Suggest on 11 Yrs Old LIC Policy

POSTED BY Chowdary ON August 7, 2013 4:46 pm COMMENTS (6)

I have a LIC Policy (Table No 14) for SI Rs. 500,000 which was bought by my father 11 years back, the duration of the policy is 30 years (19 more years to go, I am currently servicing my 12th year premiums). The policy have accumulated Rs. 290500 as bonus & I am paying Rs. 15076 as premium annually (paid in 4 installments).

I have also availed a loan of Rs. 56000 4 years back and the current outstanding is about 85000 Rs.

I have checked with LIC on this and came to know that the Surrender Value is Rs. 125000  & Paid Up Value is Rs. 187500 if I wish to discontinue this policy.

Right now I am 26 years old.

Could you guys suggest what I should do with this policy? Should I surrender or make it paid up or continue with so that it can serve as part of my debt protfolio?

6 replies on this article “Suggest on 11 Yrs Old LIC Policy”

  1. Ashal Jauhari says:
    August 9, 2013 at 1:31 pm

    Dear Chowdary, surrender the policy. Pay the loan amount from the SV. Invest the remaining amount & future prem. elsewhere. Here I assume you are already having adequate term cover.

    thanks

    Ashal

    Reply
  2. Ashal Jauhari says:
    August 8, 2013 at 4:54 am

    Dear Chowdary, how this 56K loan become 85K? Can you elaborate a bit?

    thanks

    Ashal

    Reply
    1. Chowdary says:
      August 8, 2013 at 11:25 am

      I haven’t paid the interest & here I’ve clubbed it with the principal amount.

      Regards
      Chowdary

      Reply
  3. Biswa Singh says:
    August 7, 2013 at 7:28 pm

    19 year is a long time. Better surrender the money and pay off your loan. LIC plicy does not give good return or good life cover.

    Reply
    1. Chowdary says:
      August 8, 2013 at 11:27 am

      I do have a Term insurance plan which I have bought last year, so insurance part is covered for me. The only worry now should be returns for me.

      Anyways I wish to have some portion of amount in debt, so should I continue with LIC considering it as a debt component of my portfolio or just surrender and proceed the savings to PPF account?

      Regards
      Chowdary

      Reply
      1. Biswa Singh says:
        August 8, 2013 at 12:25 pm

        If you are so concerned about the debt portion then why don’t you invest money in PPF and get 8.7% return than investing in LIC when you get a poor return between 4-7%.

        I had also the similar confusion about LIC policy when I thought of surrendering LIC policy and Ashal replied me “Its better to cut a figure now than to amputate the whole hand after”.

        Reply

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