Pros/cons of closing LIC 6 installments later

POSTED BY Anand Prakash ON February 24, 2011 11:40 pm COMMENTS (3)

As now i understood the stupidity of conventioanal plans from LIC, i want to close my Jeevan Anand policy. I have put 6 installments of Rs.24907 into it. My agent told me I would get around Rs.1 Lakh if I choose to surrender the policy. Recently, I have bought a term plan from Kotak (sum assured 30 Lakhs). How will it affect when DTC comes into picture?

Should I go ahead with LIC policy closure and invest the amount in NSC/PPF/MFs for long term.

I am highly confused. Pls answer

3 replies on this article “Pros/cons of closing LIC 6 installments later”

  1. Anand Prakash says:

    my sum assured is Rs 5 Lakhs and my premium is Rs.24907. That means is will not be eligible for tax deduction after DTC. What do u recommend. Shld I put in NSC every year of Rs.25000 or PPF of rs.25000?

    Also can i also explore the option of putting into diversified MF or should stick to PPF/NSC.

    1. Anand

      5% of 5 lacs is 25,000 . Your premium is lower that that . Which means that you will be getting the tax benefits

      Manish

  2. ashal jauhari says:

    Dear Anand, the prem. paid by you for your Kotak term plan ‘ll remain eligible for tax benefit in DTC too. For Jeevan Anand, it may not be if the yly prem. not more than 5% of sum assured kept as it is.

    If you opt to surrender your Jeevan Anand policy now & invest the amount in a simple product like PPF or NSC, the final maturity amount ‘ll be more than what you ‘ll get in this policy.

    Thanks

    Ashal

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