Should I surrender LIC Jeevan Anand plan and buy a term plan?

I bought LIC Jeevan Anand in 2006 and am paying ₹25000 per year. Should I surrender it now and instead buy a term insurance? Or should I continue it and get a term insurance as well?
-Pramod

LIC Jeevan Anand plan is a combination of an endowment and a whole life plan. It covers you against death throughout the lifetime with a provision of paying a lump sum amount on survival and at the end of the chosen term.
These policies are costly and lacks transparency as well. Returns on these type of policies do not generally beat inflation. If you compare it with a bank fixed deposit, the fixed deposit will give you better guaranteed returns. These policies have not given returns beyond 5-6 percent in the past and it is less likely that it will give more than this in future.
You can therefore consider surrendering this policy. You will incur a loss, but it will save you further losses. After three years, Jeevan Anand offers a surrender value of 30% of the premiums paid minus the first year's premium.
A term plan is all that you need to financially secure your dependents in case you are gone. For your long term investment needs, you must choose diversified equity mutual fund based on your risk tolerance.
Term plans should be selected after taking into account the claim settlement ratio of the insurance company and comparing the premium offered by the insurer with its competitors. Based on these factors, Aegon Religare iTerm Plan, Max Life Online Term Plan, HDFC Life Click2Protect are recommended to you. All these plans are online term plans.
Find the premiums applicable to your age under all these policies and select the one that suits your budget. Disclose all the details while filling proposal form to avoid any inconvenience in future while making a claim.

This article was originally published on December 15, 2016.