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Is it wise to continue with LIC Jeevan Suraksha pension policy till maturity?

Though you will incur a loss, you should still surrender it and opt for better alternatives to cover your insurance and investment needs

I have an ongoing LIC Jeevan Suraksha - I policy for which I am paying an annual premium of Rs 10,182 since 1997. The policy matures in 2022. Please tell me what are my benefits on maturity in 2022 and also how much will I get if I exit the policy now?
-Satyen Vartak

LIC Jeevan Suraksha - I is a deferred annuity policy. At the time of maturity, you will have to buy an annuity from your maturity proceeds, including any bonus.

Alternatively, you will have the option to withdraw 25% of the maturity value and buy an annuity with the balance. An annuity is basically a product where you invest a lump sum upfront to get regular income for your remaining life.

We would advice you to surrender the policy as we don't believe products like this one, which combine and investment, are good for investors. To take the example of LIC Jeevan Suraksha, its bonus declarations have been around 3.5% of the sum assured in the recent years. That's poorer return than a bank FD and lower than the rate of inflation. It hasn't lived up to the return expectations one should have from a long-term investment product. And this is not unique to this policy. Most insurance policies that combine investment work out to be a poor deal for investors.

If you exit it now, you will get a guaranteed surrender value equal to 90% of all premiums regular paid excluding 1st year's premium. In your case, it will be approximately Rs 1.65 Lakh. There is also a 'Special Surrender Value' which is usually higher than the guaranteed surrender value but at the discretion of LIC. This value depends upon the duration for which premiums have been paid and the policy duration at the date of surrender. To get detailed information on the surrender value you will get, you may contact LIC.

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