Jeevan Rekha is a Money Back Whole Life plan. It pays 10% of basic sum assured every 5 years as survival benefit
29-Oct-2015 •Research Desk
I am 27 years old. I have a Jeevan Rekha policy (LIC). I bought it 13 years ago, with an yearly premium of around ₹18,000, out of which I get ₹50,000 back every 5th year. The life insurance cover is around ₹7.5 lakh, inclusive of sum assurance bonus. The term is for 100 years. Should I continue with it or opt for a term plan?
- Raxit Shah
LIC Jeevan Rekha is a Money Back Whole Life plan. It pays 10% of basic sum assured every 5 years as survival benefit. It also pays annual reversionary bonus, which once declared becomes guaranteed. Getting your money back when you do not need it actually erodes your capital invested. It does not make sense. It has paid annual bonus of 3.4% since 2006-07 which is too low as return. This plan does not disclose expenses and charges and bonus declaration is at discretion of the company. The life insurance cover is also very small.
You should consider buying a term plan for your life insurance need.
Try to keep your life insurance and investment separate in future. Always opt for a term plan to buy a life insurance cover and invest in equity mutual funds to achieve your long-term financial goals in life.