LIC Jeevan Anand - Need Advise

[nishi02]

Hi Folks,

I have 2 LIC policies as below and I am unsure whether I should continue them or surrender as I have got few advises saying investing in Mutual Funds would be far better. I know, expecting returns from such policies is not fare, but this realization that I have been paying for these policies diligently and considering the amount & time I invested over these years, I don't seem to see good return.

What do you think would be surrender value for these policies? And should I surrender and invest the amount as lumpsum in MF for next 10 years?

Policy 1 : New Jeevan Anand (Plan-149)
Start Year: 2011
Annual installment: 51,122
Paying term: 21 Yrs
Sum Assured: 10,00,000
Bonus Guaranteed As of today: 5,73,000

Policy 2 : New Jeevan Anand (Plan-815)
Start Year: 2014
Annual installment: 34,342
Paying term: 21 Yrs
Sum Assured: 6,25,000
Bonus Guaranteed As of today: 2,71,250

 

[Sanjay247]

Hi, I've been in the same shoes recently. How long has the premium been paid and how much time left. If it's for another couple years , then makes sense
Else exit. I was burdened with these premiums every year since my Father passed away 2 years ago. Recently, surrendered my Jeevan Anand - 815 and my sister's New Endowment Plan - 814. These both started in 2015 and 21 years of premium term upto 2035. My policies surrender situation was that I will get the capital back with almost nil growth for these policies.(0-1.5% IRR for both on surrender value). Which is still fine as I was able to calculate and plan for 10+ to 15+lac additional corpus on different scenarios considered in my calculations above the maturity value of these policies.

Use https://bekifaayati.co/pages/lic-surrender-value-calculator/ to calculate surrender value.
provides fairly accurate values. Confirm the same from your nearest branch or issuing branch before surrender.

I think it's worth closing some of them if they meet the below requirements -
a) 3 years completed
b) The returns are lower than even bank FD's of 7.5%
c) They can be redeemed with minimum
d) Even if more premiums are paid it doesn't increase the returns %.

calculate how much loss (will happen if you close now) then see when (which year money comes) - if mutual funds give 10% to 12% yearly returns if you invest now + every year 7% is inflation then what will be the value of money you will get after maturity - based on that check if it is better to close now rather than wait for maturity. This can easily be done on Excel. Calculate the Real Returns adjusted for inflation and take a call. Also consider the Additional Corpus Generated through your investing in Mutual Funds and check the difference.

You can answer for yourself, if you close them now and get only 12% year on year growth then is it still worthwhile to close them inspite of the loss rather than waiting for their maturity.

 

[zacobite]

Hi Folks,

I have 2 LIC policies as below and I am unsure whether I should continue them or surrender as I have got few advises saying investing in Mutual Funds would be far better. I know, expecting returns from such policies is not fare, but this realization that I have been paying for these policies diligently and considering the amount & time I invested over these years, I don't seem to see good return.

What do you think would be surrender value for these policies? And should I surrender and invest the amount as lumpsum in MF for next 10 years?

Policy 1 : New Jeevan Anand (Plan-149)
Start Year: 2011
Annual installment: 51,122
Paying term: 21 Yrs
Sum Assured: 10,00,000
Bonus Guaranteed As of today: 5,73,000

Policy 2 : New Jeevan Anand (Plan-815)
Start Year: 2014
Annual installment: 34,342
Paying term: 21 Yrs
Sum Assured: 6,25,000
Bonus Guaranteed As of today: 2,71,250

continue as you have already paid a lot.. its fine to be part of your debt portfolio ( not everything should be equity) as returns will be tax free and largely safe.. Dont buy anymore insurance products for savings or investment