This is about Jeevan Saral as an investment option instead of NSC/PPF … I discussed with couple of development officers directly to gather such info.. Please read on
W.r.to endowment policies, it is right that 6-6.5% of return, but this policy differs from others that the projected return as 10% compounded because,
1. Loyalty addition applicable ( a kind of bonus ) to policyholders who are holding the plan for 10years and above
2. The plan doesn’t have tax procedures. i.e LIC needs to pay 12.5% service tax + 5% government share on profits, but the profits from this plan are exempted from TAX altogether
3. The corpus of this plan is invested as Loan to industries like TATA and others for @13%
4. The objective is long term i.e 10yrs and above so one can expect good return of around 10% compounded or 8.5% in a worst case..
5. LIC mosted trusted org itself has distributed the brouchers with projected profit as 10% compounded.. And of course return is non taxable !!
Please post your views on these..
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And an article about the policy in Hindu
http://www.hindu.com/2004/03/15/stories/2004031500261800.htm