Tips to avoid traditional LIC policies !!

POSTED BY Phani ON April 5, 2013 5:56 pm COMMENTS (9)


I am regular reader of the Jagoinvestor forum and kudos to you guys for enlightening people on the personal finance.Based on the previous articles posted on the blog,I have decided to never take investment + insurance policies.But my situation is such that my father-in-law is a development officer of LIC and I am being pestered big time to take up those policies 🙂 Even my wife says LIC is a government organization and she is afraid that taking up a term insurance from private players is not correct.Any tips on how to handle this scenario would be greatly appreciated.Please help !!

9 replies on this article “Tips to avoid traditional LIC policies !!”

  1. Dear Ramesh, you were correct on target, Congratulations for ‘waste of money’ thing. 🙂



  2. Dear Phani, please read the reply given by dear Ramesh on 5th april in reply to my thank norte to him & use the ‘waste of money’ thing.

    Are you getting in?

    Please answer a simple question. As you are already visiting this forum, are you aware of term plans or not?



  3. Dear Phani,

    Buying a LIC policy is okay provided it is not the only investment. Suppose you have calculated that some goal requires you to invest 10,000 each month. They buy a policy (any policy your FIL recommends) with a monthly premium of not more than 4000-5000 and invest remaining 6000-5000 in equity MFs.
    The LIC policy can serve as a debt instrument which will give you tax-free returns (5-6%) depending on the type of policy (don’t buy ulips or amulya/anmol jeevan) and duration.

    This way you will satisfy everyone and you have more than decent chance of achieving your goal.

  4. Dear Ramesh, thanks you got the point immediately for 30X multiple.



    1. Ramesh says:

      Lets see how much his father-in-law is powerful!! 30x of annual income is really tough, if not impossible.
      On the other hand, agents or super-agents are programmed to not allow term insurances. With the set-explanations of ‘waste of money’ principle.

  5. Ramesh says:

    Instead of taking the lesser evil of two negative decisions, namely 1. taking a bad LIC endowment policy 2. not taking it and making both father-in-law and wife sour, I would advise a positive decision.
    1. Eg. like Ashal mentioned a 30x term policy. Very nice way.
    2. Opt to first learn and understand the basics, till then defer taking a policy and later on, take the best decision for you and your family. Rushing never helps in any decision.

  6. Tell your father in law that you are into debt which you never told anyone and wish he is could help you with few lacs ! and tell your wife that you wish to make your parents nominee for the policy , they might get busy in their own world for some weeks ! 🙂 .

    No solution to your case, if you just cant say NO to them 🙂


  7. Dear Phani, please purchase LIC’s Amulya Jeevan from LIC at 30 times multiple of your yly income. I’m quoting intentionally 30 times multiple & also not recommending to any usual advice of not opting LIC. Please opt this & update us with your findings. Please stick to 30 times multiple. 🙂



    1. Phani says:

      I have checked with my FIL for term insurance from LIC regarding the 30X of my annual income..Immediately got the reply that ‘term insurance’ is a waste of money..and that I wont get any ‘periodic’ payments..have been advised to take LIC komal jeevan..

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