I was recently coaxed into buying a Jeevan Anand policy (Policy term is 15 years, sum assured is ₹3 lakh, annual premium is ₹23,451). I bought it in 2012 and paid premiums for three years. Now I realize that I was made a fool and I want to get rid of this policy.
My questions are:
a) If I were to surrender at three years and the bonus rate was consistently around ₹44 per 1000 for three years, what would be the surrender value
b) If I kept the policy as paid up after 3 years or 5 years, what would I get at the end of the term
- R Saravanan
LIC Jeevan Anand is an insurance cum investment plan with low returns and an expensive insurance cover. As a long-term investment, it is unlikely to beat inflation. For more information on LIC Jeevan Anand, read: Costly Life Insurance Policy.
- You have a very small life insurance cover. It will not be enough to take care of your family's needs if something happens to you.
- On surrendering after three policy years, the insurance company will pay a guaranteed surrender value equal to 30% of all premiums paid after deducting the first year's premium. Guaranteed surrender value in your case comes to be ₹14,070. However, the company may pay a special surrender value over and above guaranteed sum.
- There is no clear information on paid up on this policy. However, a paid up policy loses all its benefits but some of the policy charges continue to get deducted throughout the paid up term. There is no point in continuing with a bad product. Surrender it and buy a term insurance plan for life insurance cover. Do not mix insurance and investment in future.
This article was originally published on December 04, 2015.
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