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Discontinuing Jeevan Anand

Converting the policy into a paid-up policy will lock your money for the term of the policy

My son has bought a Jeevan Anand Policy in 2012. He has been paying annual premiums for the last three years. He wants to discontinue paying the premium. If he does that, will he get back the money he has paid so far after the policy term is over. Please advise.
- Jayaram Jangal

LIC Jeevan Anand policy is an endowment plan that has both insurance and investment element in it. Converting the policy into a paid-up policy will lock your money for the term of the policy. The paid up value will be paid out at maturity or on death claim. You can contact the insurance company to find out about the paid up amount. Compare it with the surrender value to arrive at an informed decision. Since you have paid premiums for three years, there will be guaranteed surrender value of 30% of the premiums paid minus the first year's premium. Make sure you compare the returns with a bank savings account interest for further clarity. Such insurance-cum-investment plans typically offer a very small insurance cover and they also offer very modest returns. Though you will make losses on surrender, it is not wise to continue investing in a bad product.

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