Today we will look into the features of LIC’s Jeevan Anand Plan. I will let you know why it is one of my favourite plan from existing LIC’s Plans. Before proceeding further we will first look into the features of it.
Suppose Mr.X whose current age is 30 Yrs, he want to invest in Jeevan Anand policy for the tenure of 20 yrs and the Sum Assured he chosen is Rs.10,00,000. Then his annual premium will be Rs.54,274. During this 20 years of period he have risk coverage of Rs.10,00,000. Suppose within this 20 Yrs period, if any untoward incident happens with his life then his nominee will get full sum assured+accrued Bonus till that period immediately and policy closes their itself.
But if he alive till the maturity period of 20 yrs then he will get total SA+Bonus. After that actual Jeevan Anand’s feature start. Means he still has life risk of Rs.5,00,000 till his last breath or Rs.10,00,000 life risk in case accidental death within his age of 70 Yrs. So without paying a penny he is getting his life risk after the maturity of the policy!!! One more good feature with this policy is, he can surrender the death claim amount which he is getting after his death in advance but after maturity. Now I think you got a fair idea about the features of the policy.
We will look into the returns on investing in this policy and is it worth to invest in. Just don’t go blindly on the brand name LIC have and its publicity. So look into it as any other product, like how much you are investing and in return how much you will get.
Suppose Mr.X survives till the policy period of 20 years then he will get around Rs.18,60,000 (Rs.10,00,000 SA+Rs.8,60,000 Bonus at the current rate of Rs.43 Per Rs.1000 SA per year)+if any final additional bonus at the time of maturity. Hence Mr.X will pay as premium in the whole tenure of the policy is Rs.10,85,480 and he will get Rs.18,60,000 as a return. Hence a return on your investment will be around 5.5%. So you may say is it worth when today Bank FDs are offering around 9% interest rate?
Yes, still it is worth for Mr.X. I will show you how it is. As I said above, he will get around Rs.18, 60,000 after the maturity of 20 yrs. But Jeevan Anand provided one more option to surrender the life risk which he get after the maturity period and within his last breath into cash. Suppose he waited for five more years and surrendered his life risk he may get around 60% to 70% of SA i,e. around Rs.3,00,000 to Rs.4,00,000. (The exact figure of this surrender value not known. Even I tried to get the information from LIC, but in vain). So return after using this option is around 6%.
Now with the kind of return 6% and life risk of around Rs.10,00,000 till his 50 yrs of age is good or not? Yes it is good but as the rule, he can divert his debt portfolio of investment in this policy instead of investing in Debt Funds or in any non risky product. Hence I will recommend you this plan to the tune of your investment amount of Debt. Not more than that.
Hope you understood what I am pointing. But as a thumb rule, don’t invest all your savings in such low yielding products. But need to divert some portion in such plans as the benefit of Life Risk with Returns.
View Comments (287)
Hi Basavaraj,
I've taken Jeevan anand plan-149, for sum assured 500000, for 21 yrs premium paying term in 2007 when I was at the age of 30. In 2008 we moved to UK and I continued paying premium. I haven't taken UK citizenship (although I am eligible) . Now as I am NRI, will if affect my policy in anyway? should I inform LIC about this ? Also, will I be able to withdraw the amount after the completion of 21 yrs premium paying term.? On my policy, it says policy term is 70 yrs, what does that mean? I mean will I (or my nominee) be able to withdraw the amount only after that 70yrs policy term or after 21yrs premium paying term? on Maturity means after how many years? ....I am so confused, please clarify on this.
Dear Sir,
I tried to do some calculation using IRR for my policy New Jeevan Anand-5Lac T-815-17-17.
Yearly I pay 42,158 Rs. for 17 years and policy matures. LIC pay me Bonus = =500000+410000 = 910000/-
So the IRR (-42,158*17+910000) = 2.60%. This is way too low from 5.5% you have calculated.
Kindly advise, am I missing something here?
Regards,
Deep
Dear Deep,
You are not paying the whole 17 years amount in one go, instead, consider that as yearly payment.
Hello BasuNivesh,
We have enrolled for the Jeevan Anand (149 plan) in 2005 for 10 years. My question is are we eligible for Critical Illness_Rider ?
Thanks for the feedback in advance.
Dear Ashishkumar,
It depends on whether you opted the rider or not. Check the policy bond or visit the nearest branch.
Dear Basavaraj Tonagatti,
Today I read your article about traditional policy of LIC Jeevan Anand. This article was eye opening for me. My self also invested in these policies with out knowing return 10 years back after sharp recession in 2008.
After reading your article, I get confused whether to continue these polices or else surrender and invest in some other asset class.
I also have term plan of 50 lakh upto 65 years of my age from max term plan of prem 5000 p.a.
I have these 3 polices of Jeevan Anand which I have taken 12 - 10 years back. Out of three I have calculated XIRR of one policy which come around 7.84%
Details are as follow,
commence date 28/11/2009
date of maturity 28/11/2034
sum assured 5,00,000
prem paying term 25 years
premium paid 10 years
premium pending 15 years
prem amt p.a. 18763/-
SURRENDER VALUE 1,61400-/
PREMIUM PAID 1,87,630/-
SURREND LOSS NOW 26,230/-
option 1 - CONTINUE.
maturity amount - 12,80,700/-.(tax free)
sa+bonus+f.a.b+SAM VALUE
bonus @ 49*25
fab 100 per 1000
SAM VALUE 23640*5
option 2 - SURRENDER N INVEST IN MUTUAL FUND
maturity after 15 yrs 16,20,000/-.(TAXBLE 20 %)
=fv(12%,15,-18763,161400)
option 3 - paid up and invest in mutual fund
paid up s.a. = 200000
maturity amt = 3,50,000
=FV(12%,15,-18763,) = 7,00,000/-
TOTAL BENEFIT 10,50,000-/.
So Sir, making paid up this policy is not a wise decision . Now two option available with me, option 1 and 2.
There is 3,20,000/- diffrence in both the option and also there is tax implication.
I don't know what will be tax rate in 2034, let us assume 20 %, then effective return will be(12-20%)
9.6 %.
So to conclude, 7.84 < 9.6.
If I surrender this policy , I will get extra 1.76 % with loosing 50 lakh insurance n Accident and Dis -ability insurance .
If I invest in PPF which give 7.9% return, in future this rate is not guarantee.
if i invest in mutual fund for 15 years may I get 12 % or 18 % , which is also not guarantee as market risk.
So Sir, please help me to select my option which is best suitable for me from above details.
Thanks in advance,
Waiting for your reply
vicky 9986871441
Dear Vicky,
Surrender and invest the value along with future premium in PPF+MF.
OR else can I make these policies part of my debt portfolio. I am folliowing 50:50 ratio.
Dear Vicky,
Sadly NO.
thanks for your valuable reply
Hi Basav, I came across your articles when trying to figure out the IRR on my LIC policies and they've been hugely helpful. I have a Jeevan anand policy going on from 2011 for a term of 25years. Annual premium is Rs20251 for a sum assured of Rs500000. The IRR seems to be around 6%(assuming i calculated it correctly). Would you suggest I continue with the policy or surrender it and look for other options?
Thanks!
Dear Aditya,
If you feel the 6% returns for your long term investment is BEST, then continue. Otherwise, you have to think seriously to surrender it.
Sir, I hv taken 3 lic policies jivan anand in 2013 and have paid 23105 premium till dec'2017 & now facing some problem & wanted to close policies. What is surrender value? I feel that its big loss for me. Pls advise amount i get after lic policies closed.
Dear Abdulrahim,
It is hard for me to say. Better to visit the nearest LIC Branch for the same.
Hi me RIYA I have question please reply me. I have Jeevan Anand policy in the name of my father in law for 16 years but he died before 16 years completed . Now how much amount I will get approximately
Sum assured and bouns
Dear Riya,
It is hard to say BLINDLY. Approach the concerned LIC Branch for the same.
How much amount will I get on maturity if sum assured is 500000 and paying term is 16 years. Annual premium to be paid is 34995/- under LIC Jeevan Anand (149).
Lower compare to all
Dear Suman,
It is hard for me to calculate for each individual. However, you may assume the returns of around 5%.
Sir,
If LIC Jeevan Anand policy (149) so many negative reviews, does it have atleast few positive features?
thanks ,Ravi
Dear Ravi,
It depends on how you look. If your required sum assured is fulfilled with Jeevan Anand then go ahead. Also, if you are comfortable with such low return, then also a POSITIVE for you.
Hi Basu,
I have around 8 LIC Jeevan Anand policies started in 2013 each of SA 1,00,000 (but different maturity periods).
I had taken it out of ignorance back then.
But now after gaining some knowledge have invested in Mf and PPf. My LIC premium is around 30% of my investment.
Do you think if I should continue this plan or discontinue?
You should never buy lic
Dear CCS,
You already did research that what wrong you did and still asking me?