POSTED BY February 18, 2011 5:42 pm COMMENTS (3)
ONDear Members
I am having the following LIC policies
Policy |
DOC |
SA |
Premi |
Term |
New Money Back policy |
15.03.2005 |
2,00,000 |
5194/- (Half year) |
25 yrs |
Jeevan Anand |
12.02.2010 |
5,00,000 |
13107/- (half year) |
21 yrs |
New Bima gold (Money back) |
17.07.2010 |
5,00,000 |
17232 (yearly) |
20Yrs |
I am having two dependents and my monthly home take salary is 30,000. After reading several Insurance articles, I decided to surrender/paid up/ just stop paying premium for the above policies. But my friend told me that if i invest the money, which I will get every five years from Money back policies, then one can create long term wealth. So.. Now I am in dilemma… I request the members to give their opinions. Shall I continue with those policies?
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Dear Pavan, From your query it seems that you took all these policy with the classic mistake of every indian person – At the end of the term/maturity there should be a maturity amount from your Insurance policy. In other words you mixed up your insurance & investment needs.
For your just started policies (2010), you may think to stop paying prem. Treat your till date paid prem. as one time loss & purchase adequate term cover for you for your Insurance needs.
For your investment needs you may invest in a long range of products from as simple as PPF to POMIS, Bank FDs, MIP of MFs, Balnced MFs, Diversified Eq. MFs, direct Eq.
Believe it or not – your simple investment in PPF ‘ll fetch you more return than your Jeevan Anand or Bima Gold policy.
Thanks
Ashal
why do you want surrender?. because of financial condition or low returns? pl give details.
Dear Mahajan
Because of their poor returns, ( especially in long terms). i want to surrender these policies and planning to take term policy. thanks for your concern.
Dear Ashal,
Thanks for your reply. yes, i was not knowing other investment options and i was misguided by my relatives. thats why now iam paying Rs. 54,000/- yearly for just Rs.12 lakh sum assured insurance…. Now i am planning to take pure term policy and i will invest remaining money in PPF & Diversified eqiuty funds. Finally i would like to say thanks to this blog for creating financial awareness.