Need expert advice on my existing insurance policies

POSTED BY Pradeep ON March 24, 2013 7:55 pm COMMENTS (12)

Hi All,

This is my first question in this forum so please excuse me if this is not correct place to ask such questions. For myself and my brother I got a bunch of old LIC policies and wanted to have a relook at all of them to know which ones to continue, which ones to convert to paid up and which ones to surrender. I have given details below. Please enlighten me with expert views on this. I tried doing it myselt but wanted to take others views as well before taking finally call.

Plan/Term Sum Assured  Premium DOC Plan Name
My Plans
178/20 1000000         32,993.00     28/03/2006         Bima Gold
149/22 100000         4,903.00          28/03/2006        Jeevan Anand
149/21 100000         5,185.00          28/03/2006        Jeevan Anand
14/30 125000         3810.00   28/05/2001         Endowment Assurance Policy
My Brothers Policies
178/20 100000         3490.00     28/03/2006 Bima Gold
165/16                               12010.00     28/03/2010  Jeevan Saral
801/8 100000 N/A                      26/04/2010 LIC Wealth Plus-SP
                                       30000.00       03/10/2010         ICICI Pru Lifetime Premier RP
After going through this forum I had to look at this as I dont have any pure term plans above.
Thanks all


12 replies on this article “Need expert advice on my existing insurance policies”

  1. Dear Pradeep, please contact LIC office personally to surrender.



  2. Pradeep says:

    I did my home work and concluded to surrender all my policies as above post-tax return is single digit in all the policies. Now my next question is fairly simple. Do I need to go to LIC office and surrender them or do I need to call my agent and ask him to surrender my policies as due date is heading close.

    Pradeep A

  3. Taking this decision will take about 1 hour, max 2 hours and not more than that. Anyway each policy will have its own grace period.

    Best is you push yourself to a make a decision before 28th.

  4. Pradeep says:

    Thank you Ashal, FFC and Ramesh for taking time and answering my question. I need to take some time and do my home work with these inputs, but I got a question in here 28th this month is last day to pay all my premiums (close to 50K) can I miss this date and take my decision in next few days after crossing the date if so what are the consequences, if not do I need to pay my premiums as I am already late for this year and plan this in coming year? Please advice.

    Again thanks all for your inputs.

    Pradeep A

  5. Dear Sonadhi, let’s try to understand your situation. If you do not stop your policy, after 15-20 years from here onwards, you ‘ll receive say 5L Rs. Now if you stop the policy, surrender it now, invest those 36K in lump sum & the future prem. also for remaining 15-20 Y term, can you earn more than 5L Rs?

    If answer is yes, sure you should surrender. If answer is no, please continue with your policy. As simple as that.



  6. sonadhi says:

    HI Ashal,
    So great of you as u all the time guide all neewcomers like me.I would like to ask if we think of surrendering the LIC poilicies,then they say that the amount we get is less than half of that of the premiums paid so far.for e.g.suppose,I have paid six installments of annual premium of Rs.15000,it becomes 90K.However,if I surrender this moneback policy,I will get only 36K.So this is ultimately loss na?please correct me as I may be wrong.Instead the money which we get back after maturity will be atleast enough with low loss.I believe I am not truly able to explain the things.Thanks to this great forum!

    1. Ramesh says:

      Put the calculations like this:
      1. You continue your policies as they are, and earn 6-7%. OR
      2. You surrender, make the losses real, and put the same premium amount investments in better investments and earn better.

      In either case, the loss of money is there. In the former, those are virtual while in latter they are real. But mathematically, the latter will get you better return. Obviously, you need to invest in better investment instruments rather than putting money in some other form of endowment policies.

  7. Dear Pradeep, w’d you like to amputate a finger today or an arm tomorrow? Choice is yours’.



  8. To decide whether to continue or not have a look at this

    It you want a calculator like this for your case I can make one in a few days and send it to you. Send me an email if you need one.

  9. To choose between paid-up and surrender use this calculator to check for yourself.

    Unless your polices are close to completion (less than 5yrs) there is not point in continuing them
    To decide whether to continue or not I will send you a link in a second post

  10. Pradeep says:

    Thank you Ashal for a quick response but this was the point I was trying to get an expert advice. All my polices are more than 6 years and oldest being more than 10 years. Overall I have invested more than 3 lakhs till now in all these policies. And coming to my brother’s policy he got one for more than 5 years and others more than 2 years. I would like to know if it would be appropriate to make them paid up or surrender. Can you please let me know your view on this point


  11. Dear pradeep, please purchase a term cover of at least 15 times of your yly income + add any loan liabilities in it. After that surrender all these policies & invest the amount into PF, PPF, FDs, MFs based upon your own risk taking abilities.

    Same should be done for your brother also.



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