I know this question is answered several times in Jago Invester form. I have read JagoInvester book and convinced that only term plans are good. Just to clear a doubt I am asking with the data.
my friend has LIC Jevan Anand policy with half yearly premium as Rs.12,713 for term of 20 years with Sum assured amount 5 Lakh. He has completed paying 8 years premium. When we calculated with LIC bonus as Rs.40 per year this gives bonus around 4 lakh for 20ys with SA 5 Lakh. Thus a rough calculation SA + Bonus + FAB would come around max 12 lakhs. Even an RD with 8% for 20yrs with semianual pmt of Rs.12,713 would give the same returns around 12.5 Lakhs. When we were discussing about making it paid up policy, my friend was suggesting both look equivant then why not continue? I would like to check with experts what is the drawback in our thinking or calculation? I agree a good long term MF investment can give as good as 12% which would come around 20.8 Lakh.
Just some additinal info, he has another Term policy in Lic for 10Lakhs and 1 Crore with a private insurence company. So inusurence cover is not an issue.