POSTED BY March 3, 2014 7:13 pm COMMENTS (16)

ONHello,

Please help me on the below mentioned query

I have purchased a Jeevan Saral. My Annual premium (I pay it every half year a Rs. 30325) is Rs. 60650 and term is 30 years. I have taken this policy in Jan 2008. They told me that I will get around 1,00,00,000.00 after the maturity period of 30 years.

Now my doubt is that,

1. How much can I get approximately after 30 years.?

2. Can I close this policy now?

Regards,

Sreekanth

Dear Sreekanth

I just want you do few calculations yourself.

1. First get to know how much surrender value will you get?

2. How the Loyalty addition is calculated and will there be any FAB if yes how much.

For this better you talk to any LIC adviser and they must be able to tell you exact numbers.

The surrender value can always be checked by them in the system. You just need to tell them the policy number.

Once you get this 2 values. Try to calculate yourself how much you will get in remaining 23 years using the “One time deposit of surrender money for 23 Years” + RD of money (60650/-) for 23 Years”.

This will give you an idea which situation is better for you.

Regards

Arun

Hi Arun & Ashal,

Thanks for your valuable help and suggestions.

Regards,

Sreekanth.

Hi Sreekanth

Can you please let me know what you r going to do?

I am also in same situation and dilema

Please see below link

https://www.jagoinvestor.com/forum/jeevan-saral-surrender-or-do-not-surrender-please-advice

Please contact me at xtremeinfo@yahoo.com or give me your email id to contact you

Regards ,

Kumar

Hello Kumar,

I am going to stop this policy and planning to invest in PPF.

you can contact me at: lanka.sree@gmail.com

Regards,

Sreekanth.

Loyalty addition to this policy is not mentioned exactly anywhere however I could find various references at various places.

At one place till 2013 it is Rs 300/- per 10 years policy per 1000/- Maturity Sum Assured.

At some other place since 2014 it it based on term and annual premium.

Using both I can deduce that this will not be more than 1000/- per 1ooo/- MSA for 30 years policy which means the LA for your policy will be 21,83,600. Hence the maximum returns I see from your policy is just 43,66,000/- If I add some Final Addition Bonus (FAB) to it than also it wont be more than Rs 50 Lacs. Now Total Investment Rs 18,19,500 and return of Rs 50 Lacs means that Compound Annual Growth Rate (CAGR) is little less than 6%.

Now if you surrender this policy and put that amount plus the annual premium of Rs 60650/- for next 23 years in PPF at interest rate of 8.6% or any other investment plan which can give you at least 8.6% tax free returns your money will grow more than Rs 60 Lacs.

Regards

Arun

Hi Arun,

Thanks for your reply.

So, i hope it is better to surrender this policy.

once again thanks for your valuable reply

Regards,

Sreekanth

in 30 years you will be paying Rs 18,19,500/- and the total money which you receive ( assuming annualized return rate of 7% ) will be Rs. 61,30,080/-. @8% it will be Rs 74,20,277/-

And believe me its very hard to get more then 7-8% from these endowment type of policies.

Amount 1 Cr you mentioned is only when returns are 9.53% which are highly not possible.

Regards

Arun

Dear Sreekanth, what’s the Maturity sum assured in your policy?

thanks

Ashal

Hi Ashal,

Thanks for the reply.

The sum assured mentioned in the policy is 12,50,000/-.

Regards,

Sreekanth

Dear Sreekanth, please read my reply again. I’m not asking death sum assured. I’m asking you for Maturity sum assured. Please read your policy papers in detail to get maturity sum assured amount.

Thanks

Ashal

Dear Ashal,

Sorry for the mistake.

Maturity sum assured – 21,83,600.00

Assured Death Benefit – 12,50,000.00

Please let me know.

Regards,

Sreekanth

Dear Sreekanth, the final maturity for you from Jeevan Saral ‘ll a multiple of your MSA. As your MSA is 2183600 Rs. To earn 1Crore Rs. maturity value, the multiplying factor (actual bonus rate in final year) should be 4.58 or 4580 Rs. per thousand MSA. I seriously doubt that LIC ‘ll be able to give such high bonus rate in this policy.

Thanks

Ashal

Hi Ashal,

Thanks for the reply.

So, how much maximum amount can I get after 30 years.?

Will it be between 61,30,080/- and Rs 74,20,277/- as mentioned by Arun.?

in that case, is it a good idea to continue this policy.?

I am planning to surrender this policy after 5 years and open a PPF account for the same amount (5000 per month).

Please suggest me which is the best option.

Regards,

Sreekanth

Dear Sreekanth, if the idea is to drop this policy any how, why not today?

Thanks

Ashal

Hi Ashal,

Actually this was my mistake in statement.

After 5 years in the sense, after the 5th year installment.

I have paid 4 years installments till now.

I think after 5 years i will get max amount.

Regards,

Sreekanth.

Dear Sreekanth, if your calculations indicate that it’s beneficial to surrender after 5Y,do it.

Thanks

Ashal