Should i continue these LIC policies?

POSTED BY Annam Pavan Kumar ON February 18, 2011 5:42 pm COMMENTS (3)

Dear 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?

 

3 replies on this article “Should i continue these LIC policies?”

  1. ashal jauhari says:

    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

  2. mahajan says:

    why do you want surrender?. because of financial condition or low returns? pl give details.

    1. Annam Pavan Kumar says:

      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.

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