I bought a Jeevan Anand policy in 2011 for a sum assured of ₹10 lakh. The policy term is 21 years and my monthly premium is ₹4,235. I will get get approximately ₹21 lakh, including bonus, after 21. The returns are lower than Public Provident Fund (PPF). I was not aware of these details earlier, now I am thinking of surrendering the policy. Is it a good idea to surrender this policy now? I would loose some money if I surrender the policy now. I want to invest the same amount in PPF and a life insurance ( term policy). Please advise.
- Nuthan Kumar
LIC Jeevan Anand is an insurance plan which neither provides sufficient insurance cover nor offers inflation-beating returns. If you surrender now, you would surely make losses but it will stop putting your hard earned money in a wrong policy.The policy will pay you a guaranteed surrender value of ₹45700 rupees which is 30% of total premiums paid till date less first year's premium. The company may pay special surrender value at its own discretion. Read more about the policy here:
Consider Surrendering your LIC Jeevan Anand Policy
Costly Life Insurance Policy
It is a good idea to buy a plain term insurance and invest the rest of the money depending on your risk appetite. If you are completely risk averse, you may go with PPF. If you are ready to take a little risk, you may invest in PPF and balanced funds. For more details, read: Your first mutual fund.
This article was originally published on December 17, 2015.
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