Hi All, I have taken a whole life plan form LIC and feel like a bad deal. We first need to understand our insurance need. I always suggest all of you a pure term insurance plan. Insurance and investment are altogether different things.
I have a policy Jeevan Anand for 25yrs for 5 lakh sum assured and 21k annual premium. maturity benefit is14 lacks in 25th policy year. Its a real bad deal. Now let us see how- If we separate the insurance from investment, I could have opted a term insurance even if from LIC(the most trusted one though, premiums are highest in the industry) my life cover would be of 25 lakhs in approximately 6k premium a year. Rest of the 15K I could invest in other things like FDs, Post office, PPF, NSC and SIPs in Mutual funds with higher returns. If I invest 1.5K monthly for 25 yrs that would be approximately 20 laks with a 10% of annual return. Now it makes a better deal. A descent life cover with a higher return.
We need to change our attitude towards term plans and their zero maturity benefit. No LIC agent would ever suggest you a term plan, because I believe-
They are also of our same mind set
Due to lack of knowledge about the products they are selling
Conventional plans have better commission for them
They also say, you cannot get personal loan on a term plan but on conventional plans you can. But we must remember that our primary objective is life cover not a loan at all. For loan we will have all other means and mortgages. However, I am sure our other investments will give us a return that will minimize our loan needs in future. Indirectly, those plans and their advisers will prefer to put you in loan needs!
Still I will recommend other insurance companies like SBI life, Birla sun life, IndiaFirst etc which have more featured term insurance plans and riders in lower premiums which LIC does not have. Ultimately IRDA is the boss. Do a good research and then opt a suitable plan.
Now I will talk about ULIP plans a little -
Nothing bad in opting a ULIP but for long term, atleast 10 years. Else, market risks and returns can make you worried.
Its better to have all the cost details straight by ULIPs rather than having no idea about the LIC premiums, where also these charges apply but we are not informed.
At the end I say, buy a peace of mind- term insurance, invest your money in other options and watch them multiplying.
Waiting for your comments and queries, all the best!