POSTED BY January 18, 2013 4:56 pm COMMENTS (2)ON
I took an LIC Jeevan Bhima 4 years back for 10 lakhs for a tenure of 16 years. My premium amount was around 49000. After 4 years, I will be getting 15% of the sum assured. That would be 1,50,000/-.
But few days back, I thought 10 lakh covergae is not enough and I went for a pure term insurance from ICICI. It had 1 crore cover for 30 years. The premium amount was around 13000 per year. I know this policy does not provide any survivor benefit. But I have an insurance coverage of 1 crore for 30 years (It was 10 lakhs for 16 years and 5 lakhs for another 8 years by LIC for a hefty premium of 49,000).
If the rest of the money 36000 (49000-13000) is invested in a simple investment options such as PPF, which provides an interest of 8.6%, I could have saved more money than I can get from LIC. If I had paid, 36000 per year (3000 per month) in PPF, after 16 years it should be around 1230552.61/-. If I had gone for more riskier options like equity the returns would be much more( Can expect 15% for 16 year horizon). More than that, I am getting life cover of 1 crore for 30 years from ICICI.
I read there is LOYALTY bonus after 16 years. How do you decide what is the LOYALTY additions? What are the factors deciding this LOYALTY additions? I might get the loyalty bonus, or might not get. It is not assured from what I understand. If the loyatly additions is good, then I think, I might consider going forward with this plan. Otherwise, is it even advisable to go forward with this plan? Please let me know your suggestions.