Soon one more new plan is going to be launched by LIC in March 2015. This time again an endowment plan with limited premium payment option. This plan is called LIC’s Jeevan Lakshy (Table No.833). Let us see its’ features.
This is nothing but an endowment plan, but with only additional features being the premium payment option and unique death benefit. Below is the plan feature of this plan.
Along with these features, LIC also offers two riders to this plan.
1) Accidental Death and Disability Benefit Rider-This is exactly like accidental insurance of what you get from General Insurance companies, but with some limitation on the maximum sum assured.
2) New Term Assurance Rider-It is like opting higher sum assured life risk by paying additional premium.
I am against these two. The reasons are, in case of accidental death and disability rider, this feature has many limitations. In case of a term assurance rider, I prefer pure term insurance. So no great deal in opting these two riders.
Is it a great product to invest?
As usual, I have many reservations against this policy. I listed positives and negatives as below.
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Wonderfull bolg, very well explained the truth.
Thanks for spreading awareness... Agents are looting peoples hard earned money
Your statement is right - all product having combination of investment and insurence are bad.
Investment and insurence should not be mixed...
For insurence take term insurance and then invest you money only for investment like mutual fund(SIP), PPF etc...
Dear Amaresh,
Pleasure :)
Hello Sir,
Many thanks for writing a wonderful blog to give us valuable information.
This is Vikas Bajaj, an NRI based in Japan.
Being graduated from Tokyo university, I also got in to trap of LIC, when I visited India in Jan 2017.
I have bought two policies and paying an annual premium of approx. 2 lac (approx.1 lac for each policy)
The policies are in force and unfortunately have already paid 2 years of premium (approx. 4 lac in total)
The policies are as below;
Start date: Feb 2017 (next premium to be paid by Feb 2019)
833 Jeevan Lakhhya (SA 20 lac, Term 25 years, premium paying 22 years)
836 Jeevan Labh (SA 20 lac, Term 25 years, premium paying 16 years)
If I surrender the policies now, I won’t get anything back as I have paid only for 2 years. It means I will have to suffer loss of 4 lac.
And if I pay 1 year of premium (approx. 2 lac more), I may have the policies paid up, but I am not sure what shall be the maturity amount as LIC doesn’t give future bonus (mention on their HP) on paid up value/ sum reduced.
Since bonus is not applicable, so total paid up value of the policy shall be 6 lac in total (both policies) and I would get 6 lac after 23 years from today, is this right?
Considering an alternative, if I have fixed deposit of 2 lac in any bank (rather than giving it to LIC), the value after 23 years will be approx. 9.5 lac (having return@ 7% p.a)
Please advise the following.
1.What shall be the approx. maturity value of the paid up policy?
If maturity value after paid up of policy shall be around 9 lac, I prefer to have the policy paid up after paying 1 year premium.
2.I prefer to have term insurance of SA 1.5 Cr with 30 lac coverage of critical insurance from ICICI Pru. Do you recommend this?
Vikas
vickyapu9@gmail.com
Reply
Dear Vikas,
1) It is hard to say. However, if you pay for another year and surrender, then you will definitely get less of what you paid (maybe 50% to 50% of what you paid). Paid up is suitable when you are nearer to maturity.
2) You can.
First of all, many thanks for your reply & giving me time from your hectic schedule
I tried to check LIC maturity calculater of Jeevan Labh (also confrimed with agent), and it says I might get approx 54 lac (SA 20 lac, Bonus 25 lac, FAB 9 lac) at the time of maturity.
According to my calculation, the return shall be approx. 7.5% p.a which is not bad indeed if the same amount is paid.
I am not really sure, if Bonus & FAB both are paid as guaranteed amount, in addition to SA.
Lets says, if FAB is not paid, i would get only 45 lac and the rate of return shall be 6.5% p.a.
So my question to you is, please confirm if LIC pays bonus & FAB both?
and do you think above calculations are correct?
Dear Vikas,
Do you feel the 7.5% returns the BEST returns for your long term goals? A simple product like PPF can easily beat this complicated and illiquid product. Regarding calculators, I am not sure which one you used. However, as per me the returns will not be more than 6%.
Dear Basu,
I have read your blogs many times,it i s good that you are spreading the awareness regarding Insurance.
There are couple of points I think it also should be highlighted..
1) A product cannot be designed whether its in insurance ,mutual funds or any to every individual , so even if any insurance company if designing the endowment product it had given a thought about the target audience, so that targeted audience would really have achieved there dreams or goals (I have seen many of them). So giving a statement "All Products with Insurance +Investment are bad so do not buy" is not done.
2) I really admire and push Term Insurance religiously ,unfortunately I have observed that when an individual(IN MANY CASES) buy Term Insurance he is packed with full of commitment,knowledge and more of passion initially, but as time passes his passion starts fading away,by 6 to 7 years they stop the payment, even after numerous reminders and meeting them about there passion they think otherwise(There comments are "Leave any ways I won't be getting any money out of amount"). So end of the day the entire plan goes on toss, they are neither covered by Term plan nor Endowment . If observed Endowment plans are more in force then Term.
3) I love the tag called "THERE ARE NO FREE LUNCHES" even if you would say that the blog that you have written is free to access,but brother Blogging also known to be a best marketing tool to increase the reach and believe me I really have highest regards for such knowledgeable marketing tool.Keep it up. Coming back to the topic So end at the end of the day every body out here is there to earn ,if an agent gets commission of 25+% in first year as you mentioned then that is remuneration of the work they are doing To Advise,Sell,keep policy intact till the goal is not achieved its a rigorous work .Somebody gets through company and some body through both CLIENT (As Fees) and also company. Understand one fact for agents its business with utmost self respect and service for the clients.Comparing commission between Insurance vs MF is ridiculous as both the products are different so as the ways to get there respective business.
4) A genuine request,if you writing on Awareness of insurance then kindly just don't name any company (LIC) you could choose the words as INSURANCE COMPANY for reference.As most of the time for referring insurance companies you choose to refer it as LIC.As no body in this world would say he knows everything so there could be many fact which you won't know about that respective Company(LIC).
Thanks for the platform
Stay Health Stay wise.
Shrikant Talikoti
Financial Advisor
I completely agree with Basu and admire him for his such great articles. LIC has looted this country big time. Even i myself has been looted by LIC. ULIPs , endowment plans are such a sheer waste of money. I had Jeevan Anand policy which i went ahead and closed even in loss.
@Basu: You are doing a great job and keep on spreading the knowledge. Let LIC mend its ways or die sooner than later!
@Shrikant Talikoti: Dont get offended and accept the truth. Best way is to buy Online Direct good mutual funds and Online Term plans for insurance. Thats it. Simple and straight!
Gagan-Pleasure :)
Shrikant-1) Give a single PRODUCT which proves my statement wrong of "All Products with Insurance +Investment are bad so do not buy". Don't look at others, consider target audience as YOU and explain me please??
2) Do you have data to prove that term insurance lapsation ratio high after 6-7 years? Also, if he is buying online, then why an agent run behind him for premium payment? If agent is running behind him means it is an offline product, which in any case costlier than online. So the customer may already opted for online product. This also a possibility right?
3) Refer my earlier post, where I exposed from advisers, planners, CFPs to BLOGGERS. Hope you will get answers to your doubts :)
Who is the best financial planner in India?
4) In my view, the biggest culprit in spreading wrong message about meaning of INSURANCE IS LIC. So I love to refer LIC, at the same time, don't feel I am fond of other insurers. I distance all of them equally.
It seems it hurted you a lot as you seems an LIC agent. But to your surprise, I am also an LIC agent since 2003 :)
Sir plz tell me which plan is better for me jeevan anand or jeevan lakshya.
My age is 26
Mohit-Both are same when it comes to returns and insurance with slight changes in plan features.
Sir i want to Know which is best to make investment for my sons future since he is 1 year old now and a want to save some money for his future, that is for his education purpose. Maximum i can invest Rs 15000 PA for 20 years, wether i have to opt RD or LIC,s or any other saving scheme. Please give me in detail.
Nagendra-Stay away from any product which combines Insurance+Investment.
exactly never mix insurance and investment ever!!!
Lic chalana h.....agent se milaya jat
To Basu,
I see a lot of people complaining as a group, it has become You vs LIC agents. A lot of people benefiting from your reviews would have least bothered to put comment for your service.
Everybody is entitlled to his opinion & no person (especially with vested interests) can dispute that.
Shiva-If someone really benefited from my blog then my goal achieved and that is what I think. Commenting for or against me is entirely their views and I will not bother.
Insurance and investment will never go parallel. They both are different, don't compare it , well karan said that. In my field mostly are marwari. As you know they first calculate the "vyaj"" (interest). it is very difficult to handle them. can you suggest any LIC policy which can satisfy them ?
Sanjib-No LIC for that community if they start to think about Interest :)
Dear Basu
Any of the LIC plan is not good according to you as i know from your BLOG. Then tell the indian people wether the buy any insurance or run their life without INSURANCE
Pappu-Please let me know where I have written not to buy LIFE INSURANCE? I am not against LIFE INSURANCE, but against products which combines insurance+investments :)
I agree with you sir
Salman-Merely changing name and defending by the same name will not make a big group of defendent. There is something called IP Address to track who are behind and from where you people are commenting. You and Aakash seems to be one and same :) Please avoid such tricks.