LIC’s new plan Jeevan Shagun-Review and Features

LIC is going to launch one more new plan on 1st September 2014. However, this time it is a close ended plan. This is a single premium and money back plan. Let us look for its feature and benefits.

LIC's Jeevan Shagun

As I said earlier, this plan is a close-ended plan, which opens from 1st September 2014 to the maximum period of 90 days. It is non-linked, with profit, single premium, and money back policy. Below is a graphical representation of this plan feature.

LIC's Jeevan Shagun_PPT

In this plan, you have the option to choose a maturity sum assured. Based on this MSA and age of proposer single premium will be payable.

Who are eligible?

  • Minimum Age at entry is 8 Yrs.
  • Maximum Age at entry is 45 Yrs.
  • Mode of Premium Payment is only single.
  • Minimum Maturity Sum Assured (MSA) is Rs.60, 000.
  • There is no maximum MSA limit under this plan.
  • Policy Term is 12 Years only.
  • Mode of Payment is Single.

What are the death benefits of this plan?

  • If death occurs during first 5 years of policy period then you will receive the Basic Sum Assured (which will be around 10 times of your single premium you paid).
  • If death occurs after 5th year, but before 12th year, then you will receive the Basic Sum Assured (which will be around 10 times of your single premium paid) along with Loyalty Addition.

Please note that the premium to arrive at Basic Sum Assured will not include the taxes you paid, any extra premium and is before applying rebate.

What are survival benefits of this plan?

  • At the end of 10th policy period, you will receive 15% of Maturity Sum Assured you opted.
  • At the end of 11th policy period, you will receive 20% of Maturity Sum Assured you opted.

What will be the maturity benefit? 

On maturity, you will receive remaining 65% of Maturity Sum Assured along with Loyalty Addition.

What is Surrender Value of this policy? 

  • If you planned to surrender in first year then 70% of your single premium will be payable (excluding extra premium and taxes).
  • After that 90% of the single premium, (excluding survival benefits any paid, extra premium and taxes).
  • Along with this, you can avail special surrender value, which will be discounted factor of Maturity Sum Assured less of any survival benefits paid.

Can you avail the loan?

Yes, you are eligible for loans under this plan, but the values are as below.

  • If within 2nd to 3rd year, then you will get 50% of Surrender Value.
  • If within 4th to 6th year, then you will get 60% of Surrender Value.
  • If within 7th to 9th year, then you will get 70% of Surrender Value.
  • If within 10th to 12 years, then you will get 90% of Surrender Value.

Premium example

Age 8 Yrs MSA Rs.1, 00,000=Rs.50,880.

Age 20 Yrs MSA Rs.1, 00,000=52,390.

Age 25 Yrs MSA Rs.1, 00,000=Rs.52,803.

Age 30 Yrs MSA Rs.1, 00,000=Rs.53,736.

Age 35 Yrs MSA Rs.1, 00,000=Rs.56,019.

Age 40 Yrs MSA Rs.1, 00,000=Rs.61,380.

Age 45 Yrs MSA Rs.1, 00,000=Rs.74,106.

Below is the automated calculator, which you can use to arrive at return from this product. You need to enter the premium (in negative) you will be paying and MSA opted. Values in green only to be keyed.

Whether to buy this plan or not??

This is typical non-linked traditional plan. Let us consider a person aged 25 Yrs and planning for Rs.1,00,000 MSA. So he need to invest Rs.52,803. After 10th year he will receive Rs.15,000 (15% of MSA). We re-invest this for two years to match with maturity at current SBI FD rate of 9%. This will fetch him Rs.17,821 (at end of 12th policy year). After 11th year he will once again receive Rs.20,000 which we again re-invest but for only one year at same current SBI rate for 1 Yr. This will fetch him Rs.21,800 (at end of 12th policy year). So overall return will be Rs.17,821 (10th year MSA%)+Rs.21,800 (11th Yr MSA%)+Rs.65,000 (65% of MSA)+Rs.30,000 (LA @ Rs.300 per Rs.1,000 MSA)=Rs.1,34,621. Return on investment will be 8.11%.

Assume the same Rs.52,803 invested in Bank FDs at current SBI FD rate 8.77% for 10 Yrs (maximum tenure available for FDs). At the end of 10th year return will be Rs.1,22,445.  If the same is invested in SBI FD for another 2 Yrs (to match this plan tenure of 12 Yrs) at current rate of interest at 9% then the maturity value will be Rs.1,45,476.

So I still feel simple Bank FD can beat this plan’s return easily. However, in both comparisons there are few risks and assumptions, which I have listed as below.

1) LA rate assumed at Rs.300 per Rs.1,000 MSA.

2) Interest rate calculated based on current rate. Therefore, we do not the future trend.

3) Taxation part is neglected. Even though this plan offering you tax-free kind return but bank FDs return are taxable according to one’s tax slab.

Also when one looks at premium chart it seems that for younger buyers the premium is very less like 8 Yrs of age Rs.1,00,000 MSA premium is Rs.50,880 but at the same time for 45 Yrs old the same MSA premium will be Rs.74,106. This seems that if you want to enter into this plan then better to invest in the name of younger member of family.

So one need to treat this plan purely as a one time investment with return around 7% to 8% maximum. However, do remember that waiting for 12 long years and satisfying with 7% to 8% is not a prudent investment strategy. Because this plan returns almost matches the current inflation rate. Therefore, when we consider real return then this investment seems not worthy.

However, at the same time if you are looking for an investment of one time with return expectation of around 7% then definitely go ahead.

79 Responses

  1. Hello Sir ,
    I am Male, Single aged 41, I am working in a Software Firm. I have parents who are sick and dependent on me financially. There are so many private Insurance Body who are approaching me like Max Life, ICICI Prudential etc. Are you in a Position to recommend some Policies which would suit me .


  2. I want to know that is there any health insurance plan in which i have to pay upto rupees 300 annual.For dis amount of yearly installment i m just expecting a limited claim amount. i will be thankfull to u if u provide me the related information.
    thank u

  3. Dear Rohit,

    Please tell me about any investment plan (one time investment plan) so that ill get return after 10 – 15 years.

    My Age is 41 years.



  4. respected sir,
    i am a private organisation employee and i am getting 30,000 and i have no idea whn my is left me so for my better future i want to invest so that in my bad period i can utilize the invested money so suggest me which plan is good for me eg investment+health+death benefit is jeevan sagun is good for me…eagerly awaiting for ur reply

    1. Sandeep-First create an emergency fund of at least around 6-12 months of your household expenses. Then buy online term insurance for about 15-20 times of your yearly income. Finally opt for health, critical and accidental insurance. Once all these are at place then we discuss about investment.

  5. Hi,
    I am 31 yrs old and unfortunately had minor heart attack in 2013, none of the companies are providing me with Term insurance because of this there a way out you can help me get.


          1. Ok, I have another query on investment, While it is know that LIC gives around 6% return…can you suggest any better plans apart from Ulips where returns are more….may be a investment around 10 Lakh.

              1. I Agree, but as you have expertise in market plans, what is best and safe way to invest which has higher return also…can u help in that and suggest a few that come to your mind.

                1. Rohit-If your time horizon is around 10 years then no doubt equity mutual funds are best. If less than that means you need to invest part in safer products like Debt Funds and Equity Funds. But how much you need to invest to which asset class again depends on lot of things. Plain speaking is most dangerous.

  6. thank you very much for update us about the features of latest LIC plan jeevan shagun…

    i am a 22yrs old government employee earning around 30000/- pm and wish to purchase a long term insurance plan with a good return..
    will you please advice me that may i prefer LIC jeevan anand for a period of 30yrs for Rs. 5lacs..

    pls also explain features & the maturity + survival benifits for above mentioned data…

    I have searched LIC website but couldn’t found much to understand…


  7. Guys, I reviewed Jeevan Shagun with live examples. Hope this helps people trying to get info on this.

    Basavaraj Tonagatti, Thanks for your excellent articles. I have been a silent reader for a while and they are indeed very very good.

    Consider a person with 25 yrs age planning for Rs. 2,00,000 MSA, the premium will stand at Rs.1,02,513(After Service Tax)

    Now drawing comparison with FD, today’s interest range for 10yrs(Max available) is around a average of 8.25%(Could be little higher or lower but still I considered after averaging few banks)

    Investment = Rs.1,02,513
    Interest Accursed = Rs.1,29,465
    Total (Before Tax) = Rs.2,31,978
    Tax(Min Slab 10%) = Rs.12,946.5

    After Tax Returns = Rs.2,19,031.5

    Now Consider, you reinvest this same amount in a FD for next 2 yrs, Current FD interest rate stand at 8.75% for 2 yrs (again averaged, “Could be little higher or lower but still I considered after averaging few banks”)

    Investment = Rs.2,19,031.5
    Interest Acquired = Rs. 41,407.5
    Total (Before Tax) = Rs.2,60,439
    Tax(Min Slab 10%) = Rs.4,140.75

    After Tax Returns = Rs.2,56,298.25

    Final Returns after 12yrs in FD is Rs.2,56,298.25

    Now let us consider on Jeevan Shagun for example,

    After 12 yrs, MSA = Rs.2,00,000
    LA @ 300/1000MSA = Rs. 60,000

    Total return = Rs.2,60,000

    Now here comes the interesting point, the payout is not as one go and it comes in 3 installments, meaning in 10th, 11th and 12th year

    So in 10th Year we get Rs. 30,000
    Now put this in FD for 2 yrs, after tax returns will be around(10% tax considered) = Rs.35104.8*
    (Rs.30000 + Rs.5,672(Interest*) – Rs.567.2(Tax @ 10%) = Rs.35104.8)

    In 11th Year we get Rs.40,000
    Now put this in FD for 1 yrs, after tax returns will be around(10% tax considered) = Rs.43254.4*
    (Rs.40000 + Rs.3,616(Interest*) – Rs.361.6(Tax @ 10%) = Rs.43254.4)

    *Considered 8.75% as interest rate for both 1 yr and 2 yrs (again averaged, “Could be little higher or lower but still I considered after averaging few banks”)

    In 12th Year we get Rs.1,30,000

    So by this calculating Jeevan Shagun return,

    10th Year return after FD = Rs. 35,104.8
    11th Year return after FD = Rs. 43,254.4
    12th Year return = Rs.1,30,000
    LA @ 300/1000MSA = Rs. 60,000

    Total return = Rs.2,68,359.2

    Jeevan Shagun return(Rs.2,68,359.2) – FD Return(Rs.2,56,298.25) = Rs.12,060.95

    We have an assumed gain of Rs.12,060.95 from FD returns
    We by default throughout this 12 yrs, get an Insurance coverage of more than Rs.10,00,000(10 X Premium).

    So a Term Anmol Jeevan II for Rs.10,00,000 for 12 yrs will cost Rs.26,040(Rs.2,170** X 12)

    **Premium for Term Anmol Jeevan II for Rs.10,00,000 obtained from LIC Premium calculator.

    So the assumed gain is Rs.12,060.95(Monetary gain) + Rs.26,040(Term Insurance gain) = Rs.38,100.95

    So Jeevan Shagun does beat the FD+Term Insurance route by a comfortable margin. Even if LA is below 300, we have the absolute gain of Term insurance premium.
    As also one more issue considered is, if age increases, premium increases. By this we will also have to consider that the Insurance coverage also increases which is useful at older age, practically speaking.

    Note : I am no LIC agent, but a normal IT employee trying to same my taxes at the most 😛


    1. Anand-Thanks for your elaborate work 🙂 But there are some pitfalls in your calculations. Whether they are against this plan or FD. But you forgotten few instances.
      1) Bank FD taxation you considered flat. But if one is at higher tax slab then he/she need to cough more tax on that.
      2) Term Insurance plan premium-You are not paying the whole amount at once. But you are paying it yearly. So time value of each installment need to be considered than flatly considering it for calculation (This is for Bank FD+Term Insurance option).
      3) It may either beat FD or not. It is not an issue. But waiting for so long like 12 years and earning 8% return is worth for any of your goals like cost of education, retirement or any of other goals. So where is the consideration of inflation?
      4) I am neither for this plan nor towards FDs. Because both fail to beat actual inflation.
      5) Also nowadays filling the Sec.80C option is nowadays easy. So I don’t think one must buy this plan only looking at tax.
      6) Also while comparing this plan to FD why you opted for offline term plan? Where as one can easily buy online at cheaper rate even from LIC itself.

      1. Thanks Raj for the points… I love to keep the discussion alive so everyone can benefit… 🙂

        1 – Considered flat 10% as that is the minimum and is for sure detected by banks as TDS… so as ones bracket increases the tax is more in FD which as an investor we are not willing to pay…. 🙁

        2- Yes it is true that the term plan premium is not one time, but i accounted it for how much we totally pay…. time value calculation can help us arrive at a better figure.

        3 & 4- 8% returns is less than inflation, but i am a very conservative investor who dosent wanna a risk it @ MF, leave alone for equity. So for ppl like me, I think this should fit in. If there are any other tools that give more than 8% for a conservative investor,do let me know… will be very happy to explore.

        5- Yes Tax filling is easy, but we will need to see for avenues to save them. Like PPF, etc… I think LIC is one that could falls under that category if utilized correctly.

        6- well I went in for a offline plan because, LIC’s e-term plan doesn’t cover Rs.10,00,000 as the min amount starts from Rs.25,00,000 for which the yearly premium will be around Rs.2,800. Again time value calculation should lead us to the near little less figure.


        1. Anand-
          1) Let our discussion be legally 🙂 So better to consider 10% TDS by adding point that this income is taxable as one’s tax slab.
          2) So you need consider lesser amount actually than rounding of to like what you did.
          3) How about PPF? When you said conservative and very much happy with 4% to 8% return, I am not questioning like why you are conservative 🙂 But to be calculative in our financial life, do you feel the kind of return you are expecting will suffice to meet any of your goals? To be specific in meeting goals and along with that being conservative, you have two options. One is to invest more which can easily takes care of inflation itself. Second is to opt for an asset class which beats the inflation of a goal easily. If both are not acceptable then your goals will be at terrible risk.
          4) Do you still feel with current take home of an individual (even for small Govt employee), filling Sec.80C is tough and one must include LIC policies to fill it properly?
          6) I accept your logic of selecting offline. But when we are considering the values then why can’t opt for online minimum offerings?
          Please reply with your logic and let us see where we both head at end 🙂

          1. Ha ha… I am a very upright man and i take it very strict to pay my taxes and make sure all people working with me pay their taxes! 🙂 So it is always legal. But I want to utilize every possible way legally to save taxes which i think shuldnt be a problem.. 🙂

            I am a active PPF investor with SI to invest every month.

            I would Suggest LIC as a instrument for Insurance product as 1st and tax saver as 2nd. but when both can give some kind of return @ the end, It is ideal that I will be tempted to turn towards it. Its like a package deal, where i am not worried about the nitty gritty’s of the stuff and pay LIC to take care of it.

            Well you are completely correct when you say that the returns from your investment do not meet inflation the capital itself will become irrelevent on the longer end, but I still see Equity and stuff as a high risk profile.

            Since we have a enhanced Tax bracket of 1.5 Lakhs, and I dont hve a housing loan for myself, I see this investment as a longterm stable returns provider and PPF as a long term cash back up. other tax saving instruments also return with the same 8-9% returns[Except ofcourse ELSS], so it is ok to go with anything. I am prefering this because it satisfies my risk coverage appetite of Rs.10,00,000.

            Ur thoughts…? 🙂

            1. Anand-But being silent on 10% TDS when you are at 30% tax bracket is not legal 🙂 When you say insurance consideration your mind when referring to LIC then why can’t pure insurance with LIC itself? If you do so (buying full cover of life insurance) then you will sleep calmly. Do you feel 6% return will tempt you that much? Then how about NSC or PPF which provides more than these products?? Also it is no rocket science to buy term insurance and invest rest in PPF or some other tax saving instruments. When you say equity as risky, may I know which assumptions or practical experiences prompted you to arrive at this decision? May I know how you arrived at assumption of Rs.10,00,000 insurance cover will suffice your life risk need?

              1. Well I haven’t got a package yet that will put me in 30% bracket yet!!(May be i should blame my manager for it :P)…. But my point it whoever it may be whatever their tax is they must pay for sure without any fraud in it. Do all ur investments in all legal ways is my view point…:)

                Well I trust LIC as the best insurance provider in India because of its settlement ratio, which is a impeccable track record. I know a private XXX insurance player who tried to strike a deal with a widow to take Rs.10,00,000 less in Rs.30,00,000 policy showing complex terms to a grief stricken widow. This was even after the man had paid all his premiums correctly and the policy document showing clear cut view. After a couple of us looked into it and threatened to go to IRDA, the XXX insurance company paid the promised sum.

                So coming to the point about why not term insurance. The best example is Maruti ad which ask “Kithna dethi hai???”. We Indians see value in every penny but want to make sure the capital is itself not lost. So when I prefer this plan, I see a return of 7-8% as per the calculation above (may or maynot change), but I have a guarantee that my MSA will come. Now why do I take the loss of .5 – 2% which I can get in PPF or NSC is I can consider it as the premium towards my insurance, which I cannot get in that instruments. Also this is Just one part of my Tax saving Investment, and I still have PPF running in the background. So I am balancing out.

                On the equity part, I should rather say I have been rather unlucky or had back experiences. I had lost money in equity/MFs and also ULIPs(But In my view ULIPs as a product itself is deceiving and lets the company take most of ur profits)

                My calculation of Rs.10,00,000 insurance is because of I am umarried bachelor in mid 20s with no financial dependents(My dad and mom have good pension and adequate medical coverage/Savings/Insurance). So Now I don’t see my necessity to take a Rs.50,00,000 insurance plan. As and when my dependency increases I always can get into any of the other products with LIC based on needs.

                So it again leads out discussion to the fundamentals “Higher the risk the possibility of higer the return.” So It depents on the Individuals midset and capacity… 🙂



                1. Anand-Do you feel claim settlement ratio really gives you clear picture of insurance companies claim settlement process? Do you in LIC’s claim settlement how many claims are less than Rs.2,00,000 or Rs.5,00,000? The ratio itself have lot of flaws. So depending on this criteria is not fair.
                  What happened to that widow applies to LIC also when agents blindly sold few ULIPs stating that investors money doubles within 5 years. You visit any nearest branch and ask for horrible experiences of claims settled under ULIPs after so much of quarrel with investors, then you will come to know that LIC is no different.
                  Do you ask the same question of “kitana deti hai?” when you buy vehicle insurance or health insurance?? Please understand the importance of INSURANCE. Only because of “kitana deti hai?” such low yielding products exists in insurance industry and insurance companies forget what their sole motive is.
                  Balancing your investment within same asset class??? Please understand the basics of investment. Read…read…read the basics then decide.
                  Can you elaborate more about the how you lost in equity/MF? Because today itself I met a senior investor who bought Herohonda at it’s IPO and sold it when Hero and Honda parted their business. Lucky guy right? We hardly understand how equity works but we judge it is worst and risky. For your information this senior investor is still active in equity market and surviving on dividend he earns 🙂
                  Well currently your need may be that much, but after few years if you try to buy then do you feel the same premium applies to that time also? Buying insurance at younger is again saving than buying at later stage of life.
                  I totally agree that higher risk leads to higher return. But problem is definition of higher risk… 🙂

  8. Dear Sir,

    From my point of view, this policy is looking like a term Insurance plan. Can i consider like this?

    Except money back option and 12 year limitation, this is looking like a term insurance plan. Am i right?


    1. Ashok-Whether you are able to buy the required insurance coverage fully from this plan like Rs.1 Cr or above? Also do you feel 12 years is suffice for your insurance coverage? What you will do after 12 years?

  9. Hi Basavaraj,

    I’m Planning to buy new policy, but not sure which one to choose.. Could you kindly advise me.

    Please give me miss call to my number 8754477427, so I can call you back and get more details.


  10. Apart from the 7-9% return, this also offers insurance cover at 10x of premium paid. If you assign some value to this benefit and considering that FD interest will attract tax, this plan seems to be better than Bank FD at least.

    Your blog is doing an excellent job of investor education. I especially like the in-built calculator. I have also started a blog to discuss some of the off-beat aspects of financial planning. Please visit for more details. Enjoy…

  11. Dear sir,

    My name is praveen kumar & get salary around 30 thousand permonth.

    I have read your all information provided by you which is very much valuable. From this i have understood the difference between term insurance & (invest plan + Insurance). Thank you very much for this sir.
    Actuall y i was taking lic money back & lic jeevan anand. but after reading your blog, i understood well.

    Kindly suggest some policy where we get some good returns in terms of investment & term insurance seperately.


    praveen kumar

    Waiting for your reply.

  12. Hi, Can you please give a comparison of the premium invested in LIC Jeevan Shagun Vs PPF ?

    Both returns are tax free. Risk coverage is not necessary for me as I am sufficiently covered by term insurance.

    Also is there any permanent disability benefit?


  13. Hi,
    I have LIC’s Jeevan Chhaya policy for 25 years with sum assured of 10 lac. I pay 44,396 premium on yearly basis. Should I continue this policy or not? Till now, I have paid 3 premiums only. Premium paying term is for 25 years & if I multiply 25 * 44396 then I will have to pay 1109900 lac rupees. I am not sure how much will I get in return after 25 years.

    Please suggest.

    Naveen Chandra Joshi.

      1. Hi,

        Thank you very much sir for the prompt reply.

        At the time of maturity how much total amount will I get?

        Naveen Chandra Joshi.

  14. I want to calculate the maturity amount of NPS.
    if i invest 6000 pm till 35 years.
    and increase the investment by 10% each year
    like in first year invest 6000 pm
    in second year: invest 6600 pm and so on… till 35 years

  15. Sir,
    A very good article regarding the new plan of Lic ( jeevan shagun) , but some how it shows a mix report for return, if we exclude the risk cover of our life. Coming to the point can u help me if i invest 50880 (premium) for 1 lac s.a for my 8 year son for a term of 12 year, can it will benefit for the younger age after 12 years, and here the return interest will be same for the said term (12 years).

  16. hello Basavaraj Tonagatti
    Thanks for telling us every detail of this profit giving jeevan shagun policy with example .Here i got every answers which i want .Feeling very glad on being here

  17. Sir, there is also one good term insurance plan of HDFC Life Click 2 Protect Plus with money back. What is your opinion if one’s age is around 25 years and sum assured 50 Lacs and Premium Rs.5650 p.a. (approx.) and premium paying terms is 30 years. At maturity, sum asssured will be paid and Rs.25000 per month for next 10 years will be paid.
    Please reply

  18. Is rebate will be there in Income Tax on one time paid premimum ?
    As amount received on maturity is not taxable and life risk is covered
    So I think this is best scheme for investors than FD which is taxable.

  19. Dear Basu,

    Your analysis on this product really very good thanks for that. But you always think in the aspect of only investment. As per my understanding Insurence is ment for risk cover. So it is better to consider risk also before you providing the detailed analysis. We can not always think about investment one should consider risk also which will provide basic support to their dependents I guess.


    1. VK-Thanks for your kind words 🙂 Please let me know which agent of LIC sell any product considering the insurance need of a buyer? If agents are so much concerned about importance of insurance then LIC might not dared to launch such Insurance+Investment Product. That is the reason I too shifted to investment 🙂 Am I wrong??

  20. Sir,
    A very good article regarding the new plan of Lic ( jeevan shagun) , but some how it shows a mix report for return, if we exclude the risk cover of our life. Coming to the point can u help me if i invest 50880 (premium) for 1 lac s.a for my 8 year son for a term of 12 year, can it will benefit for the younger age after 12 years, and here the return interest will be same for the said term (12 years).

  21. Dear Sir,

    I believe this plan is amazing mixture of ROI and Insurance.
    Your comparison of this plan with FD returns with certain assumptions, is brilliant.

    But what about, if someone invests in FD for 10 years and dies on 5th year or 6th year ? How much returns, he could get at that time?

    But same time someone chooses to invest in Jeevan Shagun instead of FD, I believe he would make an intelligent decision as before 5th year, his returns in case he dies would be on higher side than that of FD. Same is the case, when the person dies between 5 to 10 years.

    Yogesh Suryawanshi

    1. Yogesh-What if one combines Term Insurance with Investing in FDs? In that case from this plan one will only receive the Basic Sum Assured but in case of Term Insurance+Bank FDs nominee will receive SA+Bank FD with interest till that period. Here the major question one need to ask is how much LA LIC will declare. If is less than Rs.250 then it is worst investment.

      1. Sir,

        I believe, this plan by LIC has a capability to replace FD as an investment tool.
        Interest rates of banks are keep on fluctuating, but LIC’s return calculation for this plan is based on LA.
        You are right sir, if LA is less than Rs. 250 then returns would be somehow on lower side.

        Still I believe

        1)Term plan of Rs. 1 Cr. + FD of Rs. 15 lacs for 10 years


        2)Term plan of Rs. 1 Cr. + Jeevan Shagun of RS.15 lacs for 12 years

        Returns would be approximately same after 12 years, if we consider the points, discussed by you in your blog for case 1 and case 2

        But, suppose death happens before anytime before 12 years, case 2 would give higher returns.

        Yogesh Suryawanshi

        1. Yogesh-In your second case why you are considering term plan when you are claiming that this insurance product is good and will give more than FD+Term Insurance. Also you need to include the cost of term insurance while comparing with this product to Bank FD+Term Insurance. I am not saying this will not overtake FDs. But the point is, one must understand the product and if any financial goal matches this during and risk profile then only he can go ahead. But sadly which agent is in mood to analyze such things??

          1. Hi Yogesh.
            You are comparing apple with orange. You should not compare term insurance with life insurance. 1 Cr. term insurance will not cost more than 7-8K. Just imagine what will be amount for same cover for Life insurance by LIC? and main fight is here. People think that they will survive and want money back on maturity.

  22. May be from common point of view an FD and this plan may be compared. the best part of it remains, the risk cover of ten times of premium paid roughly around 5 lacs( in this particular case) for the entire term of the policy and its cost stands ignored. Another part is it offers tax free maturity under sec 10(10D) which no fixed deposit can offer. even if the investor is in 20% slab, the return on investment post IT rebate and mortality premium, and likely IT impacts on other savings instruments at the time of maturity, this plan will definitely score over others.

    1. Muthian-I compared with FD only because currently we have no offerings like tax free bonds or NCDs to invest and compare. Along with that I mentioned already in plan features that this plan offers the insurance coverage too. Regarding taxation, in my final part of analysis I particularly mentioned. Please have a re-look. But the interesting part in expecting return from this plan is LA, which I considered @ Rs.300 per Rs.1,000 MSA. Whether LIC will provide such rate is the question till the end of maturity 🙂

      1. Though the return is not very impressive but quite helpful incase of somebody’s death. In comparison to bank FD,return will be almost be the same for the people paying IT in the highest bracket.When the return is almost the same or little lesser than the FD after tax deduction we must prefer to invest in LIC shagun to safeguard our future uncertainty.

Leave a Reply

Your email address will not be published. Required fields are marked *

For Unbiased Advice Subscribe to our Fixed Fee Only Financial Planning Service

Recent Posts