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Can I buy Jeevan Anand for retirement?

It is always better to keep your investment and insurance needs separate. When you mix them, you end up with a small life insurance cover and an inferior investment product

How is Jeevan Anand policy? Is it good from retirement perspective with an investment horizon of 15-20 years?
-Anuj

It is never a good idea to buy an insurance product like Jeevan Anand for investment purpose. Endowment plans like LIC's Jeevan Anand are costly, they also have various charges and they mostly offer modest returns. In fact, the returns from endowment policies generally do not even beat inflation. That is why it is always better to keep your investment and insurance needs separate. When you mix them, you end up with a small life insurance cover and an inferior investment product.

For example, a 25-year-old male will have to pay an annual premium of ₹1.36 lakhs for a ₹25 lakh life insurance cover for 20 years in an endowment plan. The same person can buy a life insurance cover of ₹1 crore by paying an annual premium of ₹15,000 in a term plan. If the person invests ₹1.21 lakh (₹1.36 lakh minus ₹15,000) per year in an equity mutual funds, he would accumulate ₹97.65 lakh at the end of 20 years. An endowment plan, on the other, would have offered around 5-6 per cent returns and he would have got around ₹47.18 lakh (at 6 per cent) at the end of 20 years.

That is why we always recommend pure term insurance plan to buy an adequate life insurance cover and equity mutual fund scheme to achieve long-term financial goals. If you are a new comer to the stock market, choose a top-rated balanced scheme and start investing every month via a monthly Systematic Investment Plan (SIP). If you are familiar with the stock market, you can invest in a diversified equity scheme. You must continue with your SIP investments irrespective of the market conditions. This will help you to average your purchase cost and enhance your returns.

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