC money back return policy of Sum Assured 4 lakhs (20 years plan). Its 6th year now. I have taken one benefit of 80k also last year.Since I am pursuing my executive MBA , so unable to pay premiums now. when i went to close the policy( 5 months before) they gave me loan of 30k . now i am confused what to do??
    I have taken educational loan of 10 lakhs @ 14% also which i will have to pay from next year onwards.
    I have one term insurance policy also for 40 lakhs.( its premium is only 8500)
    kindly suggest me what to do now??
    should I close the policy or continue??
    Waiting for ur reply.

    1. BEtter make it paid up . You will save your self from paying the premiums, if you need money urgently , better surrender it so that you get some money !

      1. Santosh Kumar Sharma says:

        thanks..

  262. Mrinal Basak says:

    http://www.moneyguruindia.com/article.php?cid=3909&id=1

    Dear Manish,

    Jeevan Saral: World’s best innovative life insurance product Mon, 25 Jun 2012 01:55:32 -0600 This traditional endowment policy has become very popular because of exclusive features like – high liquidity, fixed risk cover
    By STAFF REPORTER
    TAGS: LIFE INSURANCE, LIC. JEEVAN SARAL, ANALYSIS
    LIC’s Jeevan Saral is a traditional endowment policy. Due to the apparently simple outline of the policy, it has become quite popular in the recent years. The policy also got accolade of Golden Peacock for best innovative life insurance product among all the insurance companies of the world.

    Some exclusive features like – high liquidity, fixed risk cover up to 250 times of monthly premium irrespective of age are the factors that adds to its popularity. In recent times the suitability of the policy as a saving cum insurance instrument is highly talked about. In this short write -up an effort is made to clear out some conflicting points of this plan.

    The entry age for the policy can be from 12 to 60 years, while the maturity age is 70 years maximum. The term of the policy can be from 10 years to 35 years. The minimum premium can be Rs 250 per month for age up to 49 and Rs 400 per month for age 50 & above. There is no maximum limit.

    Death Benefit: In case of death of the insured during the term the beneficiary will receive 250 times the monthly basic premium ( which is referred to as the death benefit sum assured) plus return of premiums paid (excluding the first year premium and premiums) plus loyalty additions.

    Maturity Benefit: If the policy matures, the policyholder gets maturity sum assured (MSA) plus loyalty additions.

    Partial Surrenders: Partial surrender is allowed any time after the completion of three years, provided premiums have been paid in full. If policyholder opts for it, the basic premium under the policy is reduced and the policyholder gets the surrender value corresponding to the amount by which the basic premium is reduced. For this special option this plan is also named as ATM plan. But note that like ATM, you are not allowed unlimited withdrawal from the policy.

    A minimum waiting period of one year is required between two successive surrenders and reduced basic annual premium after the partial surrenders cannot fall below the stipulated minimum level.

    Auto cover: If a policy under this plan is in force for full benefits for 3 years, the risk cover under the main plan continues for 12 months , even if subsequent premiums are not paid in due time. This cover, however, does not continue under rider benefits.

    Optional benefits: The plan also offers the two optional riders by payment of additional premium. Those are accidental death and disability benefit rider and term assurance benefit rider. The term assurance and accident benefit sums assured under the riders will not exceed the death benefit sum assured under the basic plan. Also, the maximum cover for the above riders will be Rs 25 lakh under all policies of the corporation taken together.

    Complexities made simple: In all life insurance policies premium goes on increasing with age. But in Jeevan Saral, premium has no direct connection with age at entry. A number of marketing leaflets are floating in the market, wherein maturity values
    are projected in direct relation to the premium paid by the policyholder. These projections don’t keep any link between age, premium and maturity sum assured (MSA).The reality is, this policy provides risk cover of 250 times of the monthly premium.

    So proportionate risk premium as per your age is deducted from the total amount paid by you. This is the reason, why the MSA goes on diminishing as age increases. On maturity of the policy the MSA along with loyalty additions (which is declared on per thousand MSA basis) will be payable to the policyholder.

    The drawbacks: There is always a tendency to compare the returns of insurance policies with PPF or bank RD. Please note that an insurance policy is not at all comparable to these saving instruments. When you invest in PPF, you earn interest on interest (since the interest gets attached to your account every year) and you benefit from the power of compounding. But, there is no compounding effect in an insurance policy. The loyalty additions will be calculated on the maturity sum assured (MSA) on per
    thousand basis.

    Return and advantages: This plan is quite flexible and liquidity feature are good in comparison to other life insurance policies. Being a conventional type policy return is risk free, and it varies only as per your age at entry and the term taken by you. Mind it, in direct contrast to PPF or bank RD, the loyalty additions are calculated on the Maturity Sum Assured (MSA) and not on the premium paid by you. So, when your MSA is higher than the premium paid by you, your return gets bigger although you don’t enjoy any compounding interest effect on your funds. Second advantage of this plan is that unlike PPF the term is adjustable as per your need and convenience. Thirdly, in addition to generating a kind of forced savings (because premium payable under the policy is always compulsory and not optional) it also provides a good risk cover. Last but not the least, the premium amount paid to LIC is exempted under section 80c of income Tax act and the amount policyholder receives at the end of the term after payment of all premiums is tax Free under section 10-10D of income Tax act.

    My verdict:A sufficient term life insurance cover along with regular investment habit through PPF and mutual fund is a must, if you ultimately want to cover up all your future and contingent future needs. In addition to that a good endowment insurance policy like Jeevan Saral will multiply your advantages in respect of liquidity, diversification of your portfolio and additional risk cover.

    give your comment on this article.

    1. For discussion ,you can open a thread at our forum – https://www.jagoinvestor.com/forum

  263. vageesh says:

    Chauhan sahab,

    I am 26 yrs of age, earning 31000 per month. I have 50,000 cash for emergency in my savings account which i wont touch unless an urgency comes out.I own no mediclaim policy.
    I am confused how to invest and where to invest. I am investing in PPF account 2000 per month.
    I can invest 3000 per month as premium in any best suited plan. Kindly suggest me the best investment plan for 5 & 10 years. Are the pvt companies such as Bharti axa, tata AIG, Reliance reliable to invest ? kahin aisa na ho k ye bhaag jayen paise le kar kuch saal baad ! plz help me sir. I shall be highly obliged if you can also tell me how to invest in mutual funds .
    regards
    Vageesh

    1. Dont go for regular policies, you can start with HDFC Prudence mutual funds for now

      1. vageesh says:

        Chauhan saab,
        Kindly suggest me a mediclaim policy ( max.8000 ) which has maximum cashless benefits on hospitalization and covers critical diseases like cancer also.
        thanks

        1. Do mean the policies which gives you a lumpsum irrespective of the expenses incurred ?

          1. vageesh says:

            no no ….a policy which has fastest cashless claim settlement on hospitalisation and covers my family members.

            1. This is not the criteria to choose ! . And there is nothing like that . I mean to say , a policy with mediocre features will not help you even if it has fast cashless claim settlement . All the best companies have pretty great response time and you should choose on the basis of features!

  264. pradeep says:

    Hai Manish
    I am A.Pradeep presently invested in HDFC JEEVAN SAMRUDDHI PLAN . Tell me is it good or not?

    Regards
    A.Pradeep

  265. s. mahajan says:

    Hi Manish, we have taken the foll. LIC policies, which I think we should now would like to get out of. Could you please advise whether we should continue, surrender policy, or make it paid up.

    From SA Premium Maturity Prem Till
    jeevan anand 2006 1,00,000 5967 2024 2024
    jeevan anand 2006 1,00,000 5738 2025 2025
    jeevan anand 2006 1,00,000 6916 2022 2022
    jeevan anand 2006 1,00,000 5422 2026 2026
    jeevan anand 2006 1,00,000 7406 2021 2021
    jeevan anand 2006 1,00,000 6480 2023 2023
    jeevan anand 2009 5,00,000 32642 2026 2026
    jeevan anand 2009 5,00,000 34849 2025 2025
    new jeevan shree 2003 5,00,000 31885 2028 2018
    jeevan tarang 2006 5,00,000 34361 2020 2020
    jeevan suraksha 2001 3,80,000 10058 2032 2032

    1. s. mahajan says:

      Hi Manish, Am rephrasing me earlier post. Please advise whether to surrender, continue or go in for a paid up option. The total annual premium paid is Rs180,000. Would like to put at least a large sum of that amount to better use.
      PLEASE HELP
      1. Six jeevan anand policies taken in 2003 for a Sum assured of Rs 1 lac each maturing in around 20yrs
      2. Two jeevan anand policies taken in 2009 with a sum assured of 5 lacs each maturing in 16 yrs
      3. Jeevan tarang taken in 2006 for a sum assured of Rs5lacs maturing in 2020
      4. Jeevan suraksha taken in 2001 for a sum assured of Rs380000 maturing in 2032
      5. New jeevan shree taken in 2003 for a sum assured of 5 lacs maturing in 2028, premium payable till 2018

      1. In case any of these are money back plans , and you are suppose to get back some money in few years , then you can continue it , else the suggestion is to just surrender them !

  266. Selvaraj says:

    so will you REAP for all your SOWINGS (Advises, good or bad)

  267. RAJ RANDHAWA says:

    hello manish…
    i want one LIC policy and this is my first time,i don’t know much about all the policies..
    i only know that i can pay a premium of Rs. 90000 to 1 lakh per annum,so can u please suggest me for which policy i should go for and for how many yrs like 10 ,15 or 20yrs?
    please advice me,so that i can directly ask about that policy terms and conditions to customer care
    thanks
    RAJ

    1. Better not go for any policy . Just take a term plan and invest in mutual funds.

  268. Nikhil says:

    Manish,

    With your help and some extensive reserch on IRDA, Jago investor and Policy Bazaar I finally I arrived at a conclusion. I know there`ll be room for improvement and am open to suggestions.

    Out of the 1.5 lacs of surplus money yearly I have chalked out the following plan.

    1. 25k yearly for LIC Jeevan Amulya SA 1 cr, Tenure 20 years
    2. 50k in PPF
    3. 25K in HDFC top 200
    4. 25K in HDFC Prudence
    5. 25K in DSPBR top 100

    my 3 goals:
    Family security-LIC ,
    Financial Stability – PPF, HDFC Prudenc
    Current money making Future money- HDFC Prudence & top 200, DSP top 100

    Would love to hear your thoughts around the same.

    Thanks Again Manish !!

    1. I think its a very simple and clean plan .. JUst add some money for liquidity purpose too and you are set to go .. I guess its not the best plan, but you should not look for it too ! … just stay in action !

  269. Nikhil says:

    Hi Manish,

    Thanks for the revert.
    I like what you said but just out of curiosity. Is it a bad idea to put 1.5 lacs yearly in PPF. Also I`m 29 so it think by the time it matures I`ll be 44 and will have a fat ppf check waiting for me.
    Please throw some light on why you suggest SIP or MF over PPF.

    Thanks Again!!
    Nikhil

    1. Nikhil

      PPF is safe product, thats why .. Confused yet ! .. PPF is safe and thats why the returns are not at more than inflation .. You are young and have a lot of time in hand to grow your money , assuming you are investing 2 lacs per year .. 1.5 lacs in PPF is too much in low return , if you are investing 5 lacs a year .. then 1.5 lacs is fine in PPF

      At the end its your call if you want to earn 8-9% only on your investments for 15 yrs ! .. if yes, thats ok , go ahead !

      1. Sanghmitra says:

        In PPF, max we can put is 1lac…correct me if i am wrong

  270. Dhivya says:

    Hi Manish,

  271. dr darvesh says:

    Hi Manish,

    I m 29 yr old in govt job with 6-8 lacs salary p.a. with one kid (expecting after 5 mths). Currently, I have following insurance policies :

    1) Jeevan anand (myself): Aug. 2008, 20yrs, 100000(SA), 54576 yrly.
    2) Market plus -1 (myself): Nov. 2009, 15yrs, 200000(SA), 40000yrly.h
    3) Jeevan anand (myself): Apr. 2012, 20yrs, 2000000(SA), 105000yrly.
    4) Mediclaim policy (me and my wife): 500000(SA), 8736 yrly.

    Q. 1) Can you please look at my insurance policies and suggest which option is the best for each policy considering that I m paying considerable premium?
    Continue the policy or surrender or paid-up?
    Q. 2) I m thinking of stopping the 3rd policy (apr. 2012) and buying two online term plans of 50 lacs each from two different companies. What are the best options for this?
    Q. 3) What other options of investment can I look into like PPF/FD/equity?

    plz advice, m very confused.

    1. dr darvesh says:

      manish m still eagerly waiting for the reply..?

    2. You should better stop all of these and take term plan and start a SIP now in mutual funds.

      1. dr darvesh says:

        manish thanks for the reply..but actually, the problem is that i don’t know the fundamentals of equity/mf’s and my father is very conservative regarding putting money into market..so, what should i do in this case ?

        1. You will have to seperate your investments first from your father and learn about money for some time , grab my book and read it, you will get a good start !

  272. anand says:

    hi manish
    i m intersted in jeevan saathi polcy in table no.89
    plz give me details
    anand

  273. shanmugam says:

    Hi Manish,
    i am seeing this article very late!
    i have one question! i took a policy from LIC Jeevan Saral and i am paying monthly 2042/-. from nov 2011. The LIC agent came with a calculation and showed me that 16 lakhs will be the sum assured i shall be getting after 20 yrs whereas in the policy document it shows that Maturity sum assuered is 5 lakhs. i am really bit confused!
    whether i hve to continue this policy (i took this policy for my daughter study, etc., after 20 yrs. she is now 4 yeras old) or
    else can i paid up this policy?.
    should i try for term insurance?
    My total salary per month is 35000/-
    idont have other insurance policies.
    Waiting for your guidance/advice Positively

    1. You will get maturity sum assured + Bonus at the end of 20 yrs, I dont think you will get more than 10 lacs approx . Better get rid of it and start a SIP in mutual funds with long term view !

  274. Vijay says:

    Hi Manish,
    i have one question recently i took one policy from development officer of LIC and policy is bulk of three 1. Jeevan Anand (10,486) 2. Jeevan Saral (9608) 3. Amulya Jeevan (1486) Total Premium Rs. 21510.
    he came with one big representation about this project and finally calculation was something 12lacs. This was my 1st premium if it wont work i dont care i will surrender now. Waiting for Ur guidance/advice Positively.

    1. Vijay

      We really recommend that one should not take these policies, have you already paid first premium and the look up period of 15 days are over ? In that case you stand to loose every thing if you surrender now , but thats the best choice ironically !

  275. Madhurie says:

    Finally closed all of the ULIPS and LIC policies. 🙂 Thanks Jagoinvestor.

    1. Good to hear that Madhurie ! ..

  276. Satish Rajan says:

    Hi,

    One of the best articles I have seen on LIC policies, bonus and surrender.

    I would like to know if you get accrued bonuses (today’s value) on surrender of 1) Jeevan Kishore and 2) Childrens Deferred Endowment Plan…both plans with Profits.

    1. You get bonus , but only after 5 yr . I mean if you surrender before 5 yrs, then you dont get bonus part . Also the bonus part which you will get will be reduced sum, because the bonus accrued value is only for future, if you take it in today terms , then its reduced as per today value

  277. aleti says:

    Hi Manish,

    I am 31 with 1 kid, currently i have below insurace policies,
    1. Jeevan Anand (myself) : June 2005, 21 yr, 300000 (SA), 15494 yearly.
    2. Jeevan Mitra (myself) :jun 2005, 21 yr, 250000 (SA), 12838 yearly.
    3. Endowment assurance plan (myself) : apr 2006, 16 yr, 200000 (SA), 12488 yearly.
    4. Endowment assurance plan (mywife) :Mar2008, 16 yr, 400000 (SA), 25368 yearly.
    5. Amulya jeevan (myself) : Feb 2011, 30 yr, 2500000 (SA), 8400 yearly.

    i think 5th policy ( term policy ) is good one after i read your article.
    From above endowment policies, i took loan and still need to pay.
    so could you please suggest what should i do with endowment policies ? should i continue or paid up ?

    Regards,
    Aleti

    1. Make them paid up , or best surrender all of them

      1. aleti says:

        Thanks Manish , i have decided to surrender all of them , but few questio n here. In this article i saw that ” one can eligible to get reduced Accrued Bonus only if your policy has completed 5 premium paying terms” .

        My plan : Endowment assurance plan (mywife) :Mar2008, 16 yr, 400000 (SA), 25368 yearly” ( premium payment mode is haf yearly in March & Sep 12684 each).

        first of all 5 premium paying terms = 5 years ?

        1) For my above policy am I elgible to get reduced accured bonus as this policy is started in March2008? ( march 2012 amount paid but september is pending , if you consider 1 term = 2 half yearly payment in this case ).

        2) if not elgible, should i pay september premium and then surrender it to get reduced accured bonus ?
        3) which one is greter amount my premium ( Rs.12684 ) or reduced accured bonus , can you just calculate and let me know ?

        I would appreciate your suggestions, Thanks in advance,

        Regards,
        Aleti

        1. 5 premium = 5 yrs .

          You first need to compare both the scenario , what if you surrender now and what if you surrender after paying sept premium . take a pen and paper and do the math .

  278. Balaji says:

    hi Manish,

    I’m 38 with 2 kids. Currently I have these insurance policies :

    1. Jeevan Anand (myself) : Nov 2004, 16 yr, 515000 (SA), 37531 yearly.
    2. Jeevan Anand (wife) : Jul 2010, 16 yr, 500000 (SA), 9181 quarterly.
    3. LIC- Money plus (myself): Apr 2007, 20 yr, 100000 (SA), 10000 yearly.
    4. ICICI Pru Life Time Pension II (myself) : Dec 2004, 15 yr, 0 (SA), 10000 yearly.

    I have started investing in below MF’s and PPF from 2012 with Kids education, marriage and my retirement as goals.

    1. Franklin India Bluechip.
    2. HDFC Equity
    3. ICICI Pru dynamic.
    4. UTI Opportunities.
    5. IDFC Premier Equity.

    1. Can you please look at my current insurance policies and suggest which option is the best for each policy considering that I have paid considerable premiums,
    Continue the policy OR Surrender OR Paid up ?

    2. If paid-up, would we still get the insurance cover for the reducted SA + bonus OR insurance cover is terminated by the company.

    Would greatly appreciate your suggestions. Thank you.

    Regards,
    Balaji

    1. Balaji

      This is a big issue people face with their current existing policies – But you need to look at it from next 5-10-15 yrs point of view .The best thing you should do is make it paid up or surrender , anything is fine . Surrender can be done if you need some immediate money

      Your mutual funds are good , continue them and take a term plan !

      1. Balaji says:

        Manish, Thanks for your suggestion.

        Regards,
        Balaji

  279. chris says:

    do we also have a free look period , i have taken a Jeevan Anand policy and i want to cancel it its just been 7 days, can i cancel it now ????????

    1. Yes you can cancel it , hurry !

  280. Hitesh Daka says:

    Dear Sir,
    Can I buy Jeevan anand LIC Policy online ?
    http://www.easypolicy.com told me that it is possible so, thats y I m asking u ?
    and what is muturity different between Policy Takem from LIC Agents And This online ?
    I wants to invest Rs. 20009/yr….. for 21 years so Rs. : 4,00,000
    what is Muturity at the end of 21 year …. by Agents and by Online ?

    1. Hitesh

      In this case your agents are that website only , so its the same thing , someone will come to your home to collect premium and give the documents

      1. Hitesh Daka says:

        okay .. thanks

  281. N.ANJANEYA RAJU says:

    HI,
    I WANT TO SOME INFORMATION…PLZ MAIL ME

    MY FATHER STARTED LIC MONEY BACK POLICY -15YEARS..
    HIS NAME N.BANGARAIAH
    PLAN TERM IS 74-15YEARS
    LAST 15 YEARS BACK STARTING DATE:(1997,JULY,28)
    FIRST 5TH YEARS RECEIVED RS.12,500/-
    10TH YEARS RECEIVED RS.12,500/-
    AGAIN THIS TIME RECEIVED 54500/- DATE:(2ND,2012,JULY)

    1.I WANT TO DETAILS ABOUT TO THIS POLICY PLAN…74
    2.THIS IS LAST PAYMENT OR ANY OTHER PAYMENTS ARE BALANCE

    1. You should get the maturity amount also , ask on forum : https://www.jagoinvestor.com/forum

      1. N.ANJANEYA RAJU says:

        thank u for GIVEN valuable information…

        approx. how much that maturity amount getting…..

        i am receiving this amounts:
        5th year…..12,500/-
        10th year….12,500/-
        again this time: 25000+28800+1600 = RS:54800/-

        1. I suggest you ask these question here : http://www.jagoinvestor.com/forum/

  282. Sagar says:

    Dear Sir/Madam,
    If I have complete 1 year of my policy of Jeevan Saral by filling every premium, in that case can I liable to apply for loan and on what basis or conditions, and if yes then how much amount shall i get if my premimum is per month 500 rupees.

    1. so you just paid 6,000 ,. How much loan do you expect then ? Also loan is generally available only after 3 yrs !

  283. Babbu Pawar says:

    Hi Manish,
    Just now had the calculations for LIC & PPF
    1) For LIC, if u go for 20yr with jeevan saral plan with annual premium of 35000 then, lic will give u near about 15L after 20 yrs (near @8% consideration/yr),
    2) For PPF, if u go for 20 yr ppf with annual fix premiun 30000 again u will be getting near about same (15L) what we are getting in LIC (near @8% consideration/yr),

    Q So insteed of going two diff way (term policy & PPF) directelly we can go for jeevan saral single policy…..?
    Not that much diff in the final numbers…

    ur comments please…????

    1. How did you get this 8% figure from LIC ? Where did you learn this ? DO you understand the liquidity part ? Do you understnad what will happen if some emergency comes and you want to withdraw from LIC ?

  284. Babbu Pawar says:

    Hi Manish,
    Thanks for this thread, Its very good for new comers…..

    I have some questions…
    1) I am planning for jeevan saral plan for yr 36000 premium, but while reading this article it seems is not worth. Q Whether i enroll or not?
    2) If not what would be the investment options without any risk as lic is having & also what about the life insurance again ?
    3) Which investment option will give near about 10% yrly guaranteed ?

    1. 1. No

      2. Take a term plan and invest in FD or PPF

      1. Babbu Pawar says:

        Thanks for prompt response….

      2. Alok says:

        Hi Manish,

        1. I have jeevan saral (tn 165) policy and already paid 5 premiums of 36030/yr. should i continue this policy or close this policy and take term insurance and invest money somewhere else.
        2. How much will i get if i close this policy?

        1. Close it in 5th year !

  285. Manoj says:

    Hi Manish, your article is very informative. I like to invest 60 to 70 thousand per annum. I am 24 and have neither a Life insurance policy nor invested anything in Mutual funds or ppf. Please guide me in taking proper LIC policy and choosing good Mutual fund investment (together 60 to 70 thousand). Thanks in advance.

    1. Just go for term plan (pure insurance , not return of money later) and mutual funds . Go for a term plan from LIC or any private company and start with HDFC balanced or HDFC Prudence fund for 6 months to 1 yrs

      1. Manoj says:

        Thank you Manish for ur reply. Please tell me which term insurance is best. And I also like to take PPF also. I am in confusion on how to divide the amount of 70 thousand among these (LIC, Mutual fund, PPF). Is taking ppf is better or investing complete amount in Mutual funds is good. Please help me in this.

        1. Manoj

          All of them will give different returns and lock in , what exactly are your goals ?

          1. Manoj says:

            My gioals are as follows:

            1.After 3 years need to do sister’s Marriage for that I need around 6 lack (approx.) .

            2. After 6 years from now need to do another sisters Marriage for that I need around 20 lack (approx .)

            3.In between if possible would like to buy a house in Bangalore.

            Please guide me how to invest systematically so that I can achieve my above goals.
            I am able to invest around 60 thousand this year and atleast 1.8 lac per year from 2013.

            Than you in advance.

            1. I think given 60k per year kind of possibility , the goals are not possible to achieve

            2. Manoj says:

              Please guide me sir as I have mentioned from next year I would like to invest at least 1.8 lac per annum.

            3. In that case also given the time period is small (3-6 yrs) , you can not get more than 10-12% return . In that case also your goals are unrealistic , I would suggest to get some solution from our forum : https://www.jagoinvestor.com/forum

  286. Rahul says:

    Hi Manish, greetings, i want to buy a investment cum insurance plan, i am able to invest rs 50000 per year. i have some plans in my mind like Jeevan Anand from LIC, Smart kid from ICICI. i am confused for which i prefer please help me to find a better produc. my age is 26 years and i have a daughter of 2 years please suggest to find a good option so that i get benefited.

    1. Rahul

      Why do you want to go for Investment + Insurance in One product ? What is the rational behind it ?

      1. Rahul says:

        Manish,

        Please suggest, my ultimate goal is for investing some money for my daughter’s future (Education/Marriage) and also for me in old age,

        is it good for me to buy some child plans.

        1. Just go for mutual funds in that case

  287. Godfrey says:

    Hi Manish,
    I am in a predicament and need your help sorting this out.
    I was sold ” the endowment assurance policy t no. 14 ” LIC policy in 2006.
    my yearly premium is 27,390
    sum assured : 14,00,000
    policy period : 50 yrs. ( this is ridiculous I know ) I was aged 21 then.
    I may not make it to age : 71 yrs ( in all probability)

    I have made payments regularly upto year 2012.
    i.e. 7 yrs x 27,390 = 1,91,730

    After reading your article I have realized I have been fooled into this plan.
    Please guide me so as to stop this policy .
    Paid up – (certainly not an option due to maturity period of 50 yrs)
    surrender – ( return of a meager 49,302 )

    What do you suggest is the best way out of this mess .
    Please help !!!

    1. Truely speaking, you have no option . There is only one option to SURRENDER , do it 🙁

  288. Navish Jain says:

    If I have an eligible policy of SA=5L, with a premium paying term of 20 years, in that case, would FAB be paid (accumulated to the policy) every year starting from year 16 (Rs 60) and then again at year 17 (Rs 100)so on; or just one time at the end of 20 years (Rs 200)?

    1. FAB is always a One time bonus

  289. pradip says:

    Pl explain that does the return varries in lic jeevan saral in term 15 or 16 & 20 or 21
    unlike other traditional policies of lic like jeevan anand etc.as the bonus rate tend to increase in slabs from 11-15 then 16-20,21—-.is it applicable in jeevan saral ?

    1. Yes , its applicable to all the LIC policies which are with profit plan

  290. Ramesh says:

    Hi Manish, I took Jeevan anand policy for 20 yrs in 2008 Oct. every month i am paying Rs.2718. So far i finished 3 1/2 years of premium paying term. i want to surrender the policy now but i came to know that i will get only meager amount if i surrender now. i am little confused whether to surrender it or make it paid-up or simply continue the policy because if i surrender, i will be loosing lot of money. i need your suggestion please.

    1. Ramesh

      You are in same boat as millions of people . Sadly you are into a wrong product (i should say unsuitable), and getting out of it later means more loss , loss right now is also a big amount , but you will have to bite the bullet .

  291. Rupen Kohli says:

    Hi manish, i have a very simple question for you. Plz advise. Basically i want a stamp on my decision from you since u are give such a sound advise!! (i will take the step in a few months).

    I am planning to take LIC solely from a return point of view, and on paper, the Jeevan Saral has attracted me. I am talking of a minimum of 20 years here, most preferably around 30 yrs. I am just 27, so I am viewing this from a retirement perspective. I went to my bank (HDFC) to see what they had on offer and they were pushing me to take their most hyped product, Crest. I listened to them and was drawn to their argument for a moment that LIC policies block my money, i.e. i cannot recover that amount back in a few years or get out of that policy. This point you also have made very clear which i understand. However what I am thinking is that for saving tax i anyways would plan for that roundabout Rs 1 lakh investment every year in multiple places. So i am inclining to take Saral with 60 k annual premium. In this way i am guaranteeing that i would be saving at least 60% of the maximum tax savings that i can every year of my life, and if by god’s grace i see the face of the earth after 30 years, I am getting 11 % IRR (yes, i am good with numbers and through a lot of reverse calculations i made that out from the matrix my LIC agent gave to me) after 25 years in the form of Rs 68,255,06 and 10.65% IRR after 30 yrs in the form of Rs 1,12,82,555. My intention is that i would only keep putting money into this fund and not even take any partial withdrawals so that the final amount is handsome and undisturbed. So in a nutshell, i plan to block 60 k for all my life every year and since that is roughly my one month’s salary right now, i hope taking that much out should not be too much of a worry even once i add more responsibilities on my shoulders in a few years (right now im unmarried). Plz take some time to elaborate on the pros and cons of my decisions because right now i can only imagine the handsome final return (plus any loyalty bonus which you have mentioned) so may be i am not able to view the full picture which you can. Thanx a ton for viewing my long question but it was necessary to fully comprehend what i had in mind.

    1. Rupen

      I dont think you have taken the numbers correctly . The IRR of 11% is not possible , do not trust on the LIC guy numbers which was on template , Its just a estimation with some assumptions , go to LIC website and see the mumbers

  292. RAJENDRAN says:

    I HAVE TAKEN AN ENDORSEMENT ASSURANCE POLICY IN 1981 FOR R.s 5,000 I WOULD LIKE TO KNOW THE EXACT AMOUNT MAY I GET IN 2012(MATURITY).

    1. Your agent will be able to answer that with numbers

  293. Dinoop says:

    Hi Manish,
    Hw r u?ur artical is very informative.need to ask u 1 thing.i hv jeevan saral policy,tenure is 20 years and i m paying premium of 18000 quarterly.is it possible to change the premium amount?as its not worth to close the same before 3 years.kindly advise or if u can spare sum time please let me know the procedure if required so.thanks
    Regards,
    Dinoop

    1. No i dont think it is possible .

  294. Rafiq says:

    Hi manish,

    I have taken Jeevan saral poilcy. I want to know if I continue the policy till its maturity. then will I get the all that money which they display in one table format or not. Forget about closing policy…i will continue….so they will give me the money which they assure or not.

    Pls reply

    1. You will get what is mentioned in your policy document .. Sum Assured is assured + Bonus

  295. sadiq says:

    i would like to know total remaining money i get from my this month matured moneyback 75-20 plan.sum assured was rs 50000(premium 842 paid quaterly for 2o years) and i had taken all 3 bonus)

    1. Sadiq

      Please ask this on forum with more details : http://www.jagoinvestor.com/forum

  296. Nitin Saluja says:

    Hi Manish,

    I have query. Please advice

    I have Bima gold LIC policy and let say it’s payback was dude on 1 Jan 2011 but I change my house so i didn’t received my payback letter. So I went to collect my amount say around may 2012 (after 15 months).
    There I notice on my money which was unclaimed for more than years LIC earned some interest.

    Please advice who would be beneficiary of the interest amount. Please help with proper policy clause.

    Thanks
    Nitin Saluja
    HP: +65-91067375

    1. Did LIC intimate you about the policy when it matured ? If not , then they are liable to give you interest, else not

      1. Nitin Saluja says:

        Hi Manish,

        Thanks for reply.

        LIC sent letter but my address was changed, so I didn’t recieved it.

        Moreover I am trying to know what policy says, even if they sent letter but i didn’t collected it for 15 months. So is liable for interest money. Is there any minimum amount or lowest interest on which I will get my money.

        Thanks
        Nitin

        1. Nitin

          I dont think you stand a chance here .. LIC has sent the letter of intimation to your address which was given by you . It changed in between , but you never informed them , Now they have done their bit , if you do not take your money from them, they will consider it as “idle money” , you are not suppose to get any interest on it , why should you ?

          Its little bit like a FD which has matured, which does not earn anything if you do not renew the FD .. you can never tell banks that just because i didnt come to taking back the money give me the interest on that .. Does not make any business sense to me atleast . what do you think .. How about this situation , you took some money to your friend like 10,000 and told him that you will give 11,000 to him after 1 yr, now you tell him and call him that he should collect it from you , you also go to his home to hand over to him , he says he will come and collect it .. now he does not come for 4 yrs .. and when he comes after 4 yrs , he says that please give me 15k . Is it right ?

          1. Nitin Saluja says:

            Hi Manish,

            Thanks for reply.
            Got your point. Nice example.

            Thanks
            Nitin

  297. Mujeeb says:

    Hello Manish,

    Very Nice Article. And I am also happy to see your replies to comments..

    Hope you can help me with my problem.

    I had taken a policy 5 years back in 2007 (LIC “New Money Back Policy” T. No. 93)

    I only paid 6 premiums which were to be paid quarterly. i.e. only 1 and half years premium.

    Amount 6537 * 6 = 39222
    Now when I woke up and thought of renewing this policy the revival quote is 108569 (Late Fee or interest is 17051)

    I will be getting 75K as money back frm it as its 5 years completed. I would like to ask if its viable to renew this policy or just forget it and close it.’

    Also let me know if I renew and take 75000 and close it ? Will I be able to recover some amount of it ?

    Thanks in advance..

    1. Are you sure you will get back 75k ? Why do you say so , your policy was lapsed , i dont think you will get that at all !

  298. Gomathy says:

    Manish, u recommend to go for Mutual Fund.Can u suggest some good companies …

    1. HDFC Top 200 , DSPBR top 100

  299. Chandra Bhushan says:

    Hi Manish,
    Very nice article. I have a question or suggestion on below —
    I had taken a policy from TATA AIG and paid the premium for 2 years but after that I didn’t pay the premium for three years.
    So, is there any way I can start paying the premium again with some fines and by paying three years unpaid premiums or its all gone?

    Thanks,
    Chandra

    1. YEs ,there will be something called as “revival of policy” .. see that

  300. 100rabh says:

    Hi Manish,
    I have taken Jeevan Tarang policy in June 2010 for 20 years. My annual premium is 76000 rs. After reading your article i feel myself cheated.
    Kindly suggest if i paid up policy after 3 years rather than surrendering it immidiately.
    Thanks.

    1. You are in bad shape right now . Surrendering it now or after 3 yrs will not make much difference, you have already lost a good amount here and wont be able to recover it .

  301. Narendra says:

    Hi Manish,

    I’ve just woken up to the world of personal finance management. Like 90% of LIC policy holders, I too bought (rather forced upon) a policy from an uncle of mine. I have the dreaded Jeevan Shree for which I have been paying up around 25K per year for the last 10 years 🙁

    After reading several articles about this product, I am now really confused – should I continue? Should I surrender? I will get only about 70K back. Or should I make it paid up? I really don’t know how the ‘paid-up’ process works. I gather that I’ll get my money back only after maturity sans any interest henceforth.

    I really wish I had woken up earlier 🙁 🙁 🙁

    1. Narendra

      You dont need anyone else to tell you what you should do , a little math and 15 min will give the answer , or i would say a sad answer . Just see case 1 where yo u continue and case 2 when you do not continue , which one makes more sense from money point of view .what if you invest the surrendered money + future money in something else ? I think you should get more than 70k in case of surrender , why are you saying just 70k ? I assume you are saying this assuming 30% of paid premiums , but thats only after 3 yrs , if you have complteled 10 yrs , then i think you will get around 60% of the premiums paid excluding first year premium . So I assume it would be close to 1.6 lacs + . Did you get this 70k figure from LIC ? Enquire about it !

  302. Basanagowda says:

    Hi Manish,
    I have a LIC Jeevan Anand Policy. I took it in Sep, 2010. I have been paying 38123INR yearly and the Sum Assured is 5,00,000INR. Maturity period is of 15 years. I feel I took a wrong decision by taking this policy. What would be your suggestion for me? Should I surrender this?

    Thank you,
    Basanagowda

  303. rose mal says:

    in august 2013 my money back policy of 1 lakh will be due for maturity i received 20000 at the 5th / 10 /15th year what is the amount i will be receiving in august 2013

    1. Please enquire at company , they will give you the right numbers

  304. Rakesh says:

    Hi Manish,

    I have bought – 25 Yrs. Money Back Policy ….. and per yr. premium is INR 10140 ,

    I wanted to know what would be the returing at the end , is it

    40 % of total sum assured , + bonus at rate of 53 i.e 53*200 * 25 =INR 265000.00
    Total would 345,000 including 40 % of sum assured at the end — is my understaing correct … if not please advice me in details also is it posible to get loan on this policy ?

    1. It would be very clearly mentioned in the policy document or on LIC website , why are you not looking at it ?

      Manish

  305. Timsy says:

    Dear Manish,

    As i am planning to invest Rs 2500 pm in Jeevan Saral Policy for my son future for 20 years. Please let me know is this a good policy to invest. Also i have one query regarding the same, if i pay lump sum Ist year premium of Rs 30K together n later on converted into ECS , is that possible in this policy.. do let me know.

    1. I would not recommend that policy , Just invest in a mutual fund through SIP

  306. Shrikant says:

    Hi,

    I am 25 yrs old. If I invest Rs. 2000 per month for 10 years in Jeevan Saral policy, what amount will i get after maturity?

  307. Romit says:

    Hello everyone,
    I dont know whether it is the right platform to ask this question. But i heard something very strange from my LIC agent.
    He said, “LIC will give you return even if bank stop paying interest after 10-15 yrs.”

    Is it really possible that banks may stop paying interest? Can we have a scenario where there are no debt instruments like FD,RD etc in future? Or if there are these instruments then with very less rate of interest??
    And do you think these interest rates will decrease in future??

    1. Romit

      I dont think bank will stop paying interest, why will they do so ? There is no reason and the statement your agent made I think was mostly to make LIC policies look great .. however there are chances that bank interest may go down if our economy progress a lot after years ..

  308. Iqbal says:

    Dear Mr Manish.

    Can i ask you 1 Questions ??

    Why People Need to Take insurance Policy ?
    If you did not find the answer. Please go to any Widow and Ask. How Her life is going on. Is Insurance policy is important to buy for a family or not ??. I am sure She will Give you a definite answer to you and that will be proper answer.

    2nd thing Remeber ” juth ki buniyad ke sath itni bari corporation banna impossible hain” trust and truth is definitely under LIC

    LIC does not mean any High Return

    How many people you know who can make a Big retirement amount through a saving bank account or Bank Fixed Deposit or Share market or any other Leading Instrument

    saving account : after getting salary within next 20 days it will O

    Fixed Deposit : 10 Yrs , Customer will wait to take the cheque before 2 months of maturity to Cover loan, child Education, child marriage Etc

    share market ; when it will UP. withdraw and make shopping and dinner Etc

    that is happening with 94 % indians.

    Only LIC policy Holder , Even Getting 3% return , will be a Big amount when you will Retire. So if any body dont want to beg at older age to his son or dependent . (99% happening )you can go for a long time LIC policy. For Long Term commitment , your saving will be definite

    Hope you can understand the concept.

    Rember : Unsuccessful Peoples Mind Always negative. So Be Positive dear.
    I given claim to a Lot of client. and I can fell when I go to the client house with a Cheque. whatever client didnt paid. and that will survivor for His Family.

    I request to you all the policyHolder. Please Dont Cancel your Policy with getting the knowledge of a Negative Minded People. Think About Your family. If you love your wife, Children , your parents . Take policy for a long Term.

    Death is Certain but Time is uncertain. If uncertainity comes to your life any time. if you dont have the insurance plan with proper Cover. even your wife will say. My husband was really illiterate. backward minded. your child will not get any guardian. a lot of ………………………..
    Reagrds
    Iqbal hussain

    1. Thanks for your views Iqbal , I hope there are some learnings out of your comment and people can take the right decision

      1. Tushar says:

        Hi Manish,

        I have taken LIC’s Jeeven Anand Policy for 20 years in 2008. I am paying 27K from last 4 years and I have taken this policy when I was not aware about life insurance and investments. But now I as I better understand that clubbing Insurance with Investment is NOT good idea (as it is unnecessary expensive) hence I am thinking why I am paying 27K/Year for only 5 Lakhs of Insurance.

        Additionally I have taken 1 CR of Term insurance (LIC+Kotak) recently hence my Insurance liability is sufficiently completed.

        So now I am felling that paying 27K/Year for just 5 Lakhs of insurance is not logical and additionally even if I think of return I am sure that after paying 5.4 Lakhs (20 years*27K) in 20 years I won’t get more than 12 Lakhs Rs in Future.
        So should I stop this policy & start investing these 2700 Rs in MF SIP better? Will I be in loss if I stop this policy?
        Thanks
        Tushar

        1. Yes.. in my opinion you should stop this now .. just surrender it

          1. Tushar says:

            Hi Manish

            I have enquired about surrendering my Jeeven Anand policy and I came to know that as on date I have paid 91000 in last 4 years and I will get only 46000 back if I surrender this policy. So 46000 Rs of net loss is there.
            So is there any other way you know to minimize this loss?

            1. No . This is exactly what will happen and this is clearly written in policy document .

          2. Tushar Gawande says:

            HI Manish,
            As I told you in my last comment I had applied for LIC Term plan (to be on safer side) where I was suppose to pay 30K/Year for 30 years against 75 Lakhs of SA. But now I got call from them saying as my Weight is 84 KGs (As per LIC as per my height is should be 76 Kgs) they can’t provide me same cover in 30K and I need to pay 16K extra per year. So it will be 46K/Year which I guess is very huge amount for expenses point of view on insurance.
            Can you please suggest me what I should do in this case. My age is 30 Years.

            1. If you are hell bent in case of LIC , hten you cant do much .. else you can get a cover in less than 10k from other insurers !

            2. Tushar says:

              Yes I have decided to cancel the policy but the LIC person told me even if I cancel this proposal and the go to private insurance companies they will also charge me for my extra 8 KG wt. hence frankly I am really scared now and not able to decide should I cancel it or should I pay extra premium to LIC?

            3. Even if you pay extra to private companies, how much will it be ?

    2. Kush Kapoor says:

      I am 100% satisfy with Mr Iqbal View. Thank you Mr Iqbal

    3. Romit says:

      I dont think Manish in any way is saying here that one should not have an insurance cover. It is must for everyone.
      But the point here is that, everyone knows, return from stock market over a long period of time like 20-25 yrs will be much higher than any other thing. And as far as giving a cover to ones family is concerned, one can for a term plan with much higher cover at very less cost.
      So if one is giving 30000/yr in endowment plan(not necesarily lic but any other company also). And the same person buy a term plan for 7000/yr and invest remaining 23000 in Mutual funds, then his return and life cover both will be much higher than any endowment plan.

      1. iqbal says:

        Dear Mr Romit

        You have a good Views. But 97% of Indian Cannot Save money through Stock Market. Because whey they need the money , they sale stock and fill the requirement. in LIC Policy Saving is with Force. there is no option to cancel. only surrender option for which they will get loss. so saving will ultimately continue for future or retirement.
        Yesterday i was talking with one of my friends for saving in LIC. his age is 43 yrs. (career started from 22 yrs)I described the plan and he want to save for his retirement but he was telling to me , right now i dont have any money , i can do after 2 months. see what he is doing from last 20 yrs of his career now even today he dont have money around 50 k to invest. this is going on with indian 97% people. he was invested in FD/Share Market/Mutual Fund many more script. but when he was some requirement faced. he withdrawn.

        Hope you can got my point. That only Life Insurance product is the best saving for Retirement or Long Term Goal

        Regards
        Iqbal

      2. Romit says:

        All these thing said, yes it is correct that endowment plans(specially provided by LIC) has a place in Indian heart and market. And i think it is here to stay for those who dont have the risk apetite to put their money in market.

  309. Rocky says:

    Dear Manish,
    I have 2 LIC policies – Jeevan Surabhi and Komal Jeevan.
    Jeevan Surabhi
    Sum assured: 5,00,000
    start date: 25/04/2005
    Yearly Premium: 43126
    The surrender value of this is 98903 and the paid up value is 2,00,000

    Komal Jeevan
    Sum assured: 3,00,000
    start date: 10-May-05
    Yearly Premium: 22566
    The surrender value of this is 121856

    Pls let me know if I should surrender/make it paid up or keep these policies.

    Thanks for your help.
    Rocky

    1. We suggest surrender always !

  310. Navin says:

    Hi Manish

    Great article, i was about to invest in LIC policies, however after reading your article i have changed my mind and rather go for investing in MFs.

    thanks,

    Navin.

    1. Navin .. thats a wise choice !

      1. Babbu Pawar says:

        again MFs are also depends on the equities, how can we expect better income from them ?
        Can u answer manish pls….

        1. You should first understand that Mutual funds is mainly for growth point of view and over the years you can expect capital appreciation , better you grab my book and read 3rd chapter on equity and debt

  311. Shreela Sen says:

    Dear Mr Manish
    This is a such a useful article, & the “how LIC policy works” graphic is just fab!
    What’s even more fabulous is that you’re still answering comments.
    When I decided to save Rs 12K per month, my Dad (being Dad) din’t allow me to invest completely in mutual funds. I put equal amounts in ICICI Prudential Focused Bluechip Equity Fund Retail Growth SIP, Jeevan Surabhi of 4,50,000 SI, & Post Office 5 yrs recurring deposit. DO you think these LIC policies are totally dud?
    Thanks for your help!

    1. Shreela

      LIC policies will give you 4-5% return , now you need to tell me if they are dud or not 🙂

      1. Shreela Sen says:

        Thanks for replying.
        But I must mention that you make “Mutual Funds” sound too simple. (On this page) you talk of MFs as if they are standardized, homogenous products. While it’s not z case. It’s as easy to lose money on MFs, as on endowment plans & ULIPs, only, sans z illusion of comfort
        😉

        1. They are simple product i would again say that . here I am talking about a category of mutual funds and its equity mutual funds . Its like LIFE . Its complicated dependening on how deep you want to explore it . thats the reason there are happy and sad people . Life is same .

  312. Jose says:

    Hi,
    I have an double cover endowment plan…which i took in Kuwait.
    Sum assured: 10000$
    start date: 01/03/2009
    date of last payment:01/12/2023
    QUARTERLY Premium: 194.42$
    Paid till 03/2012.
    Options that this policy comes with…
    sum assured can be reduced after one year.
    ssurrender or paid up option after 3 years for full terms & 2 years incase of limited term.
    Pls let me know the available options to minimize the lost amount.

    Thanking you for your kind colloboration.

    Jose

    1. Its just like other LIC policies .. just get rid of it

      Better ask it at https://www.jagoinvestor.com/forum

  313. bibekananda sarangi says:

    Hi manish what a great article.
    i am in very much confusion for my financial planning.I my annual salary is 480000.
    and take home is 35000.I have a jeevan tarang poicy witha annula premium of rs.15200 for 17 year.Now the situation is one of my relative is lic agent and he wants me to by a policy.He already convinced me for buying jeevan anand-but after reading your article i am in no mood to invest much into jeevan anand.i’ll definitely do a lic with him but with smaller amount.Is jeevan tarang ad jeevan anand is same kind if policy with life time cover.For investment purpose what i really need to do where i have to invest.Please suggest me .I’m in intial stage of my carrer .My age is 27 .S/W engineer by profession.Please keep in mind i’ll definitely buy one more policy .Suggest me how much i have to invest in LIC as i have already invest in it and other area where i can invest my money.
    Thanks in advance

    1. there is no sense in investing in LIC , you can do it if you want 4-6% returns , but other wise there is no reason . Stop investing with your agent who is a relative also .. You should invest in Mutual funds through SIP’s

      Manish

  314. Romit says:

    I have a question about LIC maturity amount calcualtion.
    The following is my estimate of the sum i can expect to receive on maturity of my policy(LIC Jeevan Mitra) based on the information given in the article. Please verify it is correct or not.

    1. Sum assured = 5 lacs

    2. Simple Reversionay Bonus = For last few years it is 50rs/1000 SA. If we take an average of 45rs/1000 SA for 21 yrs, then it will be 21*45*500 = 472500

    3. FAB = For 21 yrs, it is given in the table 250rs/1000 SA. So it will be 125000.

    4. Loyality Addition – Not taking into account as no idea of the rate

    So total amount receivable on maturity = 472500 + 125000 + 5 lacs = 1097500

    The premium for this is around 26000 + taxes(yearly) with accident benefit.

    1. Yes that is correct . But remember that this is estimate and depends on actual bonus figures . Also FAB is not always sure .. Its at discretion of LIC

  315. subhash says:

    MANISH I TAKE JEEVAN VRIDHI POLICY. I INVEST 1.50 LACS. IT IS 10 YEAR PLAN. COMPANY TELL ME YOU WILL GET 3LAC+70000 LA. IS IT GOOD FOR ME

    1. Your money will be doubled , what else … The IRR wont be more than 4-5% … is it written in the policy that you will get 3 lacs + 70,000 ? Who told you that

  316. Romit says:

    I have just started my career and financial planning. I want to start with taking an insurance. I dont have any financial dependencies as of now and i am thinking of taking 15 lacs cover using LIC jeevan mitra(triple cover, SA=5 lacs).
    I also thought of taking a term plan but now i have decided to take it after getting married(after 4-5 yrs).
    The logic behind going for one LIC policy is that after getting married, i will have 2 life covers, one from LIC(very reliable) and a term cover as well(from pvt company, not as reliable as LIC).
    Please tell me if i am right in doing this?
    And are there any implications of having 2 policies from 2 different companies? Can one company reject the claim if other has rejected?

    1. Romit

      What you should see is your sum assured and not the number of policies, is your cover enough ?

      1. Romit says:

        Right now i dont think i need any cover what so ever as no one is dependent on me for a single penny. I am taking it for future, as most probably i will be getting married after 4-5 yrs. And just to make sure that in case my parents need some money and i am not there, there should be something on which they can rely. So right now i think 15 lacs cover is more than enough and i will be increasing it with my income and age(as i told you that i will take a term plan after marriage).
        And the reason i asked about the number of policies is that i have heard that one should divide the sum assured in 2 policies so in case 1 company rejects the claims then there is other to fall on.
        And the reason for choosing LIC is that their claim ratio is best in the industry.

        1. Romit

          Ok in that case you can go with a lesser cover , but for checking just check the premium of 15 lacs in LIC and 50 lacs in other companies and then go ahead

  317. Veer says:

    I want to surrender my lic jeevan anand, after reading blog. I’ve paid 4 premiums, 5th one i have to pay this april. When i called lic customer care they are saying that, if i surrender right now, i’ll get 50k (50k loss). But my lic agent saying that, dont’t surrender rightnow, pay 5th premium & if u surender next year, u will get 80% back (1lack). I would like to know that…..is it true (my lic agent thought)? Please reply me asap, bcz i’ve to decide by this month? Any quick response?

    1. Veer

      I dont think you will get 80% at all .. you will get around 40% of your 4 premiums .. thats all

  318. A PAL says:

    I have 2 LIC Jevan Mitra Tripple Cover & 1 PLI endowment assurance Santosh policy as listed.My age 34.A Central Govt Employee
    1. LIC 133-26-26. SA 1.1 Lac Premium 5540/ pa
    2. LIC 133-27-27. SA 1.1 Lac Premium 6630/ pa (Having critical illness & premium wave off rider benefit)
    3. PLI EA/45 santosh of 1 Lac, Premium 5576 pa. PPT-17 years.
    What will be its Appx maturity value.
    Now I would like to take 1lac LIC Jevan Tarang 10 year PPT, 2 Nos 50th each LIC jevan mangal What will its premium.

    1. A Pal

      Just add all your sum assured and multiply it with 1.5 to get a rough estimate

  319. Bimal says:

    Thanks Manish for your suggestion and concern! I approached to LIC only after taking your views through this blog which I found matching with them. Regarding HDFC ULIP schemes, although, they had suggested for continuation for another few years, I had opted to surrender immediately. I have started a few SIPs and opened a PPF account which, I should have done much earlier. Unfortunately, my contact with you was late. Neverthless, I am happy that whatever financila decision now I’m taking, I’m doing with much certainity and consciously. Thanks again for your support!

    1. Good to hear that Bimal .. keep going like this !

  320. Sourabh says:

    Hi Manish,

    A very eye opening post. However I find it hard to understand your recommendation of surrendering the endowment plan despite the premium paid. Consider for example, I have a Jeevan saral policy for which I have paid a premium of Rs. 60, 000 over 1 year. If I were to surrender it now, I would actually loose all that money. Are you saying that I can recover that lost amount of Rs. 60, 000 by investing into equity linked MF etc.? Given the current market situation and underperforming MF’s, do you think that is a good idea?

    Best Regards

    1. Sourabh

      Yes .. i mean that only .. it goes like this ..

      You can invest 60,000 per year for next 20 yrs and generate amount X by getting 5% return . Now instead of that forget that first year and now invest that 60,000 per year for 19 yrs to generate Rs X + Y by getting 5% + Z% return , all you need is 6% return . Is it hard to get it ? FD’s , PPF and equities, all will give way better return .

      Manish

      1. Sourabh says:

        Thanks Manish. This is really food for thought.

  321. Bimal says:

    Hi Manish & other Esteemed reders,
    Suresh might have written this out of frustation. My experience was totally different. I had a Jeevan Saral policy for last 2 yrs and when I approached to my local LIC office, the officer concerned had suggested me to pay for another one year and go for paid up option to minimise the loss. Similarly, I had a few HDFC ULIP schemes and they had also shown concerned and suggested how to go for minimum losses. My opinion is choice is ours whether to go with LIC or not. But for someone’s inappropriate behaviour, let us not blame the whole organisation.

    Regards,

    1. Yes Bimal .. agree .. regarding the suggestion made by LIC to you , just make sure you are convinced and have a proper understanding of both the scenarios !

    2. Suresh says:

      HI Bimal,

      I have not written out of frustration. I have paid just 2 premiums which is worth 5.5k; so no big deal. The LIC told me too to pay upto 3 years and get back some percentage of money at the end of 3 years.

      If i were you I would pay upto 3 years and take whatever I can from LIC since I have been paying for 2 years, but mine is just 2 premiums old. I just tried if i can get my money back if not full at-least half, but the LIC office denied since they have rules. I wrote my experience to educate others who may think of approaching LIC to take back the money which they won’t get if they try too soon like me.

      I am just supporting this article. 🙂

      1. Suresh

        Do you know how much you will get back after you want your money back after paying for 3 yrs ? Its generally 30% of your 2 premiums . Which means that just 0.6 times of your 1 premium . thats all … So if you pay 10,000 per year , and you have made 2 payments , then you have two choices .

        1. Do not pay third premium and save that 10,000
        2. Pay 10,000 more as 3rd premium and then get 6,000 back at the end of 3rd year (30% of 2 premium)

        Manish

  322. Suresh says:

    Hi Manish and Readers,

    After going through this article few days ago, I decided to cancel my LIC Surabhi (15 Years Plan). I paid 2 Premiums so far. I went to LIC office to request to cancel my plan and refund me, but they did not refund, and instead said to stop paying the premiums.

    I have not got my refund, but I am deciding to stop paying premiums and stop getting cheated by LIC.

  323. dev says:

    jindagi ka saath bhi jindagi ke baad v lic bima karao jiban ujjwal banap

  324. samir says:

    It insurance policy. You should not expect interest on it.

  325. S.Murugesan, Tirunelveli, TN says:

    Hi Manish Sir,

    Your articles on insurance are elaborate and great. Thanks for your contributions.. I have an issue. My friend cum LIC Agent desires me to open a Jeevan Anand Policy in the name of my son (23yrs now) for a tenure of 20yrs with SA Rs 15,00,000 and the annual premiun works out to be Rs 52,374/=. He assured that by the end of 20 yrs, the LIC would pay Rs 40,00,000/. It looks attractive and i am still doubtful after reading many of your articles above. Please clarify whether i should go ahead or stop it. In case, I accept the policy, how much my son would get at the age of 43.. please update me ..

    1. No , you should not take, there is no guarantee of 40 lacs like this, ask him to provide this guaranteed sum (40 lacs) written on LIC bond . he wont be able to .

      Ask him what is the final return at the end of 20 yrs (in %) and proof of it!

      1. S.Murugesan says:

        Thanks Mr. Manish for your timely and valuable guidelines.

      2. Curious says:

        What is the GUARANTEED return in mutual funds or equities then? What’s wrong with you? The only thing you seem to be good at is bashing LIC…lol. God Bless. May mutual funds protect your family and make you a LOT of money.

  326. someshwar says:

    hello sir i want invest money yearly rs 100000 which is best plz advise me some other mode of saving and security plan so as to grow my money…….

    1. What are your goals and risk appetite ?

  327. Nilufer says:

    Thank you so much Manish, for your always so prompt reply…

    yes, you are right… i am getting an IRR of just 4%!!! really amazing, how we give so much of our hard earned monies to LIC and all we get in return in pennies… i will right away stop payments of premiums to all my policies…

    For my last two Money backs which have only completed 3 years (stated in 2009 and 2010), what do you suggest i do… surrender them..or let them be for 20 years? As you say if made paid up only after 3 years, we would not get any bonus… pls suggest… I have paid nearly 14000 x 3 = 42000/- towards each of the two policies…On surrendering i may hardly get 9000/- towards each policy..

    Thank you for all your help, Manish.. God bless you for saving me from such a blunder.. till date i was putting monies in these policies, trying to save for my retirement!!!! now have started SIPs from next month, for a period of 10 years.. hope to get better returns than 4% 🙂

    Rgds,
    Nilufer

    1. Surrendering is a tough option in short term , but good in long term . I suggest better surrender it

      Manish

  328. suriyen says:

    Hi Manish Chauhan ji,

    I am getting 27 yrs. I want to open a premium around 20000 p.a.

    Which one is the best?

    1. What do you mean by “open a premium” ?

      1. suriyen says:

        Taking a new policy.

        1. LIC policies are not recommended at all .. you can invest in Mutual funds

  329. Abhishek says:

    I am having LIC jiban saral started 10 months back..49000 per yr.What should I do?

    1. Abhishek

      It will give you 4-5% return over long term, its highly illiquid also , what do you think you should do in this case ?

  330. Sapan says:

    Mainshji,

    Can you guide me to start my Investment. As if now, I have only few FD’s and want to started with right bases. ll be very thankful to you. Becoz guidance is the first step to any Investment. Married, wid no kids yet. Earning ard 50k per month.

    Thxs

    1. Sapan

      I think you should get started with Mutual funds, open an account with FundsIndia as they support NRI’s mutual funds investments , they will take care of rest , just contact them . if you are very new, I would say dont hurry and worry , Learn about things in next 3-6 months and then take actions

      Manish

    2. Sapana says:

      Hey,

      Can you tell me how to contact them.

      Thxs

  331. Sapan says:

    Hey Mainshji,

    Pls help me to create username and password for the following email Id. As it is showing error when I m trying to do so…

    Thxs

  332. chandra says:

    I am a little confused. Is there any difference in final returns in making a policy paid up after 3 years or 5 years of premium paymen? In the chart at the top of your article you mention 5 years to get accrued bonus and later in the text you mention 3 years.

    1. Chandra

      yes .. if you make it paid up after 5 yrs, then you also get the bonus accrued till date , if you make it paid up before 5 yrs, you dont get bonus

      Manish

  333. saurabh says:

    my second question is that .. does lic term plan amulya jeevan covers for accidental death only or does it covers for natural death ..death by illness like cancer ..heart attack etc….

    1. Saurabh

      It covers all kind of deaths . All the term plans does

  334. saurabh says:

    thanx manish for ur quick response….i want to buy a term plan from lic …should i wait for few more months bcoz it says that lic is working out on its term plan to lower its premium..and second what should b the sum assured for me ..my annual income 6 lakhs….. plz guide me………

    1. Saurabh

      You can wait , but the thing is you will be uncovered for that much time . Its your call .

      For how much cover you need , better you use our insurance calculator : https://www.jagoinvestor.com/calculators/html/Insurance-Calculator.html

  335. saurabh says:

    dear manish…
    i am a lecturer age 34 years ..i was planning for a jeevan anad policy for 8 lakhs sum assured for 28 years ..but with your article and nice calcuation..i m hesitant now…? shold i take term plan instead of jeevan anand? if yes which one would u suggest for 30 lakhs sum assured and period of 25 years? plz suggest me some other mode of saving and security plan so as to grow my money…….
    regards..
    saurabh shukla

    1. Saurabh

      Dont take any endowment plan. Better take a term plan and just put your money in balanced funds each month for long term .. You can take a term plan from the company you trust like LIC , KOtak , ICICI , HDFC etc

      Manish

    2. PRAKASHKUMAR .P says:

      If you take a Term Insurance Plan of Rs. 30 lakhs for 25 years, So in this mean time i.e. for the time of 25 years (or Premium Paying Term for 25 years) only you will be having Insurance protection after 25 years if you died means your family will not even get One Rupee from any Insurance Company. So if you die then only your family will be survived otherwise the money what you had paid will not be come back. So as per my plan first if you are having enough savings for your family’s future then you can go to any Term Insurance Plans.

      1. Prakash – I am surprised you say Term Insurance is for big business people alone and that you are a Insurance advisor? My Gosh.

        Do you know to calculate the IRR on the plans that you sell? I bet not.

        If you take a term plan for the same coverage as a LIC policy and invest the rest (premium paid for LIC policy minus premium paid for Term insurance) in PPF alone the returns will be astounding. Split this amount between a Mutual fund portfolio and PPF and chances are you come out extremely successful.

  336. Gajjan says:

    Hi,
    i have jeevan saral policies ( Paid 4*60,000 =2,40000)premium.What should i do ?
    What amount i will get after 5 years paying premium ?
    It will be advisible to pay 10 year premium , as it will add the loyalti addition ?

    Thanks

    1. Gajjan

      You are now very clear what happens in case of surrender / paid up / continuing the policy . So decision is all yours

  337. Sunil says:

    Hi,

    Can you please let me know from where can I get the terms and conditions of any LIC policy? It’s not there on LIC’s website.

    Thanks,
    Sunil

    1. Sunil

      Its all there in the website . which policy are you looking for . Also if you have bough the policy then it will all be there in the policy document

  338. Manish says:

    Hi manish,

    Great article. I have so many policies from Lic, i dont have any issues with lic. But i joined a policy from reliance through a friend. Its 5000 yearly, when i noted the sum assured its only 57400 only as i am paying around(85000) for 16 years only. Its moneyback in every 4 years. They only giving the sum assured as money back.

    1. Manish

      Money back plans from reliance or any other company (even LIC) will be giving you very small returns (in percentage) , they are not the best choice .

  339. Amit says:

    Hi Manish,
    Thanks its very useful, as all your posts are!
    I m looking for a LIC plan specially for pension plan, got to know abt Jeevan Tarang. Can you suggest how it works and it be fruitfully in long run for 15 yrs. I am of 30 yrs.

    —Amit

  340. Rashmi says:

    Hi Mr. Manish,

    gud article..

    I m looking for a LIC plans which pays me back at intervals , got to know abt Jeevan Rekha. Can you suggest how it works and ll it be fruitfully in long run for 10 yrs. Also looking for some plan for my husband too which give us good saving and health cover. we both r 28 yrs.

    Thanks

    1. Rashmi

      Thanks for asking the question. We use our forum to answer personal questions , so that more people can have a look at it and give their comments too . Please ask your question on the forum where I personally and others reply very fast . It takes 1 min to create a login and start asking question .. Incase you want me to create a login/pass – let me know

      https://www.jagoinvestor.com/forum/

      1. Rashmi says:

        Hey,

        pls help us in creating the login / password. When trying to do , it is showing Email Id already exists.

        Regards.

  341. Bharath Kondam says:

    Hi Manish,

    Great Job in articulating the summary of Insurance products. I agree with you in essence that India progressing with high rate of inflation. By which you can have a strong argument, but we can’t conclude because of same reason. Look at America, Inflation of the country is flat for last 25 years, now all old people who invested in AIG are the wealthiest people. So your argument has weight-age when inflation is high. So culprit is Inflation which makes you feel all insurance products not a good option to invest. Govt. of India need to stop the high inflation regime.

    1. Yes agree .. but my comments are on assumption that for some more decades the inflation in india will remain good enough .

  342. Bimal says:

    Manish, my issue on Jeevan Saral requires some more clarification. If I continue till 4th or 5th year and then surrender as you have suggested, how it will be gainful for me? Also, there is a provision for partial surrender of the policy – what exactly it is?

    Regards,

  343. Bimal says:

    Thank you Manish for your quick response. Please suggest a few short term and long term investment options for making wealth.

    Wish you better and better!

    Bimal

    1. Bimal

      Long term options , I only suggest Equity products like mutual funds . for short term , you cant make wealth , it can only grow marginally ! .. FD’s are the options !

      Manish

  344. Deepak says:

    Hello Manishsir,
    If I deposit rs. 100000/- each in same bank but in two different branches(i.e. one lakh in each branch) then how much money is insured is it rs. 100000/- total or both Rs. 200000/- because they are deposited at two different branches of same bank.
    In addition sir plz let me know how good is the Tamilnad Mercentil bank if I deposit my money in its two different branches . safest or not?
    Are there any sort of bonds or FD which are completely tax free just like the earlier RBI tax free 6.5% bonds.
    Thanking u. Plz reply.

    1. The total insured in each BANK is upto 100,000.

      TMB is a stable bank – you can deposit money there.

      Tax free bonds may be bought in the secondary market but the yields are low – there are no fresh issues open now.

  345. Bimal says:

    My question is to Monish to suggest on the following:
    I invested in LIC Jeevan Saral in 2010 through monthly deduction of Rs. 9000/per month which is more than one lakh in a year. I have not completed three years yet. What to do now? Should I surrender now or complete 3rd year and go for paid up option? Same problem is with HDFC Endowment Supreme where I had paid for last 2 years one lakh per annum but dnot want to continue more. How to get rid of it with minimum losses? And what are other best investment options for less than 5 years and more than 10 years?

    Regards,

    1. Bimal

      You can surrender your LIC policy after 4th or 5th year and better stop paying premium for your HDFC plan

      Manish

  346. Ganesh Sinha says:

    Hi,

    As many commented, I definitely think you are associated with some private insurance company. If you want to say endowment policies are not good, please be generic and don’t be particular with LIC. Your entire website talks ill about LIC. I don’t know if this is because of your personal or professional conflicts of interest.

    Ganesh

    1. Ganesh

      LIC has 95% of endowment market , so I think putting the LIC name is very appropriate and almost 19 out of 20 people have LIC product only , so it connects with readers better .

  347. Lehman created several of these products – true. It is like playing with fire. Let me summarize this for everyone’s benefit.

    Bank A gives a loan to Person A to buy house. Lehman then bought this loan from Bank A and securitized it – means they sold bonds based on expected future income stream from person A. Now one person’s loan will be a small amount. Say – USD 300,000. So I-Banks bought these loan assets from banks for several thousand persons, securitized them and sold them. Infact even within this asset sale they grouped it – saying Tranche 1 payments will be received by Group 1 of investors. It will be the first set of payments received. Some of them were even AAA rated. Lower tranches had more % yield and were rated lower. I-Banks estimated that even if 40% people default this can continue. If people like person A paid back the loan installments on time there would have been no financial crisis – literally. Unfortunately that was not to be.

    Though Lehman created these products if the distributors sold them to pensioners and families the fault – to some extent lies with the buyer as well. Misselling cannot happen without misbuying. Like we cannot blame only LIC and agents for selling poor performance products – buyer is at blame too for not asking the right clarifications.

    There is no scam here in Lehman. Ofcourse commissions were taken for the product as with ANY FINANCIAL PRODUCT. But as I said if everyone paid their dues there would not have been any trouble, really. Lehman was a USD 42 Billion capitalization firm and was thought of as a small fish (though extremely infuential in the market). Perhaps if they had been bailed out the financial crisis would not have attained such major proportions – their fall was like a breaking of a dam. But that is my personal opinion.

    The products sold obviosuly came with disclosures – as transparent as it can be – that investing in them included risks of substantial losses including loss of capital. Who cared? INvestors – no!

    You need to understand and agree that Mutual Funds in India are not even allowed to hedge their positions by buying/selling derivatives. They purely buy and sell securities and bonds/CDs/CPs. Granted they can buy junk bonds as well but the overall benefits far outweigh the risks and losses.

  348. I ofcourse know the Lehman story first hand even as it was unfolding in Jun/Jul 2008 as I also shorted the stock at $29 some 25 days before the bankruptcy and was literally outside Lehman on Sep 15, 2008 Monday as I worked 1 block away in NYC.

    The point is – where do you see the scam and why do you think LIC policies are better?

  349. Gnanesh V says:

    DONT JUMP TO SAY THAT THE ABOVE IS A BRITISH TELEVISION FILM. ITS REALLY ELABORATING THE EVENTS THAT WE ALL WITNESSED.

    IF THIS IS NOT A SCAM WHAT ELSE IS A SCAM…
    READ ON FURTHER…

    wikipedia.org source:

    Financial fallout

    Lehman’s bankruptcy was the largest failure of an investment bank since Drexel Burnham Lambert collapsed amid fraud allegations 18 years prior. Immediately following the bankruptcy filing, an already distressed financial market began a period of extreme volatility, during which the Dow experienced its largest one day point loss, largest intra-day range (more than 1,000 points) and largest daily point gain.

    What followed was what many have called the “perfect storm” of economic distress factors and eventually a $700bn bailout package (Troubled Asset Relief Program) prepared by Henry Paulson, Secretary of the Treasury, and approved by Congress.

    The Dow eventually closed at a new six-year low of 7,552.29 on November 20, followed by a further drop to 6626 by March of the next year.”

    READ THE FOLLOWING CAREFULLY

    “The fall of Lehman also had a strong effect on small private investors such as bond holders and holders of so-called Minibonds. ”

    In Germany structured products,
    often based on an index,
    were sold mostly to
    private investors,
    elderly, retired persons,
    students and families.

    Most of those now worthless derivatives were sold by the German arm of Citigroup, the German Citibank now owned by Crédit Mutuel.

  350. Gnanesh V says:

    Wikipedia.org article on BBC detailing about collapse of Lehman…..

    “Last Days of Lehman Brothers

    The Last Days of Lehman Brothers summarizes the events that occurred over the weekend preceding Monday 15 September, 2008, when Lehman declared bankruptcy.

    Investment bank Lehman Brothers is in trouble after a turbulent six months in which their real estate investments have lost billions of dollars, causing steep drops in Lehman’s stock. Lehman’s boss, Dick Fuld (Corey Johnson), who brought the firm through other crises, is himself growing desperate.

    Fuld’s plan to spinoff the company’s bad assets into a separate company does not satisfy investors, and Lehman stock drops by 75% in one week. Fuld’s only remaining solution is to have Lehman acquired. Both Bank of America and Barclay Bank are interested in purchasing the firm but are dissuaded because so much of Lehman’s assets are “toxic”, worthless.

    Lehman’s problems have put the US government in a delicate position. The collapse of a firm of Lehman’s size would have catastrophic economic repercussions well beyond the firm itself. Because there is no political support for a government bailout of the firm, the government turns to Lehman’s competitors for help. Late on the afternoon of 12 September, Friday, the leaders of the top investment banks on Wall Street, Lehman’s competitors, are summoned to the Federal Reserve Bank of New York. American Treasury Secretary Hank Paulson warns the incredulous group that Lehman is not too big to fail and that there will be no bailout using public money. Instead, Paulsen cajoles the bank heads to work out some joint plan among themselves to relieve Lehman of its toxic assets, warning them that the steep price they would pay to save Lehman would be easily outweighed by the cost of its failure. He also intimidates the bank heads by reminding them that they too will soon need help. A solution must be found before trading opens in Japan on Monday morning.

    By Friday evening, Bank of America begins stalling the deal, noting that Lehman’s valuation puts them “underwater” by billions of dollars. Fuld must now depend on Barclays, and he is clearly growing more desperate. Retaining hopes that Bank of America will change its mind, Fuld has the firm’s attorney Harvey R. Miller (Richard Durden)begin drafting a bankruptcy petition.

    As Paulsen’s group searches for alternatives, Lehman’s assets are subject to “valuation” by analysts from other firms. The analysts spend the night pouring over boxes of paperwork. Calculation is made extremely difficult because much of the assets are based on CDO instruments whose value is difficult to assess.

    Discussion continue at the Fed throughout Saturday with little result. John Thain of Merrill Lynch (Ben Daniels) pulls out of Paulsen’s bailout group, telling Paulsen that his company is in discussions with Bank of America. As they are no longer committed to Lehman, Bank of America is free to consider acquiring Merrill Lynch, which desperately needs the deal. Since the prospect of acquisition makes it less likely that Merrill will need help from the Fed., Thain has little incentive to continue participating in Paulsen’s discussions. As Thain leaves, he learns from Paulsen of the Fed’s plans to bailout AIG, whose Credit default swaps insure half of the western world’s banking system.

    By Sunday morning, Fuld receives word that Barclays has agreed to acquire Lehman Brothers, saving it. Jubilation is short-lived. Under British law, Barclays cannot guarantee Lehman’s debts until its own shareholders vote on the matter, and that will not happen until Tuesday – beyond the Monday morning deadline. Paulsen reiterates that the Fed will not “back stop” Lehman, not even for the 2 days it will take for Barclays’s shareholders to vote. With no chance of a buyout,

    Lehman has no choice but to file for bankruptcy. Lehman’s CFO signs the petition just minutes before the midnight deadline. A devastated Fuld leaves his office as Lehman’s now unemployed staff cleans out their desks.”

  351. Lakshmi says:

    Hi Manish

    I have taken Jeevan surabhi policy for 15 years and my premium is 132000/- per year. I have completed 1 yr and I saw your article. Yesterday I took my bond and saw my Sum assured is just 1200000Rs. Am paying 1584000Rs for 12 yrs for which am getting just 1200000Rs. I saw these people talking about 6-7% interest. Thats nothing. I want to stop paying my premium as early as possible. If I stop paying my premium after 2 more years, I would have completed 3 years of premium paying terms. Am not planning to surrender. So after 15 years what would be my returns. Am I going to get all my 3 premium paid + bonus or just 2 yrs premium + bonus? Please advice as am paying 132000Rs which is a huge amount.

    1. Laksmhi

      You are talking about “Paid up” option, inwhich case you will get all 3 premiums only (No bonus) . So it will turn out to be slightly better than 0% return !

      Manish

  352. Gnanesh V says:

    Dear JustGrownMoney,

    Lehman Brothers scam what you have stated is not true. I happened to see 2 reports in BBC.

    The first one was on South Korea. People have invested in Lehman Bros, and other mutual funds their entire Pension Corpus. The worst tragedy that happened in 2007 was people getting pension from these Mutual Funds, Lehman Bros. in the age group of 65-75, became penniless in 2007. They had to restart to go for some petty job to see that they get food. Infact I remember seeing an erstwhile Admin Manager started to work at age 68 as a TAXI DRIVER because his entire pension corpus was swept away overnight.

    The second report I saw was also in BBC some six months ago. Financial Market scam has put a dignified pensioner in Malaysia to become a SERVER at age 70.

    I think we are missing one major point. Getting money out of Mutual Fund at a specific period say 10 years from now, this much amount… is never a reality. Suppose if one had invested at age 45 in year 1998 with a view to take money out after 10 years. Stock markets crashed in 2008 and Mutual Fund values were down 70-75% down. If this person has an obligation to educate his son, he would never be able to do so. All Mutual fund Pundits will say wait 2-3 years, and realise your money later at higher NAVs.

    How will the pathetic investor feel when his objective of educating his son could have to wait for 2/3 years.

    So, my inference stays. I will continue with LIC and all my other investments in all avenues. It will be stupid for me to surrender any plan. I will not expose my self to mutual fund beyond one-tenth of my investible surplus.

    In my analysis out of 1500 odd mutual fund schemes which have been floated in the last 15 years, only 75-80 schemes have really given a yield of 12-15% compounded yearly. 0ther 250 companies have given a yield of 8-12 %. Further 600 odd schemes have given below 8% yield. Rest schemes have given negative yield.

    From my analysis, salaries paid to Mutual Fund managers are mind boggling… 10 times that of a manager in a Bank or LIC noway comparable. Why I should pay such exorbitant sum for maintaining sub-optimal investment with no guaranteed exit point

    1. There is a world of difference between the word SCAM and an investment losing value. SCAM is simply swindling money. In case of Lehman Brothers – I repeat – there was NO SCAM. They sold loans as assets with expected future payments – when those payments stopped/slowed the entire CDO market came down and it is a separate discussion in itself.

      As part of sound financial planning one is supposed to move to Debt 2-3 years before the stipulated date of use of funds. If someone has moved to Debt in 2005 their corpus would have survived. For people who wanted money in 2011 the crash of 2008 put them behind but has not the markets come back as much as in 2008. Except for the great depression of 1929 no market downturn has been longer than 3-4 years.

      A LIC Agent gets about 40% of the initial investment as commission. Then about 1-2% on an ongoing basis.

      Return on Endowment plans: 7%
      Commissions and costs: 2%
      Net return: 5%
      Commission as % of return = 28%

      MFs:
      Return on MFs: 10% -12% at the average end – 18% long term average
      Commissions and costs: 2.25%
      Net return: 10% to 16%
      Commission as % of return = 14% to 22.5%

      Now you see who takes more cut of money -as a percentage of returns! For LIC the money is split among 1000’s of agents while it is concentrated for MF managers – thats all.

      Low exposure to equities is a guaranteed way to mishandle future planning I can be as blunt as that. As said before – to each his own!!

  353. ANIRBAN says:

    PLI ENDWOMENT IS BETTER THEN LIC AS IT GIVES HIGHEST RETURN. ACCORDING http://wealth.moneycontrol.com/columns/insurance/hidden-treasure-postal-life-insurance-/15452/0

    1. ANIRBAN says:

      pLEASE MANSIH IS IT TRUE?

      1. Yes I think PLI should be better than LIC in terms of returns

        1. ANIRBAN says:

          But if you consider PLI Vs Term insurance+Stock/mutual fund then which one is better? Share your view Manish.

  354. amit says:

    Hi Manish,

    Dont know if this is the right thread to be asking this question, but i needed information on disability insurance in India. Are there policies for this that also cover disability that is not resultant from accidents ?

    Regards

    Amit

    1. NO amit

      All the disability insurance is only for accidental disabilities .. No policy in my knowledge which is there for “any” kind of disability .

      Manish

  355. Abhinav Gulechha says:

    Hi Manish

    Just stumbled upon this post of yours while checking some info on LIC products. Thanks its very useful, as all your posts are!

    One pain area for financial planners is that despite calculating and showing the low IRRs in the product, client does not want to stop investments in the policy. When it comes to LIC, all the talk of inflation adjusted returns etc. comes to a stop!..guess thats the brand LIC is! However, guess its important to educate client on these aspects. One good way is detailed cash flow table (comparing investment in LIC product vis a vis long term MFs)….

    Regards
    Abhinav

    1. Abhinav

      People get what they really really want in life .. so be it 🙂

      Manish

  356. Gnanesh V says:

    I have been an investor over last 24 years in Gold, stocks, mutual funds, insurance and real estate. Every investment has its benefits and disadvantages.
    I am typically bored to see so many queries on LIC policies and the author of this blog, like God, dictates you guys to stop paying the policies, take term insurance and invest in Mutual funds.
    He treats readers as herd. Ya, we were slaves under the British rule, still slaves to white coloured people, foreign goods, foreign brand junk food, etc. I agree that you and me have believed the LIC agents and trusted our money with the Institution which has over 10 Lakh crore corpus, managed for over 55 years.
    You may get returns of 5-7% from LIC. Ok. Today you guys trust this author and surrender or stop paying your policies, invest in mutual funds. Say after 7-10 years if you find that some Harshad Mehta like scam, or Lehman Brother scam or some thing comes up. Will this fellow be there to blog and suggest you to go where.
    Another Swamiji will come and tell you, hey guys mutual funds are all goofups… Now get invested Govt co. say LIC or SBI… what will you do. Surrender all your Mutual Funds for a loss and turn back to safer avenues and curse this Guy.
    Dear Investors… Please be prudent. Don’t believe in any body. Every one has his personal agenda. Why fall prey to this author’s suggestions and changing your track after paying for 5, 7 or 10 years for your policies.
    Gold was giving historic yield of 2-3 % in 80s and 90s but has given fabulous returns in the last 10 years. People have never stopped investing in Gold. So will you say people who invested in 80s were fools and those who have invested in the 2000-10 were intelligent ones.
    Real Estate has similarly given good returns. But still it is not one way. There are still pockets of real estate not growing as expected. Plus your plot or land has a risk of being grabbed by power houses.
    Have we ever asked this author, which mutual fund to invest, entry point, exit, time frame of investments, his real qualification and experience to give haphazard advises like a novice.
    In India any body can become a miracle Doctor, miracle Guruji, Vasthu consultant, Jothish, or a self-proclaimed Financial Consultant like this Author.
    Discover the truth impatiently. Every investment is good for us. Even if there is a III world war, Gold, you can sell gram by gram and live your life in a crisis situation. All other mutual fund investments will become just papers if there is another scam.
    Think about this. Stock markets have been there for over 100 years. Why just 4-5% of the investment is flowing there. According to this Author all 95% rest investors are fools.
    How many mutual funds are underperforming, how will you select which one to invest. I know a friend who invested his entire gratuity in a particular stock and today that company is non existent. So he holds this piece of paper, with sad memories.
    I never say Don’t go to Mutual Fund. I myself have invested in MFs. But never rely only on one source, else you will repent. Never make the mistake of surrendering or stopping your policy. It is definitely a good investment. I have 6 policies in LIC Jeevan Anand, Endowment and Money back for Rs.18 Lakhs and pay a premium of Rs.96000. I will continue them
    The author of this blog, seems to be confused, biased, misleading and blatantly lying on so many things.

    1. Gnanesh

      Thanks for your views and comments. I agree to you that no one should take some one else words just like that and has to do their own study before arriving at the point . Also regarding scams and all .. it can happen any where .. stock markets , LIC , Banks .. agree .. one has to take the call how much risk they want to take and for what and out of that they have to take decisions.

      Keep reading.

      Manish

    2. Gnanesh – To each his own really.
      Instead of all such jugglery between 6 plans if one takes a Term Insurance for the same 20 lacs and pumps the remaining premium of 90,000 in PPF alone the returns will be astronomical. Even putting them in a Bank FD or PPF will yield better returns (even after tax). I wonder why one would want to complicate things so much.
      The long term return on Stock market in the US cutting across World War 1, WWII, Cuban Missile crisis, Gulf War and the 100s of other economic/political crises is ~ 5%. Remember that Long term inflation in US is 2% so long term stock market return is 3%. The long term return on Gold is a mere 1.5% over 100+ years not even beating inflation. [India growth will provide 8-10% real growth + inflation of 7-8% = 15-18% growth in stock market expected over 1-2 decades]
      Real estate is so illiquid and there is so much sentiment attached in selling property. A plot of land is always susceptible to encroachment. House is a good investment nevertheless.
      And let me correct you – Lehman Brothers going down is NOT A SCAM. They had working capital problems and the creditors were unwilling to lend any more. Lehman Brothers in its entirety has been taken over by Barclays Capital. Stock markets in India have been reasonably functional only since late seventies and I would say the creation of SEBI in 1992 really ushered in a new era. Considering that 80% of our income is agriculture oriented and 60% people are living in rural areas it is very obvious that the participation in stock markets is very low. No one called the people not invested in the stock markets as fools – it is just an attempt to educate them as well.
      If you have been investing for 24 years I am sure you know the rates returned by PPF, NSC and FDs in late eighties and early nineties. It was close to 12%. You have to ask yourself why are LIC Endowment plans returning a meager 5%-6% if you took plans that long ago?!
      In today’s world how long will 18 lacs support a family after the insured dies? For people with such income a Term cover for about 50 lacs or 1 crore and a no-brainer-investment called PPF alone will beat the low yield endowment plans manifold. The theory is simple my friend: If someone manages money we need to pay them. IF LIC invests only in Debt (Bank FDs, Company FDs etc.) for endowment plans and pays its employees salary and incurs operational costs obviously they have to return lesser than a simple debt instrument like FD. I think that much everyone will understand and appreciate.
      Stocks are not magic boxes to put money and multiply. For every 1 company that go kaput 3 of them provide sub optimal return (still same as debt), 15 of them provide returns beating debt, 8 of them beating the debt and index returns by a large margin and 3 of them provide astronomical returns that puts one in the path of wealth creation. The statistics are there for one to see. If one’s experience in the market is bad it does not mean that the market is bad. I am sure your friend acted on a ‘veritable TIP’ received from someone with no understanding of the underlying business. I don’t know whether I need to pity your friend or empathize on losing money. One bad experience with the market does not make the market itself bad.
      Again – I don’t think this website is a distributor of products which means I don’t see any conflict of interest or personal agenda.
      I agree FULLY with one thing you said though: ‘But never rely only on one source, else you will repent.’. This is ABSOLUTELY RIGHT. Asset allocation will determine the final corpus created. Thumb rule for debt allocation -– your age. As indicated Debt MUST be part of everyone’s portfolio indeed. However there are better avenues to park Debt – PPF, EPF/VPF, Tax free Bonds, Short term Debt funds and even Bank FDs etc. Bank FDs are last of the lot as they are tax inefficient for the highest income group – A Bank FD at long term return of 8% even after 30% tax will yield 5.6% – as much as an endowment plan.

      Why complicate life and risk leaving little for your loving family?

  357. Giri says:

    forgot to mention, Rs 31667 premium, 5,00,000 is Insured amount.

  358. Giri says:

    Man! this is real good info. Now I feel surrendering my policy. only problem is I don’t even know much of my policy details.

    I have Jeevan Shree (T151). I bought it in 2003, 16 yrs premiums to be paid. http://www.equitymaster.com/licindia/jshree.asp shows Rs 70/1000 Guaranteed Addition. not sure how much will be my surrender value??

    can you guide me?

    1. Giri

      If its a old policy with Rs 70 as GA , it might be a good idea to continue !

  359. Vijay says:

    Can we take LIC policy- Jeenvan Saral without any Agent from LIC office.
    If yes/No, there is no need to give agent Commission LIC premium, if taken from LIC Office?

  360. Hitesh says:

    Dear Manish and Jago Investor Readers,
    I got this following quote of lic policies on mail. When i did the irr calculation for it, it comes to 10% (i have taken premium as 60024 p.a and maturity value as Rs 1, 65, 78,887 as per quote). Also tax savings and insurance are added advantage. personally i had not received an irr of more than 5-6% from my lic policies till now. So i wonder if its real or just a number game to attract people.
    The wordings of calculations are as below

    “Get Rs 1, 65, 78,887/= from LIC by just paying Rs 5002/= per Month.

    Get Rs 67, 66,869/= from LIC by just paying Rs 2042/= per Month.

    Get Rs 8, 45,859/= from LIC by just paying Rs 255/= per Month.

    Features of the Plan

    Get insured for 250 times of the monthly premium from day one.

    Premium amount same at any age of entry from 12 to 60 years.

    Maximum Age of Maturity is 70 Years.

    Mode: Yearly, Half-yearly, Quarterly, Monthly-ECS

    Advances available after payment of 3 years premiums

    Partial Withdrawal Facility Available from 4th year onwards

    illustration for 25yrs Male with premium commitment of Rs 5002/= per Month for 35 years as on 01/02/2012.

    Get Insured for Rs 12,50,000 on day one and the amount keeps on increasing every year up to Rs 1, 57, 25,416.00 on Maturity.

    Maximum Risk Cover (Normal) 1, 57, 25,416.00

    Maximum Risk Cover (Accident) 1, 69, 50,416.00

    Premium Paid 21, 00,840.00

    Less Tax Saved @ 33% 7, 14,070.00

    Net Premium Paid 13, 86,770.00
    (Thirteen Lac Eighty Six Thousand Seventy Only)

    Return (01/02/2047) 1, 65, 78,887.00
    (One Crore Sixty Five Lac Seventy Eight Thousand Eight Hundred Eighty Seven)

    (Maturity + Loyalty Addition + Survival Benefit)”

    Regards,

    Hitesh

    1. Hitesh says:

      I inquired about the policy name which shall give such returns. They mentioned it as jeevan saral.

    2. HItesh

      I had asked you clearly to ask it on Forum : jagoinvestor.com/forum

      1. Hitesh says:

        oops, sorry for that. I will put it on forum.

        Hitesh

        1. I say that because its something which needs community knowledge and the people are more active there .

          Manish

  361. Priya says:

    Hi,

    My name is priya. My dob is 03-Aug-1985. I would like to invest on some polices. I am confused which one to choose. Please explain me which one will be good among the following:

    I want to pay 60,000 premium per year. I would like to invest for 21 years. I need returns of 25,00,000 at the end of premium.

    So Please suggest me what will be the returns if I take Jeevan Anand and EPF.

    Is there any other best plans to take it?

    1. Priya

      Do not look at anything which has “policy” . Better just invest in mutual fund through SIP …

  362. sanjeev says:

    Hi Manish,
    Thanks for the great article. I took a LIC Jeevan Anand policy on Feb 18, 2011 with a SA of 25L. I paid a premium of 1,32,156 and my second payment is due in few days. From reading this article, I understand I made a wrong choice. Should I just quit this policy and stop making further payments? thx, sanjeev

    1. Yes Sanjeev

      Better not make other payments and use further premiums wisely

      Manish

  363. M.Muralikrishnan says:

    THANK U SIR

  364. M.Muralikrishnan says:

    Do any term insurance gives for whole life cover. one of my freind told term insurances are coverd upto 20 to 25 years?

    1. No , most of the term plans only cover for a limited tenure and thats what it should do , why does one want to get covered till his death ? What is the rational behind that ?

      It can only happen in case of endowment and moneyback plans (traditional plan) because there is huge premium and one can afford to pay back the whole life plan out of it .

  365. Satish says:

    Hello Manish

    Thanks for your reply,

    I have paid only only 1 premium of 52000 , if i forget the policy , i would loss my 52000 , right?

    now i want to invest this 52000 in mutual funds and PPF so it better option, please suggest and which mutual fund can i invest for next 15 years for better return (” above 10%).
    I have alrady Register for Jagoinvestor Paid Workshops in city Naisk , waiting for reply .

    1. Arvind Hatkar says:

      Hi Satish
      are u from Nasik, Mahatashtra. When is this Jagoinvestor Paid Workshops in Nasik please let me know.

      1. Satish says:

        Hi Arvind
        Yes i am from Nasik, I have registor for Jagoinvestor Paid Workshops in Nasik but still i didnt get any reply from Jagoinvestor.com
        Once i got any reply i will commounicate to you ,if you got any info for same please let me know.

        1. Satish

          We have not planned anything in Nasik as of now . we will contact once its planned .. for now we have just collected the data

  366. Satish says:

    Hi Manish
    Very good article , Now my eyes are open and i want to surrender my policy .
    In month of July 2011 i had taken Jeevan Tarang policy , Half yearly premium is 52000,
    SA is 20 lakh, and after 20 years i will get 21 lakh.

    Still date i have paid only one Premium i.e 52000.

    Now i dont want to pay more premium, what is your suggestion ,

    should I surrender this policy now or should I surrender after 3 years, kindly advice

    1. Satish

      Better forget the policy and let your money grow , there is no use of surrendering after 3 payments , you will be in deeper loss in that case

  367. Bhushan Bagul says:

    Hi Manish,

    One of my friend is holding LIC policy of 12.5 Lacs SA “Jeevan Saral” or “Jeevan Tarang” as I am not sure. But he pays 60K annual premium and will continue to pay for 20 years. When he took policy LIC mentioned him return of 26 Lacs upon maturity. Now my question is that will he really get this much return? How much return one do you think?

    1. Hasan AbbasZaidy says:

      Hi Manish Sir
      Your research work on LIC policies are tremendous,you made very simple the complicated equations about the returns of LIC policies.It is very difficult to understand when the details of returns explained by LIC agents.The equations looks very attractive at the time of purchasing the policies. you have made it so simple to understand and learn because the inflation of money is a matter of keen observation and the general people never understand this factor.
      Very nice article

      Thanks

      1. Good to know that you liked it .. keep reading

    2. Bhushan

      No , he will not get that much ,because in LIC policies are returns are never sure .. it all depends on the bonus declared , this maturity amount of 26 lacs is based on assumptions only and might not be true ..

      He will not get more than 3-5% of returns over long term

      Manish

  368. Arvind Hatkar says:

    Hi Manish
    I have prepared Excel Worksheet for Jeevan Saral and PPF, I would like to upload it for others who don’t know what it returns. I will mail it to you, please check it whether it it correct or not and then please upload it.
    Also those who want to surrander Jeevan Saral but not compleated three years, I think it will be the best if they pay for three years and then surrender.
    Arvind

    1. Arvind

      I will look at the calculator 🙂

  369. M.Muralikrishnan says:

    sir pls reply for my previous mail dated Jan 27th 2012

  370. Piyush says:

    Another good article from JI. Apart from the usual miselling in the name of tax saving, getting money back from insurance etc., another way in which LIC policies are often missold is on the basis of past returns as being shown as guaranteed future returns. Now we all know how equity market rallied in the last decade and how interest rates used to be high in the past. Expecting the same to keep on continuing in the future is like driving by looking into the rear-view mirror which can only lead to crashes.

    Further, given the high premium charges at LIC, even a term insurance taken from them seems to be a rip-off. A 30 lacs term insurance from LIC for a 27 year old costs close to 9500 while a 1-crore online term insurance from Aviva Life costs around 7400 for the same person. Of course, its difficult to explain to people that term insurance is a commodity and that probably all insurance companies may be taking reinsurance from the same company. As long as everyone is honest in the policy form and knows how and where to complain in case of claim rejection on flimsy grounds, it shouldn’t matter from which company the claim has been taken.

    1. Yea Piyush

      I agree with your points … Misselling stating past performance is a common problem , not just of LIC but even other insurers

      Manish

  371. sudhank says:

    Started reading these blogs only few days back……and getting new thing to learn every time i visit this site. this refund amount i really didn’t know that on surrendering they exclude first year premium and consider only 30-40% of the premium paid. It is another thing that private companies are also offering on almost similar terms and conditions. I am in job from just 4 years but in very starting i realized that these policies are nothing but liabilities and not so lucrative as it seems in first impression. Personally i prefer FD’s . Can you please guide for health policy ?

    1. Sudhank

      Yea .. these policies label “secured” on them and it appears good to many of those who cant think in detail . Good to know that you figured out that these are not for you

      Manish

    2. Sunil date says:

      How are you comparing Insurance with FD ? These are two different products.

  372. Chandrakanth says:

    I have taken LIC endowment policies (4 nos., each 5 lacs= 20lacs) in Mar-2008 with a quarterly premium of Rs.25000. I was mis guided by the LIC manager that policy is must in order to avail housing loan.

    I request you to please guide me wheather i have to continue with this policies or i have come out. I discontinued premium payment from Sept-11 and i took a term policy instead.

    I read many of your articles on this but i request a specific reply to my case please….

    1. Chandrakanth

      The policies are not compulsory for housing loan, its just a way to build the pressure .. nothing else .

      Now as you have taken the policy , and paid many premiums , stopping would means loosing a lot of money . But it would be good in long term

      Manish

  373. Uttam Kumar Sen says:

    Insurance is neither a savings nor an investment, it is always better to have insurance coverage only from insurace company.

  374. M.Muralikrishnan says:

    Thanks for your reply manish sir, After your advice i will immediatley stop paying premium for the jeevan saral policy (recently taken). In my previous mail mention i strongly not beleive in mutual funds, because i am conservative investor. so i prefered lic but after reading your article i realized now it is an mistake. Since i paid premiums for more than 3 years i could not able to lose my hard earned money in surrendering, and i agree further continuing will be a loss, But i am taking it as positive “something is better than nothing” atleast my capital invested is secured & will get little returns (5~6%)

    But i am not going to stop with this, after reading your article i planned to invest in PPF -80% & 20% in mutul fund. in such case please suggest some better secured mutual funds.

    Please suggest how much need to be investment portion out of my annual income 779000/=(Monthly expenses -15000, EMI – 30000 PM)

    Thank u very much sir

    1. There is nothing like “secured Mutual funds” , Mutual Funds invest in shares , and they are not secure in “short term” . so in a way .. they are risky , but very ideal from long term point of view .

      If you are not ready to take a lot of risk , that is totally ok , but putting everything in LIC is not ideal , so what you are doing is correct , mix LIC + Mutual funds .

      If you want secured mutual funds, you want debt mutual funds in that case .

      Manish

  375. Surya says:

    Hi Manish,
    I’m totally confused after reading your article. At first, let me appreciate your work eye opener for me. I’ve one question.

    I’ve taken jeevan anand policy in 9thFeb2008, I’ve already paid 4 premiums (4*25000) , next turn on 4thFeb2012.

    I’ve two choices to make feel better.

    Choice1: Can i pay 5th term & surrender at 6th year (9thFeb2013).
    Choice2: Surrender now & invest(25000) in PPF (for tax saving – my employer not providing EPF).

    Which one, can i choose?? Plz answer this one?

    1. It depends that what is your motive ?

      In the first options , you will get around 40% of your premiums paid (excluding your first year premium) , so it means 40% of 1 lac = 40k

      In second option , still you will get around 35% of your 3 premiums (first year it not included) so , it would be 25k and then you will be able to invest your 25k in PPF . now instead of me telling which one is better, why dont you tell me which one makes sense ?

      Manish

      1. Surya says:

        Thanks manish, i should go with 2nd option. Two of my friends doing the same thing, i’ll make them aware of this…Thanks once again…

  376. Arvind Hatkar says:

    Hi Manish
    I have surrendered my three LIC Policies (Two of them Policies completed 7 Years and third one completed 5 years as on JAN 2012), and Received Surrender value of Rs.1,25,000.00.
    Now my questions are
    1) whether This amount is txable?
    2) Should I apply/get tax 80C benifit on the EMIs/Premiums which I have paid during year APRIL2011-JAN2012 for these three policies?

    1. Arvind

      1. As the surrender money has come after 5 yrs , they are NOT taxable .

      2. NO

      Manish

  377. M.Muralikrishnan says:

    Sir please guide me, I am paying premium of 35294/= per year(SA -500000) for Lic policy, so far i payed 123529Rs in 3.5years. In addition to this i recently taken Lic Jeevan saral policy in the month of Jan 2012(First premium payed by agent) and i need to pay from feburary 2012 thru ECS. After i read the article i realized the returns will 6 ~ 7%. My doubt is.. Do lic returns 6~7% any proof or evidence? If it is sure 6 ~ 7% what i need to do whether to continue or stop? or let it go and start investing in PPF. I strongly dont beleive in mutual funds.

    Clarify can i stop the new policy jeevan saral which i need pay 2000/=pm premium(SA -500000) from feburary onwards thru ECS method. Does it possible to stop ECS in bank?

    Please advice how much need to be investment portion out of my annual income 779000/=(Monthly expenses -15000, EMI – 30000 PM)

    1. Murali

      Your agent pays the first premium , so that it attracts you and you feel good about it . There is no harm for your agent as he will get 25% of your first year premium as commission so ,its 25% of 24000 , which is 6,000 , so no issue in paying up 2k out of it to drag you into this policy .

      The policy will give 5-7% returns , no doubt about it , but the returns will depend on the bonus also , but it will be in range of 5-7% , a 5-7% in long run is a recipe of disaster 🙂 . I hope you understand that in todays scenario .

      Better stop the ECS , you can ask your bank to do that , ask customer care ..

      Also can you explain why your strongly dont beleive in mutual funds ?

  378. Hitesh says:

    Hi Manish,

    It’s a very good artical.

    I have purchase Jeevan Anand & till date i have paid 4 premium.

    Now i would like to stop premium. Could you please suggest me that can i pay 5 premium or not & when will i get my paid premium & bonus. Should i cover insurance or not till 21 years of policy.

    1. Hitesh

      You will get all your premiums only at the end of the maturity , if you want to surrender it now , then you will get less ..

      Manish

      1. Hitesh says:

        Thnaks Manish for repaly,

        Should I pay 5 primum than will be get more benifit ? & this policy will cover my insurance till 21 years or it will stop . how much amount it will be cover ?

        LIC Jeevan Anand policy open 19-2-2008 Sum Assured – 3,00,000

        Till date i have paind 4 premium -15,967*4 = 63,868

        Thnaks

        1. Hitesh

          No , you stop it now .. when you surrender a policy , you get 30-40% of the premiums paid ,thats all (exluding the first year premium) , so you can see if it makes sense to pay 5th premium and then surrender or just surrender it right now . Surrender it or paid up , in both cases your insurance will stop, btw, does it really make any difference ? How much is the insurance ?

          Manish

  379. Subramanya Gopal Rao says:

    Dear Sir,
    Thank you for providing the various info hidden behind the terms and conditions,ignorance and habits of customers with regard to insurence policies with regard to health,life insurence,auto etc.
    o I did not find info with regard to accident coverage term insurence in health or terminsurence for specific to senior citizens with my research. I am 59 years plus but not reaced 60. I have one lakh health insurence policy with INdia Assurance with family floater in bangalore. I am not happy with copayment and sublimits and iam aware and 1 lakh is not sufficent(Self+child+adult). I want to renew this and also go for a life long renewable coverage health insurence policy either withmaxbupa or apollo mujnich for 3 lakh. Please respond .
    Thanks
    subramanya

    1. Subramanya

      Then you should buy the policies from Max Bupa .. they have life long renewal .. but now as your age is in 50’s .. just quickly take action and finish off this task

      Manish

  380. Amit says:

    Hi Manish,
    I have a policy jeevan tarang. policy start date 12/2011. i am giving premium of Rs.35735 yearly for 15years term. So how much shall i get after 15 years as sum assured and every year after accumulated period.

    Thanks,
    Amit

  381. Roy says:

    Thanks for your exhaustive, to the point & precise write up.
    I had my queries regarding Lic’s Jevan Saral.
    And I think I have got the ans after reading your replies.

    Thanks & Regards
    Roy

    1. Thanks Roy

      Keep Reading

      Manish

  382. Lost with JeevanTarang says:

    LIC Jeevan Tarang
    Start Date: 28/05/2006
    Sum Assured: 5L
    Frequency : 6281 (Quarterly)
    PremiumTerm: 20 Yrs
    Policy Term: 78 Yrs
    Under Sec 80D, I’ve IT benefit.
    Total Premium = 144463
    Loan of 40K; Now it’s 52000 (Principal+Interest)
    Surrendering is not an option as I would get only 35801.7 (if 30 %) or 47735.6 (if 40%)

    Kindly advise whether to stop and forget the policy or make it a Paid Up Policy? If I make it as paid up (& Stop paying any interest or principal) then the maturity will would be affected with Compounding principal? Please advise.

    1. Better you make it paid up

      Manish

  383. Chendu says:

    Manish

    After closing the policies, is it possible to buy any other LIC product (LIC term plan)?

  384. Chendu says:

    Hi Manish,

    This Site is really superb!!

    2 months back I had taken following LIC policies
    Policy Term SumAssured Premium
    Money back 25 500,000 25,787
    Jeevan Saral 23 250,000 12,010
    Jeevan Annand 21 500,000 25,319

    totally I paid 63116

    I dont want to pay premiums for next two years and move the policies to paidup state.
    Is this impact my CIBIL score??

    I am planning to take term plan, In term plans I have to mention – what are the insurance policies I am having.

    1. I have to mention the above policies
    If I mention. However I am not going to paying any premiums to above policies.
    is this impact the term plan which I am going to buy??

    2. why exactly term plans need the information of previous insurances ??

    1. Chendu

      This is not going to affect your CIBIL in anyway , as this is not about loan payments

      1. If you are not planning to pay any more premiums , then you just close this policies .. you will loose all the money , but it would be a good long decision

      2. In term plan you dont need to mention about these policies if you are discontinuing them

      Manish

  385. Amit says:

    Dear Manish,

    Informative article, thank you.

    Request your advice on this situation. Have a Jeevan Tarang policy in my son’s name in 2006 when he was 2 years old. 5 years premiums from 2006 to 2010 of Rs.72000 annually have been paid. I have not paid this year’s premium since i realised i should not have bought this policy in the first place.

    Should i surrender it or make it paid up ?

    Could you pl explain the arithmetic ? I dont necessarily need any cash liquidity right now, i only want to make the right decision.

    Regards

    Amit

    1. Arvind Hatkar says:

      Amit
      You can go for paid-up ,do not surrender, in surrender case it will return you 30% of Rs.72000 along with bonus component. Please read surrender case in your policy document. Accoring to my knowladge IRR for this policy is in between4.5 % to 5.5%.

      1. Amit says:

        Thanks Arvind

        What happens when i go for paid up ?

        Rgds

        1. Amit

          You get all your paid premiums at the maturity of the policy if you make it PAID up

          Manish

    2. Amit

      You have paid 5 premims = 72k * 5 = 3.6 lacs .. so if you make it paid up , then you will get 3.6 lacs + some bonus accumuilated till now at the end of maturity . however see how much it will be worth at that time ..

      The next option it to make it surrender and you will get around 30-40% of your 4 premiums (first year premium is not taken into consideration) = 4 * 40% * 72k = 1.15 lacs today .. see if you invest this money in a FD or a balanced mutual funds , it might give you higher amount after many years

      Manish

      1. Amit says:

        Manish,

        Thanks.

        But you still recommend that i take either of these two options and not continue with it right ??

        Rgds

        Amit

        1. Amit

          You should surrender it and get out of it .. it will be a big blow , but a better thing considering long term

          Manish

  386. Arvind Hatkar says:

    Dear Manish,
    correction in Policy 5 for Wife Archana is Policy Premium is not Quarterly it is Monthly. Typing mistake.
    Sorry thankyou
    Arvind

  387. Arvind Hatkar says:

    Dear Manish,
    First of all thank you very much for reverting back within no time. I had IRR analysis, and found that the returns are not more than 4% -5.5%
    Please find time to go through following details, and please-please answer five questions at last.
    Details of our policies for Me Arvind-37 Years, and my wife Archana-34 Years, All policies are with DAB Rider.
    We both are working / salaried. Our individual annual income is of Rs 5,00,000, hence total house income is of Rs.10,00,000.
    Our family size is of four. We have two child’s Sneha-6 Year and Mohit-1 Year.
    We have Housing Loan started in 2006; Current EMI is of Rs.8,000, Remaining EMI 160, Principal O/S is around Rs.5,75,000.
    Also we have Car Loan started in 2008; Current EMI is of Rs.5,266, Remaining EMI 34, Principal O/S is around Rs.1,50,000.
    Our average Monthly expenditure is Rs. 19,000, which cannot be reduced.
    We have only following Insurance/Savings till today.
    Policy 1 for self Arvind
    DOC———————————————22/01/2005
    Plan/Name/Term—————————-75/Mony Back/ 20
    Frequency/Installment Amount———Half Yearly/Rs.3,292
    Sum Assured———————————-Rs. 1,00,000
    Acquired Bonus till Today——————Rs. 27,800
    Total Premiums paid till Today————Rs. 46,088
    Any Returns Paid by LIC till Today——–Rs. 20,000 (20%SA)
    Any Expected Returns up to maturity—Rs. 40,000 (20%SA + 20%SA )
    Expected Maturity Amount—————-Rs. 1,21,000 (40%SA+BONUS+FAB)
    Insurance with DAB————————-Rs. 2,00,000

    Policy 2 for both Arvind + Archana
    DOC——————————————22/01/2005
    Plan/Name/Term————————-89/Jeevan Sathi / 16
    Frequency/Installment Amount——Half Yearly/Rs. 5,284
    Sum Assured——————————-Rs. 1,50,000
    Acquired Bonus till Today—————Rs. 47,100
    Total Premiums paid till Today———Rs. 73,976
    Expected Maturity Amount————-Rs. 2,67,450 (SA+BONUS+FAB)
    Insurance with DAB for BOTH———-Rs. 3,00,000

    Policy 3 for Wife Archana
    DOC—————————————— 18/10/2006
    Plan/Name/Term————————- 103/Jeevan Chhaya / 21
    Frequency/Installment Amount—— Quarterly/Rs. 3,975
    Sum Assured——————————- Rs. 3,00,000
    Acquired Bonus till Today——————Rs. 72,000
    Total Premiums paid till Today————Rs. 95,400
    Any Returns Paid by LIC till Today——–Nil
    Any Expected Returns up to maturity– Rs. 2,25,000 (Rs. 75,000 in second last,
    third last, and fourth last year of maturity)
    Expected Maturity Amount————- Rs. 4,07,400 (25%SA+BONUS+FAB)
    Insurance with DAB———————– Rs. 6,00,000

    Policy 4 for for self Arvind
    DOC——————————————28/07/2009
    Plan/Name/Term————————-165/Jeevan Saral / 30
    Frequency/Installment Amount——Monthly/Rs. 4,083
    Sum Assured——————————-Rs. 10,00,000
    Acquired Bonus till Today—————Nil (No BONUS, Loyalty Additions
    after 10 Years)
    Total Premiums paid till Today———Rs. 1,18,407
    Expected Maturity Amount————-Rs. 16,24,160 (Projection Shown to
    be Rs.46,42,011 assuming Rs.1,800 Loyalty Additions )
    Insurance with DAB ——————- Rs. 20,00,000

    Policy 5 for Wife Archana
    DOC——————————————— 18/09/2010
    Plan/Name/Term—————————–103/Jeevan Chhaya / 21
    Frequency/Installment Amount———–Quarterly/Rs.5,525
    Sum Assured———————————–Rs. 12,00,000
    Acquired Bonus till Today——————-Rs. 57,600
    Total Premiums paid till Today————-Rs. 82,875
    Any Returns Paid by LIC till Today———Nil
    Any Expected Returns up to maturity — Rs. 9,00,000 (Rs. 3,00,000 in second last,
    third last, and fourth last year of maturity)
    Expected Maturity Amount—————- Rs. 16,29,600 (25%SA+BONUS+FAB)
    Insurance with DAB———————— Rs. 24,00,000

    Total Insurance for my self Arvind Rs. 25,00,000 and my wife Archana Rs. 33,00,000
    My Questions
    1. Whether to surrender or paid-up the policy/s
    2. How much should be individual Term Insurance
    3. Should we first repay all Housing Loan and Car Loan and then think of investment (Savings), or start investment side by side.
    4. Suggest me 100% risk free investment scheme/s according to your knowledge, so that I will increase knowledge in that type of investment.
    5. If you do not have time, suggest me any financial consultant in Nasik(Maharashtra), but he/she should not be agent of any insurance company

    Thanks Regards

    1. Arvind

      Assuming you did a correct IRR

      1. Make them PAID Up if you dont need money right now

      2. Use calculator at https://www.jagoinvestor.com/calculators/html/Insurance-Calculator.html

      3. Side by Side

      4. PPF , Bank FD

      5. Aditya Karnik is one guy at Nasik who can help you (with fees) . I will email you his id

      Manish

  388. Arvind Hatkar says:

    Dear Manish Chauhan
    I was reading “Understanding your LIC Policies” on http://www.jagoinvestor.com from last 11hours and trying to understand about Policies particularly LIC Policies. I have six questions.
    1) After how many years one can stop paying policy premium from the DOC and the policy will become paid-up policy? Does it mean that one should pay at least three years and then if he/she stops paying premium then only policy will become paid-up policy?

    2) Once the policy become paid up let us say after 6 years, premium paid during 6 years is Rs. 95,400 and Bonus Rs.72,000, whether my bonus will increase per year up to maturity -in turn my maturity amount will increase, OR I will get Rs. 95,400+Rs.72,000=Rs. 167400 at maturity let us say after 21 years term

    3) Once the policy become paid up let us say after 6 years, whether my insurance cover will be there which is which that policy?

    4) I read somewhere that possible lone on any LIC policy is somewhat less than surrender value of that policy? Is it correct? If correct how much less than surrender value?

    5) What is the meaning of lapsed policy? If one is not paying installment (premium), you said policy will become paid-up policy. Then, when the policy will become lapsed?

    6) How is SBI Life – Swadhan Term Insurance Plan? This plan Guaranteed refund basic premium paid on Survival at the end of the term if the term is 10 years.

    1. Arvind

      1. Its 3 yrs . Only after 3 yrs , the policy can be either made paid up or be surrendered . Before 3 yrs if you stop, you loose everything

      2. You will get your Paid Premiums + Bonus accumulated ONLY at maturity , it will not increase or decrease . Its FUTURE Value , not current values .. Just because its FUTURE Value , thats the reason that when you surrender the policy. its CURRENT value is calculated as per LIC conditions and then you get less value

      3. No , it will stop after 1 yrs of making the policy paid up

      4. Its 90% of the Surrender value

      5. Yes the meaning of Lapsed policy was that the insurance premium will stop on the policy and all the benefit of a LIVE policy will not be available, the policy becomes lapse and paid up at the same time if you have paid premium for minimum 3 yrs

      6. Its CRAP , the term plan which gives back premium at the end is doing nothing but taking the extra premium from you compared to a normal term plan and then putting it in some investment product at their end in a way that you can get back the same amount invested at the end , Its nothing but playing with the psychology of those people who want something out of thier investments , nothing else . Find out how much you can get if you just go for a plain term plan and invest the difference on your own somewhere ..

      Manish

  389. Srinivas Y says:

    This is very informative article. I believe that there are certain LIC policies that can provide Rs. 75 bonus for 1000 SA plus provide insurance coverage. They work well compared to the fluctuations in Interest rates. Once the growth bubble of India bursts (being largely a dependent economy and GDP component from services growing), in long run the interest rates becomes comparable with west. In US, I have never heard of anything more than 1 to 1.5% interest rate on CDs or debt instruments and IRR above 4% is almost impossible.

    So I would recommend investors do some more reading, do their own math and invest their hard earned money instead of jumping to conclusions. Interesting observation is, there is a yard stick to measure and conclude on non-ulip LIC policies, but ULIP policies of majority of insurance companies are hopeless. Close to 8-12% of ULIP investment will go into various administrative charges and to get returns of atleast 8.5% the ULIP need to perform at a 20% of IRR which is difficult even in a SIP (you can do a trending of historical returns of leading SIPs from Moneycontrol using simple excel)

    Disclosure: I am not an agent for any company. BTW I like Manish’s articles and you can read about his view points on Tarang :-).

    1. Srinivas

      Which policies are you talking about ? I agree that some policies might have given a 75 per 1000 kind of bonus , but for how long ? and for how many years ? If 75 per 1000 is a possibility , then 30 is also a possibility .

      Another point is that one has to look at these policies from liquidity point of view .. ask a person holding a LIC policy how much he gets back in case of some emergencies ? thats the real problem .

      Manish

  390. Kannan says:

    Thanks Manish, It was an eye opener for me. I am in a situation where i have taken a Jeevan Chaya ( Child Policy ) Where in i have paid a premium of 55000 for two years now. Third Premium is due next March 2012, I do think i have made a mistake investing on this policy. Pls advice if i need to continue with it or shall i close it even if its a loss of 1 lakh, considering i could save the future investments in MF or other investments.

    1. Kannan

      Stopping now or stopping after paying 3rd premium would be almost same … Better not do it and stick with this policy . better continue with MF now .. do a simple exercise of comparision in case you continue this and if you put money money in MF , see what happens after 20 yrs

      Manish

  391. Pulkit

    You always have an option to read the policy document or read about it on internet .. you can always say “NO”

    Manish

  392. pulkit says:

    When you don’t know inside out about the policy. Whatever agent gonna tell you, person would buy only that. But ultimately we have been made fool.. we are only responsible. I started reading this blog after taking policy.

  393. Pulkit says:

    Hello Everyone,

    I wanted to know if i surrender my ‘Jeevan Anand’ LIC policy for which i have given only 1 premium till now or 25k. and invest my other premium in some other funds or policies. will it be better?? I got to know if i surrender i would get nothing in return so i just want to know from you can i also change my LIC policy to some other LIC policy (except jeevan anand) in any case so that my premium can be utilised ??

    1. Pulkit

      You will not get anything back if you stop right now .. Talk to LIC agent on converting the policy

      Manish

      1. Pulkit says:

        I have asked my agent to stop my application wherever it is because 1st premium of 25k has been given to them by 21Dec’11 only. And now wanted to change my policy to ‘Jeevan Amulya’.
        Lets see what happen now.

        Also thanks for making me aware about the different policies from your posts. These agents actually force people to get these Endowment plans. In my case, same thing happened. I asked him about term policies twice. First time he ignored and second time agent said these policy are not worth ‘Aap yehi karaiye’. And i was trapped by him. But now after reading from jagoinvester.com, i got to know that this policy is not a good one comparable to other.
        So all of you who are here. Be cautious from these agents. They always will try to sell you only those policy in which they can have maximum commission. So make your decision wisely in order to have maximum return/benifits.

        1. Pulkit

          I am interested to know about “These agents actually force people to get these Endowment plans.” . How do these agents do that ? Ultimately whom do you consider responsible for buying bad products – agents or you yourself ? SACH KA SAMNA !

          Manish

  394. Muneswar says:

    Hi Manish,

    I understand insurance is an expense and not an investment. One should go for pure term insurance and should have mutual funds, stocks, gold, debt instruments etc (% to be invested in increasing order) for good returns.

    I have used IRR formula; below is my analysis. Please correct me if I am wrong on the below analysis
    1. If I deposit Rs.50000 every year for 25 years in a bank FD and assuming the interest rate as 8.75% pa cumulative every year, IRR is coming to around 6%.

    2. If I go for paying Rs.50000 every year for 25 years in LIC Jeevan Anand policy for SA Rs.1250000 and assuming it would pay at least 3 times on maturity, IRR is coming to around 7.5%.

    So I see a difference in IRR and it means LIC Jeevan Anand pays more than bank FDs. Another point is that returns on bank FDs are taxable, it could be even less. So would it be nice to have LIC in portfolio, may be as a debt & safe instrument? I will anyway invest my rest of the savings in other categories of the portfolio.

    Your thoughts?

    Thanks,
    -Muneswar

    1. Muneshwar

      There are two issues .

      1. The IRR in first case is wrong , the IRR would be 8.75% only .. IRR is same as what yearly return you have got . How did you get 6% ?

      2. In LIC , the assumption of 3 times maturity amount right not be true , how did you assume that ? Generally its SA + Bonus is what you get at maturity , and bounus would be around Rs 40-50 for per 1000 insurured , which is 50k per year or 12.5 lacs in 25 yrs, which would be around 2 times of SA in total .. I have not checked the IRR for second policy .

      Note that its not just the final amount that you should see . What about liquidity ? If you want to break your FD after 2 yr , 5 yr or 10 yrs , then how does your FD and LIC policy compares , please see that you will see the real difference

      Manish

      1. Muneswar says:

        Hi Manish,

        Thanks for your comments.

        I used IRR formula in excel as suggested somewhere on jagoinvestor.

        I heard recently that there is no TDS on interest earned in recurring fixed deposits. Is that true?

        Thanks & Regards,
        -Muneswar

  395. Krishna

    You will get your premiiums paid at the end of the 15th year , you can see how much you are getting as return using IRR : https://www.jagoinvestor.com/2011/02/calculate-insurance-policies-returns-video.html

  396. Krishna says:

    Hey Manish,

    I have Jeevan Anand premium 5936/ per quarter. I have paid premium for 3 years of 15 yrs tenure. I have stopped paying premium last year and it is paid up policy now.
    Is it a good decision?. Or should I consider surrendering it.

    Krishna

  397. Najiya says:

    Hi,
    I am holding a Jeevan Saral(plan 165) policy and I would like to surrender it.
    I started that in may 2007.
    Will I be having any loss if I surrender it after May 2011?
    and what would be the approx money that I will be getting if I surrender?
    The money I pay is 22969 Quarterly.
    Thanks

    1. Najiya

      The best numbers you can get from your agent or LIC cc only , but you can expect less than 50% of what you have paid

      Manish

      1. Najiya says:

        Hi Manish,
        Thank you for the reply.
        Please let me know if I can get the amount without penalty if I surrender it after may 2012(By that time I will complete 5 years).

        -Najiya

        1. Even after 5 yrs, its tough to get your money 100% .. You will get around 40% of your 4 premiums ,which is just 32-35% of your money + Some bonus

          Manish

  398. Sougato Pal says:

    HI Manish
    Last year I purchased an Lic Jevan anand policy(T no.149) for an SA 8,20,000. I paid 40,479 pa as premium. After reading your blog I am confused.I have paid only first year premium till now.What shall be the best option for me now. Shall I stopped paying the premium now and loose 40 k. I am not able to make up my mind.Please advice me.I am 25 years old now.

    BTW what is CAGR and IRR and how to calculate the same.

    1. Sougato

      Yes you should stop this policy and restart your financial life again . Go with SIP in mutual funds … Also for CAGR and IRR , see this : https://www.jagoinvestor.com/2011/02/calculate-insurance-policies-returns-video.html

      https://www.jagoinvestor.com/2009/05/video-post-on-basic-formula.html

      1. Shankar Ramasundaram says:

        Hi Manish,
        I have taken a LIC Jeevan Rekha (T No. 152) on Jan 2004 for Rs. 3 Lakhs (Half-Yearly Premium – Rs. 11396). I have paid the premium till 2011 and also I got Rs. 30000 (10% of SA) in the Jan 2009.

        Please suggest me whether I should
        (i) surrender
        (ii) make it paid up

        Cheers, Shankar

        1. Shankar

          you should make it paid up

          Manish

  399. sameeran boruah says:

    questionaire of comparison between jiban anand and jiban tarang policy of lic???
    please help me to solve this

    1. Sameeran

      What exactly you need to compare , please give detail

      Manish

  400. Kishore says:

    Valuable info.

    My uncle has a policy. I think he paid 2 premiums, after that he did not pay and the policy is lapsed. He died (accident) 3 years after the policy lapse.

    Will he get any money back ?

    1. Kishore

      NO , why will he get anything back ? the policy is lapsed , so everything is lost now

      Manish

  401. sandip deshmukh says:

    Truly informative , Thanx for sharing valuable information

  402. sandip deshmukh says:

    Thanx for sharing valuable information

  403. tintu says:

    i would like to invest in LIC market plus .i want to know compare to mutual funds LIC market plus is good.kindly tell me is there any advantages and disadvantages of LIC market plus over mutual funds.

    1. Tintu

      LIC market plus has not given performance as “promised” … better go with mutual funds

      Manish

  404. sweety says:

    my age is 23 and took lic jeevan saral of annual payment of 60,000INR for 20 years and wanted to know did i took a correct decision in investing in it and need a suggestion on which policy to invest on a person of age 12 years to secure his life. thanks in advance.

    1. Sweety , no you made a wrong decision

      When did you buy it ? and why do you want to insure life of a 12 yr old ? Why ? reason ?

      1. sweety says:

        Hi Manish ,
        1) I bought it in augusst 2011 .. can you please validate your statement why my decision was a wrong decision…??
        2)about that 12 year kid is i would like to take a policy just to insure his life and even as a
        investment purpose for his education plan….

        1. Sweety

          The reason I said you made wrong decision , because overall its not a long term product .. it will give you around 5-6% returns overall in long term and its not a good product from liquidity points of view .. ask your agent what will happen if you want to get your money back in 2012 , 2013 , 2014 and so on ..

          Why do you want to insure the life of your child ? What is the logic behind it ? Who will get affected “Financially” if he is not around ? Its you or your husband who has to take insurance , so that you child;s financial interest is covered .

          Take a term plan and just invest in Mutual funds for long terms ..

          Manish

          1. sweety says:

            Thank you Manish for your quick reply.. will definitely talk to the agent….

            Can you please suggest a good company to invest in mutual funds.. as i have a zero knowledge on mutual fund investment.

  405. Ashish says:

    Dear All members… I found this blog recently while surfing the net. I appreciate the work done by the administrator. But, what I personally think that he is bit confused between INSURANCE and INVESTMENT. Almost every article i have read reflects only about the return that a LIC policy will give…Not a single article tells about about the miracle a LIC policy can give…Let me elaborate a little…

    ADVANTAGES OF LIC LIFE INSURANCE

    Life Insurance has no comparison with any other investment. Many people think that life insurance is an investment or a means of saving. This is not a correct view. When a person saves, the amount of funds available at any time is equal to the amount of money set aside in the past, plus interest. This is so in a FD in bank, in NSC, in MF and all other saving instruments. If the money is invested in buying shares and stocks, there is the risk of the money being lost in the fluctuations of the stock market. Even if there is no loss, the available money at any time is the amount invested plus appreciation. People even invest in real estate. It can be a good avenue for returns but, only till the time you are not in the need to sell it. Once the need arises the appreciation coverts into devaluation. In life insurance, however, the fund available is not the total of the savings already made (premiums paid), but the amount one wished to have at the end of the savings period (which is next 20 or 30 years). The final fund is secured from the very first day. One is paying for it later, out of savings. In life, only insurance is purchased for unseen.

    It creates an estate immediately the policy commences (on payment of only a small installment), for the amount the man decides to save over a period of 15, 20 or 25 years. Thus, even if the person is not fortunate enough to live 15 or 20 years, his family is paid the full amount which the breadwinner had planned to save – although he had saved only a small portion of it. This is the miracle of Life Insurance.

    Likewise, if a person is disabled due to an accident, the payment of all future premiums is waived subject to certain conditions and yet the full sum assured is paid at maturity or at death if earlier.

    Life Insurance also overcomes every one of the weaknesses which makes it difficult for a man to save steadily and regularly over along period of time.

    The steadily increasing savings, which the man has invested regularly in a life insurance policy will also be available to him for meeting an emergency, such as unemployment (him or his children’s), loss in business etc, and help him to tide over or even a major financial crisis. The life insurance policy provides for the grant of a loan, based on his savings, to meet such needs.

    No parent would mind any sacrifice to give a good start in life to their children – a sound college education for their children and in particular, a suitable happy marriage for the daughters, irrespective of whether the breadwinner lives to see the fulfillment of this dream or not. But the desires by themselves will mean nothing unless they are backed up by a logical action, i.e., a savings plan which will produce the required amount when need arises. These provisions would be necessary, whether the breadwinner is alive or not. No other plan of saving is as good as life insurance, to provide for the various HUMAN NEEDS which confront a family at various stages of life.

    One more risk that human life faces is living too long that is old age. In this modern era everyone is not so fortunate enough to get children so much dependable. Even, if they are dependable why to count on them, when we can ourselves arrange for it. So it is a provision to live in old age with honor and dignity without being dependent on their children.

    OTHER ADVANTAGES

     The title to the policy moneys can be easily transferred to a dependant (by nomination or assignment);
     The moneys payable under a policy which is assigned cannot be attached by a creditor;
     The life insurance premiums are eligible for relief in income tax and capital gains;
     The policy moneys are full-proof against loss by theft, fire or fraud; and
     In the event of unfortunate death, the settlement is easy. The heirs can collect the moneys quickly because of the facility of nomination and assignment.

    So buy a life insurance policy today and secure the future of your family and loved ones.

    @ Nothing personal with the members … Just a awakening…

    1. samrat roy says:

      Dear Ashish,
      a small question to start with, as you have written, “ADVANTAGES OF LIC LIFE INSURANCE”, are they provided by LIC only? Please reply, as it is very important.
      Anyway, this Forum never ever denies the fact what wonder can a Life Insurance product do in an unforeseen event. But as you have very rightly pointed out, “Many people think that life insurance is an investment or a means of saving. This is not a correct view”, so the Investment part (though Saving & Investment are never the same) should be kept away very consciously, right? Then why not go for a TERM Insurance and put your Saving or Investment into different Tools? And trust me, this Forum tries to suggest that only. Looks like you yourself have mixed things up, (dont worry, I am an independent Blogger only, and do not get paid for supporting Anybody).
      You said, “The final fund is secured from the very first day”, does that mean Life Insurance provides with a Fixed/Secured/Guaranteed Return? NO, IT DOES NOT. Dont misguide, please.
      What most you can say that it is a Composite Tool. And as we, the Indians, are not very good at managing our Funds in a Disciplined way, it might serve the Purpose (though not fully).
      One last question, have you yourself ever put those two things (Insurance and Saving/Investment) apart while pitching to a Prospect? I guess no.
      Sorry, if my comments irk you, nothing personal.

      1. ASHISH says:

        @ Dear Samrat Ji…I’m glad dat u took the pain to read the entire comment…First of all why I used the name of LIC was becoz I found almost 85 percent of queries related to LIC policies…Further, I’m also just a blogger and neither (like u) I get paid for supporting or writing for anybody…
        In my entire comment i nowhere wrote that Life Insurance policy iz an instrument of investment…I would suggest u to read it once more…
        What I wrote is that “In life insurance, however, the fund available is not the total of the savings already made (premiums paid), but the amount one wished to have at the end of the savings period (which is next 20 or 30 years). The final fund is secured from the very first day. One is paying for it later, out of savings. It creates an estate immediately the policy commences (on payment of only a small installment), for the amount the man decides to save over a period of 15, 20 or 25 years.
        Thus, even if the person is not fortunate enough to live 15 or 20 years, his family is paid the full amount which the breadwinner had planned to save – although he had saved only a small portion of it.”
        I NOWHERE USED THE TERMS : Fixed/Secured/Guaranteed Return

        What I am talking about is the amount a person wishes to accumulate at the end of certain period whether he is fortunate enough to survive…

    2. Ashish

      What ever is written is true for LIC policies and even pvt endowment polices. . Which part did you feel that one is trying to discourage people from investing in LIC policis ,its telling them how it works , thats all … people can take their own decision after that .

      Manish

  406. L Thomas says:

    Whats your take on HDFC’s sampoorna samriddhi plan.. Looking at it from an investment point of view, it looks too good to be true.

  407. Ravi says:

    LIC policies rules table mentioned at the begining of the article.. is it same across all endowment plans?? like accrued bonus is given after 5 yrs only and FAV after 15 yrs

    1. Ravi

      Yes , thats correct !, untill and unless mentioned in the policy document , which is not there generally

      Manish

  408. neet says:

    Hi Manish, I have been trying to calculate the IRR of the lic policies I have but when i put the values and then the formula for IRR , I get the error #div/0 !.I have already tried using the help feature but I am still not able to resolve the issue. can you help?

    1. Neet

      Some of the figures may have issues or invalid , can you share the numbers

      Manish

  409. Giri N. T. says:

    dear manish, I have 2 money back policies purchased in 2006. Now I wish to surrender them. The primium is very high (10000/-yearly) and sum assured is very low.. will it be ok to surrender them? 2ndly, I have started SIPs since last 2 yrs in 5 mutual funds. 1.DSP BR Top 100,HDFC Top 200,Hdfc pru. Relince banking and Relince reg. saving. Whether I shopuld continue these SIPs? Pl. advise me

    1. Giri

      The surrender is always painful in short term and good for long term . Why do you want to stop SIP ?

      Manish

  410. D.Jain says:

    Dearest Manishji,
    I m going to receive rs. 875000/- from LIC . I want to invest with a time span of 8-10 years. Should i invest it in FD’s(9.50%), Shares (not gr8 knowledge), Mutual Funds or LIC term policy.
    I have Jeevan Shree policy (15yrs) . i have already paid the whole amount in two installments 600000/-. Sum assured Rs.900000/-. Table 112. what would be my maturity amount.

    1. D. Jain

      You should invest in Balanced funds for long term ,. that would give you good returns with some risk .

      The maturity value you can find out from the LIC website .. you can expect around 5-7% in LIC policy

      Manish

      1. D.Jain says:

        Sir,
        I should invest in Balanced funds for long term ,. that would give me good returns with some risk . Sir please name them.

        Can I invest in Hdfc Top 200, Hdfc Equity,Dspml Equity,Dspml top 100.
        Should I invest the whole amount(Rs. 875000) together in Mutual funds or just SIP .

        Waiting for ur reply . Thank u sir.

        1. D Jain

          Some balanced funds are HDFC Prudence, DSP Balanced .

          The funds you mentioned are all pure equity funds and are more risky

          Manish

          1. D.Jain says:

            Thank U sir.

          2. Byju says:

            When I check the NAV of some of the MFs it seems already they are at a high of 100.0 . Is it wise to invest in these funds or find out some new fund whose NAV is at present low?

            1. Byju

              High NAV does not mean anything .. Its a wrong concept that high NAV MF is costly , its not like that

              Manish

  411. aarya says:

    hello manish,
    please reply me on my query dated on 10th September.

    regds,
    aarya

  412. ClickInsurance.co.in says:

    LIC has been the pioneer in Indian Insurance sector. For many Indians, life insurance truely implies LIC. Therefore, education about their products is of immense importance to every Indian. The private insurers are doing their bit to create awareness about life insurance.

    1. sunil Date says:

      @ClickInsurance.co.in Your web page starts with the heading “Insurance Guide for Tax Savings and more” and the first line of the information starts with “Tax Savings is among the key reasons why one may buy an Insurance product.” Your article does mention about adequate insurance but the stress is on the Tax saving aspect.

      I beg to disagree and I feel we are doing a great disservice to the individuals by stressing the tax saving aspect. If tax saving is the only objective there are other products with lesser lock in and possibility of better returns.

      If you delve into the history of insurance in Inida, LIC had a monopoly and the model selected by LIC was marketing through part time agents. These agents did not have adequate training then, and did not have time & skills to go into the insurance needs of their clients and to convince them. Therefore the Tax saving aspect and subsequent return of premium became the primary reasons to buy insurance. The 80C limit became the deciding factor for arriving at the premium limit and the Sum assured was never the consideration.

      We, the financial planners / Insurance agents should stress on the need for transfer of risk by having adequate insurance (Life, Disability, hospitalisation, critical illness, property, and liability) irrespective of the tax benefits; tax benefit is a incidental benefit / bonus and should NEVER be the primary / main objective. It should be a consideration only when other factors are similar between investment alternatives.

      1. ClickInsurance.co.in says:

        Hi Sunil,

        You have brought out a very important point here. The trend that we studied among middle class policy takers is that there is a great jump in demand for insurance products during the end of financial year for tax benefits from Section 80C. This is a gross misuse of insurance.

        Thanks

  413. Hitesh says:

    Hi Manish,

    I have prepared a sheet of all my endowment and mooney back policies with their current detailed status. Out of 7 i am able to decide on 5 of them either to surrender them or make it paidup. For the remaing 2 i need your suggestion whether i can decrease the loss.
    i will just mail u that sheet for your reference. please let me know your comment.

    Thanks,

    Hitesh

  414. lokesh says:

    manish,
    i am just done with insurance of 25 lacs from Indiafirst online at a reasonable pricing. but i was just surprised to see few questions which i want to share:

    Question at the time of online form filling: “””Have you smoked more than 5 Cigarettes or Beedies or had 3 Pouches of Gutka or Chewable Tobacco per day or had Alcohol/liquor exceeding 90ml or 3 Pegs of Hard Liquor or 2 Glasses of Beer/ Wine per week. Do you in any form or have you ever suffered from drug or alcohol addiction or have been advised by a doctor to reduce your alcohol / tobacco consumption & do you consume any drugs or narcotics not prescribed by the Doctor?””””

    Question as printed in policy:
    1.Do you consume any form of alcohol?
    2. Have you smoked or used any form of tobacco in the past 12 months? If yes, please indicate in which form.

    I simply answered NO at the time of online policy purchase, but when it got printed, i was surprised to see NO in questions mentioned above which is not true, as i do drink and smoke sometimes.

    what do you say about this?

    1. Lokesh

      I think you mean , you put “YES” in the form , but its written “NO” in the physical copy . Please communicate with the Insurnace company to get this clear .

      Manish

      1. sunil Date says:

        @lokesh You have replied NO to specific questions but what has been printed is a general question. I suggest that you send a written communication to the Insurance Co ( with submission proof eg registered letter or ack from local office). Mention the questions as seen at the site and your answer and also mention your understanding that the printed document is in consonance with the questions mentioned at the site. This way, even if they do not reply, your answer to the original answer will override the printed question.

        1. lokesh says:

          manish, i answered ”NO” as my answer is “NO” to the question shown on website while questions printed in policy are totally different in meaning. (please see both questions)
          Sunil
          i have communicated the same to insurance co. through email, the same is happened on question of medical history.
          what’s the logic behind this type of miscommunication? i am afraid of online insurance policy now.

          1. sunil Date says:

            @lokesh – By showing your printed Email copy it cannot be proved that you had indeed sent it. I feel a sent Email can be generated w/o actually sending it. ( mabe IT gurus can correct me & be able to prove that a mail was sent. My loigc states that when a person receives a mail it can be traced back to originating computer but tracing forward unless an auto / acknowledgement is received ?? doubtfull !)

            Why this has happened ? its not a question limited to online policy. Its a question of apathy, of tendency to not to empathise, of tendency to handle issues superfluously and not going into depth. This is my general observation of the modern day administrative and management practices. Others may accuse me of ‘old man rantings’ but it is true. If the company has serious desires to improve then your observations will be taken note of and corrective action will be taken.

            1. lokesh says:

              Sunil, actually policy is not yet accepted by Indiafirst, as i got a call from them that they have received my email and will update the policy documents accordingly and this will require manual underwriting also.
              so, i am still waiting!!!
              this is a serious issue not only with indiafirst but also with metlife.
              last month, i refused to take policy with metlife due to same point, i answered their question as “Yes” asking “if you had consumed alcohol/tobaco in last 3 years” as i consume alcohol but not tobaco while pdf copy of proposal form is showing “Tobaco-Yes Type-Pipe”
              when did i fill this information? when i asked them, they told me that this is system issue and i have to send letter in writing. i withdrawn the policy immediately on this response.

            2. sunil Date says:

              @Lokesh You seem to have a lot of experience on on-line policies. Gr8 it adds to our knowledge.
              If Indiafirst has not yet accepted your proposal what is the printed question you are refering to ? Can you update me on the sequence of events and the media ? sunil.date@gmail.com)

              PS – The “PIPE” part is really hilarious. I could not stop laughing.

            3. lokesh says:

              actually i was referring to pdf copy (sorry, i said printed) of the proposal after online submission and payment. i am sending you the part of the both policies (pdf format) to your email id.

      2. krishna says:

        i am new a lic agent have done only 3 polices.
        whenever i go to my division officer (DO) he himself put no in these types of question even i always inform about the alcohol or tobacoo habbits of clients.
        Besides him other DO too.
        So i think it will not create any problem to you.

        1. Obviously it will . Why do you feel it will not create any problem !

  415. aarya says:

    hi manish,
    just today sometime before i have sent you e- mail, but i thought that i have not provide you enough information.

    so i am providing again complete information in tabular form. sorry for that.
    i have following lic policies on the name of my husband( dob -15/04/1970) and he is the only earning member of our family.

    NAME, DOC MATURITY SA PREMIUM DATE

    MONEY BACK MARCH 2005 MARCH 2025 6 ,00,000
    WITH PROFIT
    (40,000)

    JEEVAN DEC 2006 DEC 2031 2 ,00,000
    ANAND
    (9352)

    JEEVAN DEC 2006 DEC 2032 2 ,00,000
    ANAND
    (9012)

    JEEVAN DEC 2006 DEC 2033 2 ,00,000
    ANAND
    (8740)

    JEEVAN DEC 2006 DEC 2034 2 ,00,000
    ANAND
    (8370)

    JEEVAN DEC 2006 DEC 2035 2 ,50,000
    SAATHI
    (12276)

    JEEVAN DEC 2006 DEC 2036 2 ,50,000
    SAATHI
    (12088 )

    ENDOWMENT JUNE 2011 JUNE 2025 1 ,00,000
    ASSURANCE
    WITH PROFIT
    WITH DOB
    (14400)

    ENDOWMENT JUNE 2011 JUNE 2025 1 ,00,000
    ASSURANCE
    WITH PROFIT
    WITH DOB
    (14400)

    KOMAL APRIL 09 APRIL 2025 1,00,000
    JEEVAN
    (15,200)

    KOMAL APRIL 09 APRIL 2025 1,00,000
    JEEVAN
    (15,200 )

    i have following policies on my name (DOB=21/03/1980)

    NAME, DOC MATURITY SA
    PRIMIUM DATE

    JEEVAN DEC 2006 DEC 2023 2 ,00,000
    ANAND
    (13,612)

    JEEVAN DEC 2006 DEC 2024 2 ,00,000
    ANAND
    (12764)

    JEEVAN DEC 2006 DEC 2026 2 ,00,000
    ANAND
    (11264)

    JEEVAN DEC 2006 DEC 2027 2 ,00,000
    ANAND
    (10591)

    JEEVAN DEC 2006 DEC 2028 2 ,00,000
    ANAND
    (10312)

    JEEVAN DEC 2006 DEC 2029 2 ,00,000
    ANAND
    (9660)

    JEEVAN DEC 2006 DEC 2030 2 ,00,000
    ANAND
    (9212)

    Please suggest me that what should i do with these policies. i want to come out from that and want to take term insurance for my husband only, as he is only the earning member.

    Should i surrender or should i paid up these policies and why ? please help me out as till date we were able to pay the premium of policies . now we want to buy house on home loan so i want to divert that installment to the home loan emis.

    regds,
    Aarya

    1. Aarya

      As suggested , these policies are not going to cater to your long term requirements unless you are ok with 5-7% kind of returns .. So better surrender them or make them paid up

      Manish

      1. aarya says:

        hello manish,

        can any one suggest me that should i go for surrender or paid up ?

        i think paid up will be better.
        please tell me your opinion.

        regds,
        aarya

  416. aarya says:

    hello manish,
    i have been following your website for more than 4-5 months. i really like your content, very knowledgeable and useful too.
    We have taken lic jeevan anand policy from December 2006, on the name of me ( SA-14 lacs) and my husband (SA-8 lacs). we have also jeevan saathi (SA-5 lacs) from Dec 2006.

    my husband has money back policy of SA- 6 lacs from march 2005.
    we have komal jeevan for our both children (SA 1 lacs each) from april 2009.
    we have taken endowment assurance with profit (SA-2 lacs) from june 2011.
    now we are paying almost 2 lacs and 15 thousand annually.
    before coming in contact with your website i was illiterate about these lic policies. now at least i can say i am little bit aware of that.

    i want to stop all these premium and take term insurance for my husband only as he is only the earning member (business) of the family.
    what should i do with these policies? should i do that paid up of surrender ? why?
    please reply me, i will be very grateful to you. please.

    regds,
    mrs Aarya

    1. Mrs Aarya

      You should first take a proper cover with term plan , thats the first thing .. then you should start goal based investing because in long run , these LIC policies will not deliver as much as return as you want . So make them paid up

      Manish

      1. aarya says:

        dear manish,
        thanx.

  417. Asheesh says:

    Hi Manish,
    another excellent post, in series of some excellent post.
    Have a few queries, can you pls suggest…
    a. how does one go about surrendering the LIC policies, is it some legwork to the Lic office;Could not quite find any document on that online…
    b. if the LIC needs some form etc to be filled up for this, are you aware of some online location where these forms can be downloaded from…

    Rgds,
    Asheesh

    1. Asheesh

      You will have to go to LIC office to make the policy surrender . there is no document needed in this ,. just fill a surrender form , that s all .. .you will get it in LIC office itself .

      If you want to make policy paid up , in that case you dont need to do anything .. just stop paying premiums , thats all

      Manish

  418. Vikram says:

    Hi Manish,

    i have taken a pension plan from MNYL – Smart Invest Pension Plus.

    Its a ULIP plan, i’m confused about whether should i continue or opt out?

    I’m holding this for 1 Yr now…

    1. Vikram

      Its called ULPP plan , not ULIP , as this is pension plan ,, the terms and conditions of exit might be different, what are the rules mentioned in the policy documents !

      Manish

    2. Sunil Date says:

      @vikram What was your intention in taking a pension plan ? If it has not changed why do you want to opt out ?

      It is always a better option to build up your retirement corpus in assets which do provide for better returns commensurate with the risk that your tenure will allow you to and also allow you liquidity. But important part is will you be disciplined to continue with the investment regularly and not divert it for some other goal unless it is an extreme emergency. If you are confidant, go ahead; if not better remain in a plan where there will be a compulsory investment and you will not be allowed to divert the funds by succumbing to temptation.

  419. Rahul says:

    Hi Manish,

    With respect my question on September 3, 2011 at 11:46 am, you suggested me to stop first policy and make 2, 3 as paid up. Can you please explain me why should i stop first one instead of making it also paid up. I have already paid 3 year premium. Reason why i am asking so is due to the fact that i have already paid a good amount of Rs 47940 to LIC.

    Please suggest.

    Regards,
    Rahul.

    1. Rahul

      The first policy is suggested to be stopped as its a new policy and the premiums would not yield high returns to you in anycase .. the others have crossed 5 yrs and eligible for bonus also .. so better to make paid up

      Manish

  420. samrat roy says:

    Manish Bhai,
    do you agree with me that we Indians are generally Impulsive Investors? We generally do not put a logic or do cross checking before investing. We invest only because we need to, or because our colleagues do. And, moreover, we are always in hunt for some extra edge, but that remains limited to negotiating commissions, pass backs, gifts or some extra facilities. If that is granted, we become gleeful. But we do not consider that a good product itself do not provide the agents with good commissions, because it is more focussed towards the Customers. Only BAD BAD products give hefty commissions (true for every Financial Product, not only Insurance). So, just stop asking for that edge, instead assure the Representative that if he provides you with a suitable suggestion, you will refer him to your close circle. And, more importantly, do cross checking. Keep only one thing in mind that you are your best Financial Planner if you are able to rationalize things.

    1. lokesh says:

      i tried my best to suggest my good friend for a combination of a term plan with a good mutual fund (HDFC top 200 etc.) but he has recently paid 3rd premium of ULIP. premium Rs 36000/- p.a. cover: 10 times.
      when i asked him why again? his father told that this will help him save some money. i couldn’t comment on this…..

      1. Lokesh

        Hmm… If he is comfortable with ULIP , there is nothing wrong it investing with ULIP .

        Manish

  421. Manickkam says:

    Manish,

    Very informative article. I also have a term plan with LIC and waiting for the e-plan from LIC before adding more.

    1. Manickkam

      Good to hear that 🙂 .

  422. raj says:

    Namaste Deepika & Vishnu,
    I am fully agreed with your comments regarding JI articles. Not only the recent but all the articles are GOD send for us. All the articles are clear, unbiased and very easy to understand.
    Thanks to Manishbhai and his Team.

    1. Raj

      Good to hear that you liked all the articles .. thanks 🙂 . Share it with other friends as well

  423. Vishnu says:

    Hi Manish,

    One of the very good articles in recent times.

  424. Deepika says:

    Hi Manish,

    This is a GOD send article for me. This is as if you read my mind and I am sure for many others too.

    I have a query. Can you please what should I do?

    I took a LIC endowment policy in the year 2004 for Rs. 10 lacs for which I am paying Rs. 42601/- per annum.

    This policy has a term of 25 years but I have to pay premium for 20 years which means the year of last annual premium payment is 2023 by when I would have paid Rs. 8,52,020/- and the year of maturity is 2029 when I will get Rs. 30,35,000/-

    I have already paid premium for 8 years at Rs. 42601/- per annum.

    Can you please let me know if i should at this stage withdraw from this policy or continue as I have already paid a lot of premium over the past 8 years?

    1. Deepika

      The biggest issue here is that you seem to think that you will get 30,35,000 at maturity .. most probably this is the figure given to you by the agent adn not written anywhere in the policy .. Is it ? Please look at your policy document .

      Agent give some numbers based on assumption which generally dont hold true . First get clarity on what all you are getting at end ,.which policy name is this ?

      Manish

      1. Deepika says:

        this is LIC Endowment Policy – table 48-25

        1. Deepika says:

          manish, should i continue with the policy or get out of it? your views will be very helpful.

          1. Deepika

            As I suspected , the amount you were telling is just given by agent .. thats not the real one .. Better you can make the policy paid up

            Manish

            1. Deepika says:

              so i surrender the policy, will i get only around 30%-40% of 7 premiums paid (first year premiums are excluded)?

            2. Deepika

              Not exactly 30-40% , it would be around 40-50% + bonus value in todays terms (accrued bonus some percentage) ..

              Manish

  425. Deepika says:

    Hi Manish,

    This is a GOD send article for me. This is as if you read my mind and I am sure for many others too.

    I have a query. Can you please what should

    I took a LIC endowment policy in the year 2004 for Rs. 10 lacs for which I am paying Rs. 42601/- per annum.

    This policy has a term of 25 years but I have to pay premium for 20 years which means the year of last annual premium payment is 2023 by when I would have paid Rs. 8,52,020/- and the year of maturity is 2029 when I will get Rs. 30,35,000/-

    I have already paid premium for 8 years at Rs. 42601/- per annum.

    Can you please let me know if i should at this stage withdraw from this policy or continue as I have already paid a lot of premium over the past 8 years?

    1. Srinivas says:

      Surrender your policy right now and divert your premium towards Equity Mutual Fund. Do not delay take action now!!

  426. Ganpat says:

    Hi Manish,

    I read in news paper that LIC is coming up with new e-Term Plan, which will be cheaper than the current Term plans. Is it true?

    Thanks
    Ganpat Bagal

    1. Ganpat

      Yes .. thats true .. they will soon launch it !

      Manish

  427. ashish says:

    Hi Manish,

    Excellent stuff at least for novices like me!

    Just need to check if I followed your articles correctly. Also, to find out the ways that people, like me, who have been trapped in this LIC web for tax saving have now.

    My age- 27yrs. I’ve a Jeevan Anand policy (since Dec’ 06) for 30yrs. Annual Premium 30633/-. Primarily, brought for tax savings and result of little financial literacy and having a LIC agent as friend 😐

    After reading your blog, options available with me (did some calculations using your IRR sheet and other calculators, I’m just hoping its correct)

    1. Make it paid-up policy= I get 30633*5 (5yrs premium already paid) + 1,80,000 (Accrued Bonus till date as per LIC portal) at end of 30yrs which means 3% return.

    2. Surrender now = invest surrendered amount in PPF (or other debt instrument @ 8% for next 25yrs , since my left policy term is 25yrs and considering tax saving objective). Current surrender value is 62500 and invested in debt at 8% would give me 4,28,030 at end of 25 yrs.
    If I keep investing remaining premiums (25 in my case) in PPF, I would get 22,37,041.
    Total = 4,28,030 + 22,37,041 implies 6% IRR considering a complete 30yrs duration that I remained invested

    3. Continuing with the policy would mean earning at CAGR of 6-7% (I don’t really understand it convincingly though, since Jeevan Anand would be give 10Lac SA + bonus after 30yrs and again 10Lacs when I die.

    Please corroborate if I am correct, else please correct my calculations. Also, please suggest the best options of the available ones considering I am already in this LIC web for 5 yrs and that my objective was tax saving.

    Many Thanks !!

    Ashish

    1. Ashish

      You calculations seem to be correct mostly .. The main thing you need to change here is your assumptions of returns over 25 yrs .. do you really think for 25 yrs would want to be inveted in pure debt .. Equity is generally reocmmened if one time frame is more than 5 yrs.. so you should be in equity totally for that amount of time and assume a return of 12% .. that would change the whole thing ..

      Also surrendering and investing your money in something else means your money is highly liquid and not stuck in LIC .. suppose you continue in LIC , and after 5 more years you need sudden money , then ?

      And similiarlky suppose you invest the future premims in say MF or FD , then what ? So look at it from liquidity point of view also ..

      The biggest problem here is the illiquidity and low returns .. you never know the future of bonus in LIC ,and at the same time the same is true for PPF returns and equity rerturns .

      Now what is your next move ?
      Manish

      1. ashish says:

        Fair enough.
        But as I said, the idea of investing and getting trapped in these schemes is tax saving avenues. What would be your suggestions for tax saving options in the wake of DTC from next year (no ELSS)?

        1. Ashish

          Let DTC come first .. you never know what more changes are going in there .. so better not to comment there ..

          Manish

  428. Ravi C says:

    Hi Manish,

    I have a query on my Jeevan Sanchay policy. The policy is a 25 yr policy with a yearly premium of 27339. I went to the LIC office for surrender quote. Here are the details:

    1. Policy is effective from 1998 and last premium payment is in 2022. Policy Matures in 2023.
    2. I get 15% money back every five years. I got Rs. 75000 in 2003 and 2008
    3. The paid-up value on the policy is Rs. 62000 and GA for last 12 years at 70 per thousand is 420000. My SA is 5 lakhs.
    4. The surrender rate of the policy is 0.381 and hence the surrender value is Rs 183642 (out of PA+GA)
    5. I thought I can continue the policy till 2013, when I will get Rs. 75,000 as money back. In that case, the GA will be Rs. 5,25,000 and provided the Paid up value remains same and with the same surrender rate I will get Rs. 2,23,647. So I will get Rs. 2,98,647 (SV + MB) in 2013 if I pay for three more years which is 1,15,005 more than what I will get today. But I will be paying 82017 as three years premium for it.
    5. With 13 years to go what do you suggest? Should I continue the policy? Or instead of surrendering the policy should I request the policy to be paid-up?

    Thanks
    Ravi
    Hyderabad, India

    1. Ravi

      The bonus part declared till now is very good considered the general bonus figures .. and provided you have old policy , you can make it just paid up once you get 75k in 2013.. If you are a conservative investor , you might continue it ..

      Manish

  429. Atul says:

    My wife had taken New Jeevan Shree policy in 2003(Table 151). Term is 25 years and premium paying term is 16 years. Since the policy is half way through does it make sense to surrender.

    1. Atul

      You can find out using IRR analsys .. why dont you see what kind of return you will get from the policy if you continue and see what returns you will get if you surrender and use the future premiums in something better . Use this https://www.jagoinvestor.com/2009/08/what-is-irr-and-xirr-and-how-to.html

      1. Nilufer says:

        Hi Manish,

        While trying to calculate IRR for my policies, why am i getting #DIV/0!

        What am i doing wrong here?? the formula is use is =IRR(B2:B16)

        Nilufer

        1. Nilufer

          Is that amount paid in total is less than the amount recieved , if yes, then this might happen , can you let us know the numbers here ?

    2. Atul

      How much is the IRR of the policy ? Did you do it ?

      Manish

  430. Rahul says:

    Hi Manish,

    I am frequent reader of your comments & topics discussed in this forum. I request you to suggest to my query. I have currently three Money back policies running, after reading your articles , I am least interested to continue them and want to invest in PPF or Mutual Funds, I already have 40 Lacs Term plan from LIC, but as i have already paid some premium for some years for these policies, I request you to kindly go through below tables and suggest me , should i continue them or surrender it or make it paid up. In my table i have specified what money back amount i have already got and what i will get in future.

    Kindly suggest.

    Sum Assured 100000
    1.       LIC Jeevan Varsha with Profits without DAB
    Sum Assured =100000.00
    Premium= 15980.00
    Mode = Yearly
    Commencement = 03/2009
    Maturity = 03/2021
    Last Premium = 03/2017

    No. of Years Year Premium Money Back Amount Amount Paid to LIC
    1 2009 15980
    2 2010 15980
    3 2011 15980
    4 2012 15980 10000 63920
    5 2013 15980
    6 2014 15980
    7 2015 15980 20000 47940
    8 2016 15980
    9 2017 15980
    10 2018 15980 30000 31960
    11 2019
    12 2020
    13 2021 40000

    Balance SA 40000
    GA 84000
    24000

    on Death SA+Guaranteed Addtion
    on Death during Last Policy Year = SA+ GA + Loyalty Addtion

    **************** Second Policy *************************

    Sum Assured 101000
    1.       20 Years Money back policy with profits + acc. Benefits.
    Sum Assured = 101000.00
    Premium =6277.00
    Mode = Yearly
    Commencement=02/ 2004
    Maturity=02/2024
    Death before date of maturity — sum assured + vested bonus
    Surviving 5 yrs from commencement — 20% of sum assured
    Surviving 10 yrs from commencement — 20% of sum assured
    Surviving 15 yrs from commencement — 20% of sum assured
    Surviving on the date of maturity — 40% of sum + vested bonus

    No. of Years Year Premium Money Back Amount Amount Paid to LIC
    1 2004 6277
    2 2005 6277
    3 2006 6277
    4 2007 6277
    5 2008 6277
    6 2009 6277 20200 37662
    7 2010 6277
    8 2011 6277
    9 2012 6277
    10 2013 6277
    11 2014 6277 20200 31385
    12 2015 6277
    13 2016 6277
    14 2017 6277
    15 2018 6277
    16 2019 6277 20200 31385
    17 2020 6277
    18 2021 6277
    19 2022 6277
    20 2023 6277
    21 2024 6277 40400 31385
    131817 101000 131817

    ********************** Third Policy ********************************
    Sum Assured 50000
    1.       25 Years New Money back Policy – with Profits.
    Sum Assured = 50000.00
    Premium = 2513.00
    Mode = Yearly
    Commencement =03/2000
    Maturity =03/2025
    Death before date of maturity — sum assured + vested bonus
    Surviving 5 yrs from commencement — 15% of sum assured
    Surviving 10 yrs from commencement — 15% of sum assured
    Surviving 15 yrs from commencement — 15% of sum assured
    Surviving 20 yrs from commencement — 15% of sum assured
    Surviving on the date of maturity — 40% of sum + vested bonus.

    No. of Years Year Premium Money Back Amount Amount Paid to LIC
    1 2000 2513
    2 2001 2513
    3 2002 2513
    4 2003 2513
    5 2004 2513
    6 2005 2513 7500 15078
    7 2006 2513
    8 2007 2513
    9 2008 2513
    10 2009 2513
    11 2010 2513 7500 12565
    12 2011 2513
    13 2012 2513
    14 2013 2513
    15 2014 2513
    16 2015 2513 7500 12565
    17 2016 2513
    18 2017 2513
    19 2018 2513
    20 2019 2513
    21 2020 2513 7500 12565
    22 2021 2513
    23 2022 2513
    24 2023 2513
    25 2024 2513
    26 2025 2513 20000 12565
    65338 50000 65338

    1. Rahul

      you can stop the first policy and make 2,3 as paid up policy . Also do your IRR analysis as tought in this article : https://www.jagoinvestor.com/2009/08/what-is-irr-and-xirr-and-how-to.html

      1. PRAKASHKUMAR .P says:

        Hey why are giving public such a silly ideas. Can you suggest 5 of the Mutual Funds which has gone for last Five years. Any Big Business Mens can have Term Insurance not all the People can have Term Insurance Plans. In Term Insurance Plans what you had paid will never come back to your hand at maturity or survival, the money comes to your nominee only when death takes place for the Life Assured. After premium paying term is over then the Insurance is terminated and no money is given to you. So if you have enough money for savings then go for Term Insurance plans other than traditional plans. I am a Professional Life Insurance Advisor.

        1. Prakash

          You are professional and you are against Term plans ? And you advocate endowment plans ? Can you share which part of this article you dont agree with ?

    2. T S Ashok says:

      Hey how are you getting time to type such long mails?? Great yaar..

  431. Raj says:

    Dear Manishbhai
    Thanks for your quick reply.
    I have- LIC term Plan–10lakhs
    Now going to buy- Kotak e Pre- 25 Lakhs
    After that I shall buy from another Insurance company (SBI Shield)

    Thanks

    1. Raj

      Why do you want 3 term plan .. just go for one more .. take Kotak or SBI , thats it ..

      1. Raja says:

        Hi Manish,

        I too have have gone for 2 policies now and plan to go for another one in future.

        The thought process behind going for 3 different policies in my case is as and when my savings increases with time and i acquire safety net for my family. I would like to discontinue them one by one.
        Whereas if i go for only one policy, it will be a either/or case.

        Regards
        Raja

        1. Raja

          yea .. same thought process is generally there behind the decision

          1. Byju says:

            Could not understand the above. I have 50 lacs cover till the age of 45. presently I am 30 yrs. I have also taken a term policy thinking in the above lines that by 45 years , I should be able to save enough to support the family . But how does taking 2-3 policies help ?

  432. Raj says:

    Dear Manishbhai,
    In 2008, i have purchased jeevan Saral policy Premium Rs.1321/-pm.
    Also buy Insurance plan from Post Office -Postal Life Insurance(central govt.Employees only)for Rs 2600/-pm. Last year when I have read your blog
    I have surrendered above policies having loss of Rs.72000/- but now I am very happy because You save my money.
    Now I have taken Term Plan from LIC of Rs.10Lakh and also want to buy One more from Kotak E preferred for Rs 25 lakhs.
    My portfolio snapshot-
    1. Term Plan of 10 Lakh(+25 Lakh adding )
    2. MF SIP 10000/-per month
    3. PPF -30000/-per year
    4. Emergency fund -50000/-
    5. Gold ETF -01 unit per month
    6. FD in SBI
    I am able to plan this due to your guidance.
    Thanks again.

    1. Raj

      Good to hear that .. congrats .. Are you sure total cover of 35 lacs is enough for you ?

      Manish

      1. T S Ashok says:

        Manish,

        I have purchased lic term plan for 50L cover of 10 years. The premium is very high(11300 INR). I wish to purchase the same from icici i protect or some other on line insurance. But my spouse is telling that please don’t do that. If some thing happens, i can ask the agent for claim. Whereas if you purchase in online, then it will be very tough to claim.. i don’t know how to convince..or is she right???

        1. TS Ashok

          Agent can be helpful in running around at the time of claim ,but it will only happen , if the agent is really close or extremelly professional , I dont thinik that can happen , at the time of need , its known that agents are hardly around , forget at the time of need, they are not around even after some months of selling the policy .

          More than external help, its better that she is clear about the claim process herself and its your responsibility to show her how things work

          Manish

    2. Byju says:

      How do we invest in Gold ETF ?

      1. Byju says:

        Can we sell the Gold ETF at any time ?

      2. Hasan AbbasZaidy says:

        pl Notify me of followup comments via e-mail

  433. Raja says:

    Hi Manish,

    Nice work. But watch out, pranab da might be sending some govt agencies to your house one of these days. Govt needs buyers for it’s bonds and LIC is the man 🙂

    Regards
    Raja

    1. Raja

      Yea .. LIC is really a bit help to govt when it comes to getting debt .

  434. Vivek says:

    Seriously…..We need Sweeping Changes (and not just Cosmetic) in Insurance Landscape. Of all the Insurance products, the only one I like is Term Insurance.

    All other products are not worth a glance (forget about actually buying one).

    I seriously wonder, what does the LIC do with all the money that it collects from Investors, specially Endowment plans. (I bet 10-30% of the premium received is knocked-off towards Agents commission).

    The effective annualized returns from a typical Endow plan is 6% p.a.

    Compare this return on inflation-adjusted calculator, the real returns are negative.

    Where does LIC Channelize/deploy this money. Is LIC so incompetent to earn such shoddy returns.

    Seriously, the IRDA should step-in and see how Insurance companies are channelizing money. IRDA should instruct them to give superior (atleast real inflation-adjusted returns).

    P.S: I would suggest everyone to go only for Term Insurance plans for Life/Risk Cover. Nothing beyond that.

    If you want 8-11% p.a. kind of returns, then go for Bank FD.

    If you want superior returns, allocate some amount (like 10-25%) in Equity, just for enhanced returns.

    Lastly, if this kind of disgusting returns continue in the furture, then it is better IRDA should stop all the products EXCEPT TERM INSURANCE.

    After all, Insurance is to Risk Cover (not a Saving Instrument).

    1. Vivek

      I dont think your wish will come true in next 50 yrs . IRDA is there , but unless there is “Iccha shakti” from govt to do something , it wont improve .. LIC acts like a big reserve of cheap public money.

      The traditional plans are selling today , but it came into existence when our India had only non-risky attitude towards investments .

    2. sunil Date says:

      @vivek – 1 No product is bad or good per say. If it meets your requirment and at a value u perceive, it is good. You have to be clear about what is it you want, ask all the questions before buying and get commitments in writing.
      2 Kindly be aware that in all the traditional plans the investment risk is with the insurance co. They are already accepting your life risk. Would you in their position, not play safe with the money ? Moreover there are IRDA guidelines on the how the money can be invested and Ins co’s have to strictly adhere to that and it is audited by IRDA.
      3 Do you work free for your company, if you are salaried or for your clients, if you are a professional or for your customers, if you are a businessman ? Why are you against the insurance agent getting paid for his service ? If you think it is too much do you think the Sharukhs, Salmans, Sachins, Mahenders deserve such huge sums of money just for endorsing a product ? Why do you buy products endorsed by them and in turn contribute to the crores they earn ?
      4 You say you like only term insurance, then why are you bothered about “disgusting” returns. Risk and return are directly proportional. You cannot have safety and high returns together.
      5 I agree that many products ( not only insurance) are sold either with lies or half truths. But then ‘buyer beware’ is the principle you have to follow. No body has has held a gun to your head and made you purchase a LIC policy.
      PS I am not an LIC agent but I am associated with another insurance co as its agent.

      1. Rahul says:

        Sunil Date

        You agents are parasites ……. simple and clear ……. are u telling me that you never knowingly hid facts or mislead a customer to sell policies ?

        Holding a gun to someone head and make them buy a policy would be a more humane thing to do … atleast he is aware that he is getting ripped off and he can plan his future better …. what you agents do is …. take a person/families future dreams and ruin it for them … do you even consider what happens to these people’s futures ?

        The “Nobody has held a gun to your head and made you purchase a LIC policy.” is a very sick statement to make ……. after you repeatedly call customers, harass them, lie to them and finally when they loose their hard earned money … u pull the “buyer beware” line…

    3. Giri says:

      We all know every one should have cover for his / her life. But when we suggest term policy and say your loved ones will get SA if something happens to your life and the remaining money you can invest in ELSS and other instruments where they get superior returns they say I need to get something back on my policy after maturity (not on death). I’m a complete financial planner (offers MF, life & general insurance, FDs, equities). When I was trying to sell term policy to one of my friend his colleague forced him to demand a money back policy. And the other issues are 1) most of the advisors offer a single product 2) lack of knowledge on both sides (advisors & investors).

  435. J says:

    Hi Manish,

    Thanks for sharing your knowledge….regarding making a policy a paid up. You wrote if we stop paying the premiums, the policy will automatically become Paid up. Then, when will a policy get Lapsed? Are you suggesting that Lapsed = Paid up? Please help me understand the difference. Thanks!

    1. J

      Lapse word is also used for term plan , ULIP’s … and for LIC policies yes, LAPSE would means “no more insurance cover” or you are getting out of the regular contract .

      Manish

  436. Sunil Date says:

    Excellent article, (None of the LIC agents would like it). But to play devils advocate, endowment plans with the longest tenure ( whole life) have their place in a financial plan. If one has to have a debt component in his portfolio, what ever be his age, why not have it in the form of a Long term endowment, which is the cheapest in its category. It would provide insurance cover and debt investment along with associated tax benefits, which are not available to Deposits, Debt Mutual funds etc.

    1. Sunil

      Are you talking about role of whole life plans as a tool for Estate Planning ? Can you give a scenario where it is the suitable thing ?

      Manish

      1. sunil Date says:

        Term plan is cheap but one does not get to participate in the surplus. You must be aware that the Ins co keeps margins for mortality, expenditure, and investment returns. If the experience is favorable the surplus is shared with the policy holders in terms of bonus.

        Whole life plans participate in the surplus (Bonus), can be a estate planning tool, and are the cheapest per SA in the endowment category. In asset allocation they provide the debt exposure. Other features include premium payment term flexibilities, bonus availing flexibilities, Loan, partial withdrawal and surrender. The bonus feature allows it to increase the SA in pace with inflation.

        So all the 3 basic type of plans ( Term, whole life & ULIP) have their own use.

        1. Sunil

          Agreed with your points .. but are those points basis of evaluation for its “goodness” or “badness” . What are the actual returns which are recived by the policy holders .Also for the customers is that the best arrangement possible ?

          My question is “Can we say that for a policy holder , buy whole life term plan is the top most option , cant there be other way round they can achieve same thing ?”

          Manish

          1. sunil Date says:

            @Manish 1 If other plans have their negatives so does Term plan. It is generally available only for a term of 30 years whereas a person may be earning upto age 65 & beyond. Generally the WOP rider is not available in term plans especially in Online plans.

            2 You have yourself mentioned several times that the returns from Endowment is in the 5to7% tax free. If one has to have debt in the portfolio for asset allocation, after PPF, is this not a good option ?

            3 All plans also have some positives and it will be necessary to consider the adequate cover over income earning age, increase in cover over time, affordability, flexibility to withdraw & take loans in case of emergencies (financial stress) etc. None of the plans meet all the requirement hence the need for a insurance portfolio.

            1. Sunil

              Agree that once a person has put money in PPF and other debt products , and still wants to go for more ..there can be some room for these policies .

              Manish

            2. Byju says:

              what is WOP rider ? I have recently purchased a term plan online.

            3. Santosh Prasad says:

              WOP stands for Waiver Of Premium. In some child plans, if the parent who is paying the premium dies, all future premiums are waived off and policy continues.

            4. byju says:

              thx santosh.

            5. kranti says:

              Its available on AEGON-RELIGARE iTERM PLAN.

  437. KRANTIVIR RAJPUT says:

    “Paid up Policy

    A lot of times when you have completed 3 yrs of policy, you might not want to get your money back immediately, in which case you can made your policy paid up (just stop paying premium and it becomes Paid up). When you do this, you can stop paying further premiums but you will get your total premiums paid + accrued bonus any at the end of the maturity period. This might work out better sometimes compared to surrendering if you were going to invest the proceeds in some debt instrument.”

    very good funda (solution)….:)

      1. Byju says:

        In the above situation the choice of “paid up” is good since the investor has already decided to invest in debt instrument. So LIC has already put the money in debt instrument and so he can wait till it matures. But is it so simple “stop paying premium and it becomes paid up”. I am paying endowment premiums to the tune of Rs. 79,620/- per year. Should I intimate LIC that I am going to stop paying premium ?
        I am considering buying a term cover from LIC for Rs. 1500000/-. So if I stop paying the premium in the above policies , then may be LIC will take into consideration the same and may decide against issuing the term policy. Already I have 36 lacs term cover through iCare. But my actual requirement was 50 lacs , the balance was being achieved through the above endowment policies.

        1. Byju

          Yes , you should stop paying LIC premiums and make your policies paid up .. Also there should not be any effect of this on your term plan , better get a term plan and then make your policies paid up

          Manish

  438. Radhey says:

    No wonder all such traditional policies are a mess to understand. Very few retail investors will do the math themselves and as rightly written, the emotional quotient is so huge, that they would rather continue.
    I’d agree that surrendering/making paid-up is a better advantage to have though that is something which many will not anyways do.
    Scintillating article guys…

  439. Akram Chotu says:

    BTW, as per your knowledge, what is the Real Rate of Return per annum or CAGR return on these Insurance Policies? Is it 7% CAGR per annum? Or?

    Please clarify.

    1. Akram

      Depending on the final bonus it would vary .. but these policies will give returns in range of 5-7% .

      Manish

  440. Akram Chotu says:

    Thank you for sharing your Knowledge and Time.

    I learned this the Hard-Way way back in 2006 when I closed my BIRLA SUNLIFE ULIP Life Insurance Policy. To put it simply, I paid Rs. 100 and when I closed the policy after 4 years then I got Rs. 60. From that time onwards I stopped looking at ULIP’s and Insurance Policies and financial things that I did not understand or financial things I am uncomfortable with.

    Sometimes it is best to shut everything and take rest.

    1. Akram

      Many people learn it hard way ., You might have made better returns had you invested in plain FD’s or just kept the cash 🙂

      Manish

  441. Akshay says:

    Hi Manish,

    I am 36 years old & I have just started to read your blog few days before & I found it quite informative for people like me who doesnt know about the financial planning.
    Just want to know your suggestion regarding my Invest plus premier policy (Bajaj allianze) which I took last year in September for 20 years duration at 30000/- premium/year. Should I have to surrender this policy or I have to paid up after completing 3 years?. I have already paid 30000/- in this policy & next due in this september.
    I am planning to take plain term plan of 25 lakhs each from LIC & ICICI (thanks to you & your blogs which helped me to take such decision) + want to increase risk cover in existing accidental policy (As I have to travel extensively in my job). + Still I can invest 15,000/- p.m. (How to plan, need your suggestions.)

    Thanks for help & good work. Keep it up

    1. Akshay

      The policy you are talking about is I guess a ULIP . it works differently , but if you are not very clear about the policy and its usage , better get rid of it .

      Incase you cover by taking another term plan , and also increase your accidental cover , for the investment you can invest in Mutual funds

      Manish

      1. Bhaskar S. M says:

        Hello Manish i have 1 question for you. you are commenting only LIC not any other Insurance Company. Are you any agent of private insurance company. that’s why your trying to spoil LIC. Do you know now a days somany private insurance company cheating to public. but you are not raising the voice for such a cheating company. LIC’s main aim is giving financial security for certain critical time. (eg: death). First thing you dont know why we need insurance.

        1. Bhaskar

          I do not mind telling you that I am just a blogger and we also do planning for people . I am very curious to know why you are so irritated on this article as people have got to know about how LIC works ? Is this article saying anything negative about LIC ? This article just gives the knowledge on different terms and terminologies in LIC policies , at the end, its written a person reading this can now figure out if a policy is suitable for him or not . I searched google and found out that you are an LIC agent selling its policies , I just wonder why you are not happy seeing this information publicly available to everyone , where as the other readers are feeling good about it .

          Why I wrote about LIC only ? Yes I write about LIC only or maximum LIC because you need to understand that when 90 out of 100 indians buy LIC , there should be more articles and knowledge on LIC to be given .

          Also , in the start itself I had written that this article applies to LIC and other private insurers policies . Kindly reply 🙂

          Manish

          1. T S Ashok says:

            Hello Bhaskar,

            I have taken TERM policy from LIC only. But i have surrendered all the endowment & ULIP policies of LIC. Still I believe LIC as it is having good settlement ratio of claims to policy holders. But we need to understand that we should not look LIC policy
            as an investment. Thats all..

            1. bala says:

              Hi Manish,

              Pls accept my big applause to you… good work keep it up

  442. Rakesh says:

    Manish,

    Excellent article. I already made my LIC endowment policy paid-up last year after reading your posts. Keep up the good work.

    Rakesh

    1. Rakesh

      Good to hear that 🙂

      Manish

  443. arjun says:

    My actionmonth log-in does not seem to be working.Could you look into this please,Mr.Manish.

    1. nandish says:

      arjun you must have got a welcome mail the moment you register, try with a different id once again or write me on nandish@jagoinvestor.com.

      Dont get stopped lets see that you are in the action month

    2. Arjun

      You need to ask your questions here itself on this comments section

      Manish

  444. KRANTIVIR RAJPUT says:

    Manish, An Engineer turned Finance-Expert has got great logic to explain Complex terms. Good Work.

  445. Harsha says:

    Awesome article as usual, I dont think even 10% of LIC Policy holders are aware of such information, a must read for every one.

    Thanx,
    Harsha.

    1. nandish says:

      Hey harsha good that you learnt and had clarity when it comes to LIC. If this article would have come 1 year back you would have saved BIG money.

      anyways i am happy you are learning

  446. Ram says:

    Nice article Manish,
    Can you please explain more in which situation making paid up works better than surrendering the policy?
    Let us take an example, say yearly premium is Rs. 10,000/- , paid 5 yrs premium already. The original policy was for 20yrs. Now if the policy is surrendered, the policyholder would get around, say, 50000*(1/3) + some bonus = 20,000/- (approx)

    Now, lets two scenarios,
    i) The policy holder puts this 20K money into PPF for next 15yrs with 8% interest
    ii) The policy holder does not surrender the policy rather makes the policy paid up. He takes the amount at the end of the maturity which is 15yrs away from now.

    Which one would be a better option?

    I have taken PPF instead of FD just to nullify the current tax implications as there is a possibility that the return from all these endowment policy would become taxable after the advent of DTC.

    Another request, can you please write an article on possible implications of DTC?

    1. Ram

      In this case it would make sense to make it Paid up , but I was talking about cases when most of the term has gone and it might make sense to continue it a bit more so that he can get FAB + some loyalty addiitons (sometimes its added in 5 yrs) . So that way his overall returns would not be less (if not more) than surrendering

      Manish

      1. Ram says:

        Hi Manish,

        I think my question (and scenario) was a bit different. Question was to choose from two options when 5yr premium has already been paid out of 20. So next 15 are still remaining.

        i) surrendar the policy and invest whatever u get into PPF for next 15yrs
        or
        ii) make it paid up.

        Which one would be better and how?

        1. Deepa says:

          Great article, an eye opener as usual.
          I am waiting for a reply from Manish since I am in a similar situation.

        2. Ram & Deepa

          This is not that easy situation . You need to do number crunching for both situation and see which one is better from returns and liquidity point

          If you surrender it now , you will get surrender value which you can invest in PPF or MF . Calculate the IRR taking some realistic assumptions .

          Same for paid up .. And see which one has better returns .. Do you know how to do IRR analysis ?

          https://www.jagoinvestor.com/2009/08/what-is-irr-and-xirr-and-how-to.html

          1. Srinivas says:

            Ram & Deepa,

            If the policy term is completed more than 60% (I mean completed 12 years of original 20 years) then better to continue.
            Or else surrender and invest the amount you got in Equity MF.

            This surrender value after (remaining years) in MF is more than end of term returns.

            I have written a detail comment on the same issue some time long in jagoinvestor comments section.

            1. Nilufer says:

              Dear Manish,

              I have 5 money back policies from LIC towards which i pay 70,000/- per annum as premium:

              The oldest Money back policy is dated 2001 for a SA of 2 lacs from which i have received 2 money backs
              The second oldest MB policy is dated 2002 for SA of 2 lacs from which i have received 1 money back
              The third oldest MB is dtd 2003 (SA 2 lacs) from which i have received 1 money back
              The 4th MB is dtd June 2009, (SA of 2 lacs) to which i have paid 3 premiums, and money back
              The 5th MB is dtd Feb 2010, (SA 2 lacs) to which i have recently finished paying 3 premiums, and no money back as yet.

              I wanted to know that if i stop paying further premiums towards all the above money back policies, would i loose out on a lot of monies that i have already paid LIC? If yes, would it be worth it to save on the rest of the premiums by making all the above policies paid up and divert the same towards PPF for the next 12 years?

              Eagerly waiting to hear from you Manish…

            2. Nilufer

              You need to study a bit on all the policies and see how they offer on paid up and surrender and then for each of them see if stopping the premiums and directing your premiums in something else will make more sense or not .

              You will have to do some home work on this .

              But with what I understand and with my experience , it would be better to stop paying premiums and either make your policies paid up or surrender it

  447. Nilesh Patil says:

    HI Manish

    Excellent article, even i was unaware of the first premium being excluded in refund amount calculation…so each day is learning something when i read Jagoinvestor articles !! thanks..

    I have also made all my endowment policies paid up both for me and my wife….and bought a term plan which i did not have earlier….thanks to Jagoinvestor articles…which i hv been reading for past year..

    i need your advice on one of LIC poilicy which was pushed to me earlier – Jeevan Rekha ( T. No – 152) which i have began on 22-3-2003 with 25 yrs as premium paying tenure , in this i pay premium of 7602 for 25 yrs and get back 20000 every five years throughout my life time…i have received once 20000 cheque from LIC and next will be due next year…

    1. Ram says:

      Tum jeo hazaro saal! But lets assume you live till 100yrs and you started this policy when u were 25yrs old. The following is IRR calculation according to me, -ve means cash going out of your pocket…

      Age Cash Flow
      25 -7602
      26 -7602
      27 -7602
      28 -7602
      29 -7602
      30 12398
      31 -7602
      32 -7602
      33 -7602
      34 -7602
      35 12398
      36 -7602
      37 -7602
      38 -7602
      39 -7602
      40 12398
      41 -7602
      42 -7602
      43 -7602
      44 -7602
      45 12398
      46 -7602
      47 -7602
      48 -7602
      49 -7602
      50 12398
      51 0
      52 0
      53 0
      54 0
      55 20000
      56 0
      57 0
      58 0
      59 0
      60 20000
      61 0
      62 0
      63 0
      64 0
      65 20000
      66 0
      67 0
      68 0
      69 0
      70 20000
      71 0
      72 0
      73 0
      74 0
      75 20000
      76 0
      77 0
      78 0
      79 0
      80 20000
      81 0
      82 0
      83 0
      84 0
      85 20000
      86 0
      87 0
      88 0
      89 0
      90 20000
      91 0
      92 0
      93 0
      94 0
      95 20000
      96 0
      97 0
      98 0
      99 0
      100 20000

      IRR= 1.75%

      1. KRANTIVIR RAJPUT says:

        Sau (100) saal ke baad = 1 rupayiya 75 aanna !!! Nice calculation ram.

      2. Ram

        Its not fully correct . you need to factor in things like Bonus , FAB and loyalty additions . That way the returns would be in range of 4-6% (just my assumption)

        Manish

        1. Ram says:

          of course yes! but the same (bonus etc) was not given in the problem statement (original question). So this was just to show how lucrative 20k return from LIC “through-out life” is in reality?

          For most of the people, return of 20k in every five yrs through out life is a big enough trap. Bonus, loyalty etc would be just icing on the cake.

          But reality sucks.

          1. Ram

            ok got your point 🙂

            1. Abhishek says:

              Hi Manish,

              What is the TAX free return on these LIC Policies, especially the endowment traditional plans ?

              Regards
              Abhishek

            2. Abhishek

              it would depend on the bonus declared , but in general the policy returns come around 5-7% in long run

              Manish

            3. Shilpi says:

              Hi Manish,

              I have taken 20 year LIC Jeevan Surabhi policy with cover of 4 lacs where my yearly commitment is 36500/- which means I am investing around 547500/- for 20 years and as per the agent I will get 4 lacs back in 15 years and taking consideration the loyalty+Bonus I will get 330000 more at the end of 20 years so if you consider the policy return it is more than what you are stating plz clarify …….is it good to continue it plz advice.

            4. Shilpi – Why dont you try the calculator here for the IRR?

              http://justgrowmymoney.wordpress.com/downloads/

              Cash outflow is entered as negative and cash inflow is entered as positive. Let us know the IRR you get.

            5. Shilpi says:

              Thanks for showing me the true picture ,the figures are upsetting but now that I have found your portal I am pretty sure that I will surely make a educated financial decision during my life.Thanks and keep up your good work.

      3. jeewan says:

        total missguide kar raha hai ,mr manish .after death or 100yrs he get 2lakh&la

    2. Ram says:

      Age Cash Flow
      25 -7602
      26 -7602
      27 -7602
      28 -7602
      29 -7602
      30 12398
      31 -7602
      32 -7602
      33 -7602
      34 -7602
      35 12398
      36 -7602
      37 -7602
      38 -7602
      39 -7602
      40 12398
      41 -7602
      42 -7602
      43 -7602
      44 -7602
      45 12398
      46 -7602
      47 -7602
      48 -7602
      49 -7602
      50 12398
      51 0
      52 0
      53 0
      54 0
      55 20000
      56 0
      57 0
      58 0
      59 0
      60 20000
      61 0
      62 0
      63 0
      64 0
      65 20000
      66 0
      67 0
      68 0
      69 0
      70 20000
      71 0
      72 0
      73 0
      74 0
      75 20000
      76 0
      77 0
      78 0
      79 0
      80 20000
      81 0
      82 0
      83 0
      84 0
      85 20000
      86 0
      87 0
      88 0
      89 0
      90 20000
      91 0
      92 0
      93 0
      94 0
      95 20000
      96 0
      97 0
      98 0
      99 0
      100 20000

      IRR= 1.75%