Any advise to be given about already opted Jeevan Anand Policy from LIC?

POSTED BY Dr.Sachin ON June 11, 2013 12:51 am COMMENTS (14)

Myself 27years old. I have started with an “Endowment policy’ from LIC last year. Its Jeevan Anand. Started last year and two half year premiums of 13,763 each have been paid. (27,526 in total). After reading Jago Investor forum and other online articles, I could realise that it was a big mistake in my finanacial life to start with an ‘endowment policy’ .

So now I have started a pure term plan from another insurance company (50lakhs and Annual premium around 6000) and have also started investing in mutual funds. Now the next premium paying date for my LIC policy is nearing. Im in a dilemma whether to continue with this LIC or not.

Also its not that easy to escape from the LIC agent as he happens to be my uncle. Leave that apart but can anyone here please advise me on what can be done with this LIC policy? I mean is it wise to continue it?

14 replies on this article “Any advise to be given about already opted Jeevan Anand Policy from LIC?”

  1. Dear Dr. Sachin, Please do not expect more than 12%. In fact you may even get lower than this. The most important point, it’s not at all guaranteed.

    thanks

    Ashal

    1. Dr.Sachin says:

      Thanks dear Ashal

  2. Dear Sachin, thanks for the reply. Do not lose heart or feel depressed that you do not know the answer. Fact is you know the answer for yourself which is true for you. Thanks for being honest. Now coming back to your original query, let me twist it. With the same set of investments (Bank FDs, RDs) & MFs, what ‘ll you say if investment term is 10-15Y?

    Here I hope you know the answer again that the impact of Inflation is bigger risk than the loss of capital. So how w’d you plan your 27K Rs. now?

    I never tried to spoon feed the query seekers & try to get the answers from themselves. Some people like this approach & some do not. I do not know in which category you w’d like to put yourself in. 🙂

    Thanks

    Ashal

    1. Dr.Sachin says:

      thanks Ashal,
      Im a newbie. Kindly tell me whats the assured return in mutual funds for a period of 15years.
      Thanks

  3. Anand says:

    Invest half in PPF and rest half in Quantum Long Term Equity Fund.

    1. Dr.Sachin says:

      Thanks

  4. Dear Sachin, please define your risky & safe investment.

    Thanks

    Ashal

    1. Dr.Sachin says:

      Expected this question from dear Ashal. Im sorry to say this.ie.When we define the ‘risk & safe’ dear Ashal will ask another question. Im sorry.
      Anyhow, for a newbie, safe investments are fixed deposits in banks, PPF etc..at which when we go to them, I mean when we got to deposit in bank, they will tell u that we will give this much percentage as interest etc. That is what i meant by safe investment. (This may not be 100% safe for financial experts)
      But when we go to a mutual fund company to invest, they wont and will never assure us that they will give this much return after this much year. That is what is meant by risky investment.
      (btw these definitions may hold true for a newbie in investment field and not for financial experts). Hope dear Ashal can help me now after clearing the definitions.
      Thanks

  5. Dear Dr. Sachin, in simple, please ignore this policy from here onwards. Invest the 27K yly prem. else where to earn better return.

    thanks

    Ashal

    1. Dr.Sachin says:

      Thanks Ashal. Could you pls suggest some mode of investment for this 27k? Half I would like to invest in safe investments and the rest to risky.
      Thanks

  6. Dr.Sachin says:

    Thanks bemoneyaware !

  7. bemoneyaware says:

    If one stops paying the premium, the policy lapses automatically. Do remember,in the first three policy years, you would not receive anything if the policy lapses and all your premiums would be lost.This should be the preferred option if you had bought the insurance policy just 1-2 years ago. You will have to forego the premium paid in the first couple of years, but it is better than continuing with it and compounding the error.
    If three years’ premium has been paid, you can surrender the plan and get some of the money back or make the policy paid up
    Our article
    Insurance : Surrender or Make policy paid up or Continue discusses it in detail.

  8. Dr.Sachin says:

    Thanks FFC,
    Two more doubts.
    1.”To surrender the policy, I should have paid the premiums of first 3 years at least.” Am I correct in my info?
    2. If I stop paying the premium right now itself too, the policy shall be made paid up automatically after 3 years? Or is it like I should have paid at least 2 or 3 years premiums or so?
    Thanks

  9. Since your policy is only one year old best to stop paying premiums and take the loss of 27K

    you could surrender after 3 years but you will still lose this 27K.

    you can make it paid-up after 3 years but the paid-up amt will be given to you only after maturity of the policy.

    So best to take this loss of 27K and stop paying further premiums.

    list your financial goals and see how much you need to save for each goal and focus on that and not on this loss.

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