All of you may have seen the LIC Jeevan Anand Policy ad on television as well print. Let us see whether this LIC Jeevan Anand Policy worht any investment and who should consider it for investment as well as insurance. It is a mix of Endowment Assurance and Whole Life plans.
So you get both insurance as well as the returns at the end of the term. But is it good enough to put your hard earned money in LIC Jeevan Anand Policy or are there any better options available? Let's have a look.
Review & Analysis of LIC Jeevan Anand Policy
The tagline line of the ad says "Zindagi ke saath bhi, Zindagi ke baad bhi". So in case of death of the insured, the Sum Assured uner this plan (along with the bonus) is payable to the nominees. In case the insured survives, The Sum Assured and the bonus is payable in a lump sum on survival to the end of the term. An additional Sum Assured is payable on death thereafter.
So looks like a good plan as it offers both. But hang on before you look at the numbers.
One issue is that this is a mix of insurance as well as investment (something which we never recommend, although it may suit certain individuals). The biggest problem in the returns is that it is made up of two parts - one is the Guaranteed amount (Sum Assured) and second is the Variable Amount (which is not guaranteed and can vary from zero to any value.
What are the effective returns available from LIC Jeevan Anand Policy?
Let's take an example of a 35 year old male who wants an insurance of 1 Lakh (Sum Assured) and takes the policy for 25 long years. He selects Annual Premium payment, and his annual premium payment comes to Rs. 4535.
So at the end of 25 long years, he would have paid a total of 113,375 Rs as premium and his guaranteed amount will be 1 Lakh (i.e. less than the total premium he paid). However, you need to add to it the variable component. As illustrated on the site, the variable component can be anything from 41,500 to 141,000. So the total benefit payable at maturity will be in the range 141,500 and 241,000.
So over your total invested value of 1.13 lakhs, at the lower side you get 25% return and on the upper side you get 113% returns. However, you must note that this return is the total you are going to get in 25 long years. Now does those numbers look attractive to you?
Effectively, you are not even getting the gurantee to double your money in 25 long years.
Now what we are not considereing is the insurance part - you are insured for the 25 long years and you will be covered till the age of 70 years. As per the site, If the death occurs due to accident up to age 70 an additional Rs. 1,00,000/- will also be paid. Now all these tags and riders are complex to understand.
But if you really need to value insurance, take the case of a no-frill insurance for 1 Lakh Rs. (No frill - where you dont get any returns, only pure insurance is available)
What are the better alternatives to LIC Jeevan Anand Policy? Continue reading the alternatives for LIC Jeevan Anand Policy
1 comment:
THE OBSERVATIONS REGARDING THE JEEVAN ANAND POLICY MADE IS ABSOLUTELY WRONG. THE POLICY HOLDER IS SURE TO GET AN AMOUNT OF Rs.172500/- UPON MATURITY, AND AFTERWARDS AGAIN ANOTHER Rs.1,OO,OOO/- TO THE FAMILY WHICH MAKES A TOTAL BENEFIT OF RS.2,72,500/-. THE STATEMENT THAT VARIABLE AMOUNT- ie;THE BONUS IS NOT GUARANTEED IS NOT AT ALL CORRECT.THERE IS NOTHING COMPLEX AND IS EASILY UNDERSTANDABLE.WHILE NOT INTERESTED TO COMMEND THE ETF SCHEMES, NO DOUBT THE JEEVAN ANAND POLICY IS ONE OF THE BEST POLICY HAVING BOTH ASPECTS- INVESTMENT AS WELL AS RISK COVERAGE.
Post a Comment