LIC policy Vs Term insurance reg

shrionsong 6
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I have three LIC policies - Jeevan Anand, Asha Deep and Jeevan Nidhi started around 6 years ago. I seemed to have made the mistake of combining life insurance and investments. Totally i invest Rs. 50,000 net per annum in these policies.

Now, i read all the research in terms of life cover and term insurance policies and am confused. Is it worth foreclosing these policies and investing them in PPF instead? For life cover, if i move into term insurance, then the option seems cheaper and more beneficial in the long run. Your thoughts???

term-plan lic-policy life-cover term-insurance life-insurance
1 Answers

Please ask insurance company about current surrender value of these policies. If you can get back atleast premium paid in last years, it would be advisable to discontinue these policies. But if there is a substantial loss, you should stick to them.

Some of the policies may have already completed 3-5 years mandatory period and even if you don't pay more premiums, they can continue with paid-up value.

Its good that you have realized the difference between insurance and investment now. Better late than never, you can now buy a pure term plan and correct your financial plan.

If you choose to surrender insurance policies, you can invest the amount back into equities for long term. Start SIP into equity mutual funds and stay invested for atleast 8-10 years and it would yield better returns than any other investment, that too tax free.

Also, we recommend you to read following posts to know about term insurance and financial planning:

  1. Insurance-Term,Health and Accident
  2. Query about "Term Insurance Plan"
  3. Term insurance which one to select?
  4. Types of LIC plans
  5. Term Insurance
  6. Financial Planning/review of a profile
Pankaj Batra5212
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