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POSTED BY ON June 11, 2014 2:19 pm COMMENTS (2)
Dear Sir,
You are doing an excellent work of advising and educating common people regarding the investment and policies. My query is, I am planning to buy LIC Endowment plan – 817 for my child (age 1 year) with single premium of Rs. 4.2 lacs which will return me around Rs. 16 lacs on maturity of 25 years.
Is this a right plan for my child to gift in long term or any other plans can superimpose this return? I am not a savvy in investment and tracking stocks etc and I have few other policies wherein I have to pay around 1 lac per year therefore I am willing to go for a single premium.
Could you please suggest me whether to go for this LIC Endowment plan or not?
Thank you,
Regards,
Yogesh
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Hi Yogesh,
This plan gives you around 5.7% returns. The value of 16 Lacs after 25 years would be very less.
There are many more other products in market that give you better returns. you can invest in mutual funds. As your investment time is long, there is better scope for good returns in mutual funds. You can create a mix portfolio with Equity and debt funds.
Tracking the funds is not a difficult task. In fact it would be a good learning for you when you start doing it. I would also advice you to pay your other policies till 5 years and make them paid of. None of those policies would give you returns more than 7%.
cheers
Please use ‘XIRR’ function in the excel, and compute the XIRR that you will get for your investment. Let’s discuss then.