I am a 30-year-old engineer working in a PSU. I have a LIC Jeevan Anand traditional insurance plan in my portfolio from 2009. I am paying an annual premium of ₹15,886 for a sum assured of ₹5 lakh for a 30-year tenure. As of now, it has yielded a vested bonus of ₹1.17 lakh. I intent to weed out this traditional plan from my portfolio. Is it advisable to surrender the policy as it may yield me only around ₹45,000 on breaking the contract.
- Nagaraj.R
LIC Jeevan Anand is a combination of endowment assurance and whole life plans. You can read more about the policy here:
Costly Life Insurance Policy
Consider Surrendering your LIC Jeevan Anand Policy
Plans that combine insurance and investment are neither a good investment option nor do they provide adequate insurance cover. It is better to book losses now, as there is no point in continuing with a bad investment.
However, you should assess your life insurance needs before surrendering the policy. If you don't have an adequate life insurance cover, you should buy a large insurance cover to safeguard the interest of your financial dependents. Go for a pure term insurance plan to cover your life. Term insurance plans help you buy a large life insurance cover as they have very low premium.
Do not mix insurance and investment needs in future. Always opt for a term insurance plan to buy a life insurance cover and invest in equity mutual funds to achieve your long-term financial goals.
This article was originally published on November 23, 2015.
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