Life Insurance Policy Closure

POSTED BY yegappan Muthu ON January 25, 2013 10:28 pm COMMENTS (10)

I am 26 years old, I have taken Lic Policy New Bima Gold for 1 Lakh on october 2007 & jeevan Tarang Policy for 1 Lakh on October 2008. For both policies I am paying 9000 INR per annum. After visit your site, I have decided to go for 30 Lakhs Term Insurance. And I check with the surrender value of the present policies, Hence it’s 40% ( 15,000 INR) lesser than my paid premiums. Closing the current policy will be a Good decision?  Can you please suggest me in this issue to keep the lic policy along with Term Insurance or close it now.If to close, tell me  how to close?

10 replies on this article “Life Insurance Policy Closure”

  1. Raj says:

    Hi Muthu,

    I do not think there should be a blanket closure of all LIC policies – this has to be situation dependent. If you can afford to pay the premiums then you may look at doing so. As it is 2 lacs insurance is grossly inadequate if you have dependents, so the term insurance is a good idea.

    Before you do the calculations on MF returns, I would like you to remember that many people investing in them have seen very little returns in the last 5 years. Yes, equities should logically do well in the long term but that is only an assessment not a guarantee.

    Personally, I will favor an approach that is a combination of all investment avenues, the proportions being decided by your situation and risk taking ability.

    Regards
    Raj

    1. yegappan Muthu says:

      Thanks Mr.Raj

  2. Dear Muthu, may i know your family size? Your yly income? Loan liabilities?

    thanks

    Ashal

    1. yegappan Muthu says:

      Hi Ashal,

      Thanks for your interest shown.
      I am Single, Dependant Mother Only ( Planning for marriage after 2 years).
      Loan liabilities Nil.
      Yearly Income 10 Lakhs Per Annum ( Am a NRI – Presently working in Qatar)

      1. Dear Muthu, please purchase a term cover of 1.25Cr. Rs, As you are NRI as of now, not many indian Insurer ‘ll provide you a term cover. Please surrender these existing LIC policies & invest in NRE FD for debt part. Your return ‘ll be far higher than these policies. I case you can take some risk in Eq, MFs investing, please start investing on mly basis into Eq. MFs.

        thanks

        Ashal

        1. yegappan Muthu says:

          Thank you very much Mr.Ashal…. As a NRI, I have to go Offline only… Is it Online also possible????

          1. Dear Muthu, as far as I Know, no online plan is available for NRIs. please check with individual insurers for the same.

            thanks

            Ashal

      2. yegappan Muthu says:

        Thank you… Will surf the net for individual insurers…

  3. Yes. Please surrender the policies after you get term insurance and invest both the premium and surrendered amt in better investments like mfs with PPF to crease a well diversified portfolio

    Please check carefully the insurance amt you need. If you are married and without kids
    you could use this

    http://freefincal.wordpress.com/insurance-calculator-for-the-young/

    If you have children you could use the comprehensive child planner available there.

    How to close please visit the LIC office connected with your policy and close it. You will told about bonuses and how you will loose money. Dont worry about it. You will loose much more by continuing these policies.

    1. yegappan Muthu says:

      Thanks for your valuable reply

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