POSTED BY October 27, 2012 11:43 am COMMENTS (3)ON
I was generally reading up on Jeevan Anand policies and came across a blog written by you. It is by far the most helpful blog that I have come across.
I seek your guidance for my LIC policy as under.
Plan Name: Jeevan Anand
Sum Assured: INR 25.00 Lakhs
Premium: INR 69,770 p.a.
Tenor: 33 years
An indicative (not guaranteed) Bonus Ratio provided by an agent is as follows:
Year 1 to Year 14: Bonus of 45
Year 15 to Year 18: Bonus of 65 – 85
Year 19 – Year 25: Bonus of 100 – 135
Year 26 – Year 33: Bonus of 165 – 195
1. Could you please explain how / why the Bonus shoots up to range from 65 – 195 after 14 years and whether this estimation is conservative or optimistic / realistic??
2. Also, given that PPF returns are better the LIC at the end of 33 years, does it make sense to opt out of the LIC policy?? (i.e. PPF + Term Policy from say an HDFC instead of the Jeevan Anand policy) -> A similar term policy from a HDFC would be for INR 4000-5000.
Look forward to hearing from you.
Thanks a lot for your time and help.
2021 © Jagoinvestor.com All Right Reserved
3 replies on this article “Jeevan Anand versus PPF”
Jeevan anand is a whole life policy
Bonus depends upon company performance – you cannot be so sure about what you get as bonus.
as per my assumption you can expect a Bonus of 4% – 6% ( 40 – 60/1000 of sum assured)
As per my calculation
Total amount paid = 23 lakhs grossly
Total at maturity = 58 lakhs – 74 lakhs
and another 25 lakhs on you death after the policy term.
(Insurance + Tax benefit + Savings)
or second scenario
Investing in any equity based mutual fund for the same 33 years for 60000/years( after taking a term policy of 5000/year)
At maturity at a rate of 10% – 1.5 crores
I have given both the scenario – Choose what you like
And note that if you decide to quit the plan – No premium will be refunded.
Thanks so much for the revert! While I understand the points covered by you, request your opinion on the below:
Could you please explain how / why the Bonus shoots up from 40 – 60 to a new range of 130 – 190 after 14 years and whether this estimation is realistic??
That is was seeking clarity on the other types of bonuses:
Final Addition Bonus
Are these 1-time bonuses or recurring bonuses after a certain number of years?
Apologize for the inconvenience and thanks once again.
Just to add, I have paid only the first premium in the LIC policy….