LIC Jeevan Anand Policy: Better Look for Alternatives

This article contains LIC Jeevan Anand Policy Review Analysis & details. This is part II of the article, please read LIC Jeevan Anand Policy: Review Analysis & Details Part I, before reading this part.

What are the better alternatives to LIC Jeevan Anand Policy?
Yes there are better alternatives to LIC Jeevan Anand Policy. Consider the following combination of no-frill Life Insurance Policy + investment in Exchange Traded Fund ETF.
If you go for a no frill insurance cover for say 5 Lakh Rs. (instead of 1 Lakh) for 25 long years, the annual premium comes to around 3000 Rs. The Annual premium for investments in Jeevan Anand is 4535 in the example above. So assuming that you buy the no frill insurance for 3000 and rest 1535 you invest in say a market index linked ETF for 25 years which gives you a mere 5% return every year, simple calculation show that your invested money in ETFs will easily double in 25 years. Increase the return % to 10%, and your invested money in ETF will increase by more than 4 times.
Moreover, we are taking the insurance cover of 5 times the value available in Jeevan Anand Example. In Jeevan Anand Example, we are taking 1 L as Sum assured, while in no frill policy + ETF, we are considering the cover for 5 L. If you consider it for 1 L so the premium amount to be paid for insurance will be much less (say 1500). Hence you will have more money to invest in ETF ( around 3000 per year). Hence your returns will also increase substantially. Here is an example of ETF-Exchange Traded Fund

Considering all these factors, a better alternative to look for is the combination of a no-frill insruance plan + ETF. One may also substitute the ETF with an good performing mutual fund, if they dont want to make the investments on their own and trust the mutual fund managers.