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POSTED BY ON March 8, 2013 5:05 pm COMMENTS (9)
Hello all,
I am being told by my colleagues that Postal Life Insurance is the best type of Investment option a govt. employee could have. It is being said that one can have their premiums returned by three times more at the time of maturity, if started early.
Previously I had two LIC Endowment Policies which I discontinued after discussing in the blog & reading Manish’s book ‘Jaago Investor’. It was a good decision welcomed by me & my family.
I don’t have any dependents.
My question is “Is PLI is the best Investment option provided by Govt.?”
What are the pros & cons of PLI?
I would be really greatful if anybody answer my query in detail, because I have to face my colleagues on Monday, who think I am a looser as I had already invested in those two useless policies & not in PLI.
Thanks,
Ajita
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I Owned PLI for a Sum of 11lakh insurance for the total premium of 4000 rupees monthly which was 48000 thousand yearly. these policies are EA. Totally bad products. I surrendered all these policies after completion of 3 year and bear a loss of 60% money. but I am happy. I take a Term insurance of 45 lakh premium is 18000 yearly. rest of money 30000 invested in PPF account. Thanks to Jago investor,if i constantly invest 30000 in PPf Account, my corpus will be higher than the PLI return, at the same time I have a insurance thrice than the PLI, So never mix Insurance and Investment, Better go for the Term Insurance. If you need Insurance.
Thanks for your comment Om
For term insurance there ain’t be any sum of returns if u survive till the policy maturity date.
One may say that PLI is the best way of investing. But we can’t be so naive, we’ll need to see from all sides and your income too. As far as I know life insurance from LIC is among the best in the country.
http://www.licpolicystatus.net/LIC-insurance-policy-types.html
Thanks Ashal
@Ramesh & @Free Financial Calculators Thank you both for replying.
I shared my experience with those LIC endowment policies with my colleagues, to aware them actually……………but I was ridiculed and taunted.
I have already opted for PPF. Its a start.
As for them, they prefer PLI over PPF. I am not going to share my thoughts with them…ever.
Dear Ajita, what’s important to you, getting thumbs up from your colleagues for a wrong investment choice or facing them for a right investment choice. It’s not question of proving your friends wrong. it’s the question of your financial life which is at stake.
Just answer me a simple question – if govt. itself is giving you return not more than 8-9% on PPF & PF, how can any other agency (LIC or PLI) can generate higher return by investing only in debt?
thanks
Ashal
I am govt employee myself and I can safely tell you that postal life insurance is a useless product. Just as bad as the LIC policies you got out of.
The sum assured is now fixed at 10 lakhs which is inadequate for most people. Having just come out of two endowment polices you should stay away from this and invest according to your goals.
If you don’t have any dependents you don’t need any kind of insurance. Even pure term life insurance.
The pros and cons of PLI are the same as those of the LIC policies. They are similar products with similar return profiles.
Wish your colleagues good luck, list your goals and invest as mentioned in Manishs book.
ps. My colleagues think I am wasting my time on personal finance too. Who cares!
Is your only aim to be not ridiculed by your colleagues?
Bad choice, in my opinion.
Coming to your query, if you have no dependents, then Do Not have any kind of Insurance, whether LIC or Post Office or anything.
For growth options, choose the proper asset classes and invest in the simplest of the those asset vehicles.
So for debt, opt for simple long term debt mutual funds or PPF.
For equity, opt for simple equity mutual funds.