Confused about LIC Plan.

POSTED BY Vikram Gautam ON July 31, 2013 1:03 pm COMMENTS (12)

Hi,

I am going to enroll with jeevan saral plan of LIC for an amount of 18,000/ Year. But after review of that plan i got confused to proceed. My main concern is to get the maximum return, flexibility for withdraw with Tax benefits. Please suggest me. Is there any other option for me.

 

Thanks…!!!

12 replies on this article “Confused about LIC Plan.”

  1. Vikram Gautam says:

    Dear Ashal,

    Its a predefined chart shown by LIC Agent for jeevan saral. You can also get it from net, it is available to all. Sir plz i am also waiting for the answer of my first question .

  2. Dear Vikarm, how did you come to know with a guarantee that it’s 4.4L Rs. in Jeevan Saral?

    thanks

    Ashal

  3. Vikram Gautam says:

    Hi Friends,
    Thanks to all of you for your valuable feedback.
    After reading many post here i am planing to go for PPF, but still i have some doubt regarding PPF.

    1. What is the correct time for invest in PPF..?
    (As i come to know one year period is calculated from March, So if i invest in the month of August, then i think August to March period will not be calculate..? Do i get any interest for this period? Should i wait for next March..? )

    2. Every one of you said that PPF provide good return than LIC jeevan Saral but here i have some concern…
    (Lets take an example what i get after 15 years…

    (i) if i submit 1000/month or 12000 Yearly

    In PPF – 3.70 Lac In Jeevan Saral – 4.44 Lac

    (ii) if i submit 2000/month or 24000 Yearly

    In PPF – 7.41 Lac In Jeevan Saral – 8.88 Lac

    )

    So now can any one plz describe me how PPF provide good return than LIC policy. πŸ™‚

  4. Dear Viram, as of now do nothing for your money but invest your time in rwading past discussions in the forum. Investing your time here, ‘ll surely do good for you.

    thanks

    Ashal

  5. Gotu says:

    Vikram,

    Further to your 3 point clarification in reply above:

    1. Don’t go for insurance policy for investment purpose:
    You are absolutely right πŸ™‚

    2. Use insurance only for risk cover (Term cover) although you will not get anything if it get matured:
    Again you are right.
    3. For investment and tax saving purpose PPF is best option:
    PPF is one of the best debt instrument, but remember lock in period is 15 yrs. Instead you may go for NSC or Tax saving FD which are locked for 6 and 5 yrs. respectively.
    Dont go for ELSS right now, because it seems like you have no knowledge about MF, ULIP, etc.
    So read, read and read before you go for relatively high risk equity instruments.
    Being late is better than being wrong.

    Let your LIC agent know in “saral” words that you are not interested in the insurance+investment products….. πŸ™‚ All the best.

    Regards,

    Vaibhav….

  6. manickkam says:

    Hi Vikram,

    Check the http://www.licindia.in/term_assurance_001_benefits.htm for getting better details on Anmol Jeevan policy in LIC. This is one of the Term policy available in LIC.

    If you want flexibility to take your money and also save tax on it, its simple not possible. You need to invest your money for atleast a lock-in period of 3 years. PPF has a lock-in period of 15 years and gives a return of 8.8% p.a. You also have the option of saving through tax-saving FDs which have a lock-in period of 5 years.

    If you are willing to take risk and as you have time in your side, its also better to look at ELSS (Equity linked Savings Scheme),a mutual fund scheme, comes with a lock-in period of 3 years.

  7. Vikram Gautam says:

    Thanks Bhavesh and bharat for your valuable knowledge. its really very good knowledge for me.

    The points i got cleared till now :

    1. Don’t go for insurance policy for investment purpose.
    2. Use insurance only for risk cover (Term cover) although you will not get anything if it get matured.
    3. For investment and tax saving purpose PPF is best option.

    So after the analysis i am not going for Jeevan sarl policy(will thing about Term cover plan) as my LIC agent was coming tomorrow for my policy πŸ™‚
    Will keep disturbing you friends ……Thanks for your suggestions. πŸ™‚

  8. Bhavesh Furia says:

    I have assumed that you live with your parents and possibly one more sibling.

    The policy’s term amount should be dependent on your liabilities (the money which you need to pay to someone).

    Just think in this way, if you die after 3 years of buying the policy, will the policy’s amount be sufficient enough for your family’s survival ??

    So suppose, if you have some liability like home-loan, education-loan etc. the policy amount should be sufficient enough to pay that amount.

    Break down it in pieces.
    1) Find out how much is your total monthly expense.
    2) Figure how much you will need in future for same thing assuming inflation @ 10% p.a. for safe side
    3) Add your liabilities amount to it
    4) Any other specific expenses

    So the policy amount should be > (1+2+3+4)

  9. bharat shah says:

    yes, any body having to support the dependents must have life insurance , but that should be pure term insurance policy, which insures at the minimum cost for large sum at fraction of cost than traditional endowment/ulip/wholelife insurance policy, which are insurance +investments plans in a sense ,and return on investment part is very less. better you go through the posts in this forum and articles under ‘life insurance’ on this site and decide how much life insurance you need , and which term insurance you should choose.
    your engineering background is no way obstacle to personal finance knowledge on this site. as a matter of fact, much of the contribution on this site is from persons having variety of background as engineering, medical, physics, maths, technology etc. rather than purely accounts and finance.

  10. Bhavesh Furia says:

    Good to know Vikram that you are concerned about your policy. I can understand your situation very well since my age is almost same as yours (25) and I am also from Engg. background πŸ™‚

    Your LIC agent will always suggest you to buy endowment policy if he knows that you are not aware about financial products, because he will get good commission on selling of ULIP & endowment policies.

    You can a get a really good policy (remember to get only TERM policy and not any other types of policy) within 10K premium per year for term of 35 years which will give you pretty good cover (around 1 Crore).

    But first invest some time to understand meaning of Term policy.

    In term policy you pay premiums for your term period.
    If you die within that period your family gets the money (this is the meaning of insurance).
    If you lived for that period, you don’t get anything.

    Check out Aegon Religare’s Term policy. These days online policies are in much talk since they are cheaper. I don’t know the exact product name since I have not been able to keep updated on it.

    Although this is the right time for you to buy policy, take some time to learn about financial planning. You should buy it only for INSURANCE purpose. It should not be bought for TAX SAVINGS or GETTING GOOD RETURNS purpose.

    For tax savings and getting good returns you can invest money into PPF and Stocks as I said earlier. Check it out, do some research, there are many other options to save tax, but INSURANCE should never be the one.

    You can always post queries on this forum if you are still finding it difficult to plan for your financial matters.

    Thanks.

  11. Vikram Gautam says:

    Hi Bhavesh,
    Thanks for your quick reply.

    I am 27 yr old unmarried guy. As i comes from engineering background, i don’t know much about investment ways, for good response. It would be my first investment so as general there should be atleast one insurance policy for me. As discussed with LIC agent he suggest me jeevan saral for me. I also want to have atleast one LIC police, may be with small premium.
    plz suggest.

  12. Bhavesh Furia says:

    Hi Vikram.

    First of all, Jeevan Saral is Endowment policy which according to me is a strict NO-NO.
    I also made a mistake of buying this policy. Because if you compare the premium and returns of this policy with sum assured, it looks waste.

    You should NEVER and NEVER buy insurance policy (especially ULIPS / endowments) for investment purpose.

    If your risk appetite is higher you can invest some of your money in stocks and you should definitely some in PPF (good returns plus tax benefit).

    I don’t know about any such product for “flexible withdrawing” thing. Maybe some other members can help regarding this.

    It would be much easier if you mention your Age, Family Size, Number of Dependents, Goals etc.

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