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Stay away from LIC New Jeevan Anand

LIC New Jeevan Anand Review

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Regular readers of this blog already know I am not a big fan of traditional life insurance plans. I make it a point to express my dislike towards traditional life insurance plans in one way or the other. And I have fairly strong reasons.

Though I have written against traditional plans many times before, I have stayed away from reviewing specific insurance products until now. However, a number of clients who I have advised, most of them had a common product in their portfolio: LIC Jeevan Anand. When I asked why they had purchased this plan in the first place, some mentioned they wanted to save on taxes. Some gave in to the excellent pitch by the insurance agent. In a few cases, the agent happened to a close relative too. So, I thought I should break the notion and pick up Jeevan Anand plan for review.

In this post, I will focus on LIC New Jeevan Anand plan (Plan 815) because from what I learned after talking to a few LIC agents, this is the plan that a number of people are finding attractive these days. As I understand, LIC Jeevan Anand has been withdrawn.

LIC New Jeevan Anand: Review of Policy Features (Plan 815)

  1. LIC New Jeevan Anand is an endowment plus whole life insurance plan.
  2. It is a participating plan. You get regular bonuses if declared by the insurance company. Do note bonuses accrue and get paid only at the time of maturity or death.
  3. In the event of the death of the policyholder during the policy term, the beneficiary gets the 125% of Basic Sum Assured plus any accrued bonuses. Bonuses are NOT GUARANTEED. Therefore, the return is not guaranteed either.
  4. In the event of the death of policyholder after the policy term expires, the beneficiary gets the basic Sum Assured. You will find this feature in whole life policies. This is something you won’t find in term life insurance policies. We will see later if this feature is beneficial.
  5. On Maturity, you get the Basic Sum Assured plus the accrued bonuses.
  6. Income Tax Benefits: The premium paid qualifies for deduction under Section 80C of the Income Tax Act. You must pay the premium for at least two years otherwise the tax benefits under Section 80C will be reversed.
  7. Maturity amount is exempt from tax if the annual premium is less than 10% of basic Sum Assured. With LIC New Jeevan Anand, this won’t be a problem.
  8. There is a rider for Accidental Death and Permanent Disability that you can purchase for payment of additional premium. However, most term life insurance plans offer these riders.
  9. If you want to surrender the plan for any reason, there is a heavy penalty involved. You won’t get anything back if you have paid the premium for only two years. In the third year, you will get only 30% of premium paid and accrued bonuses. You can make the policy paid up after you have paid the premium for three years.

What are the problems with Jeevan Anand?

#1 Inadequate Insurance

Any insurance product must first provide adequate insurance. For a 30-year old, the annual premium for Rs 50 lacs cover comes out to Rs 2.21 lacs. You can check out LIC Premium calculator on your own. There are two questions that you need to answer. Is Rs 50 lacs enough? Can you afford Rs 2.21 lacs per annum?

Whether Rs 50 lacs is enough to take care of your family is something you need to decide. Try out life insurance calculator if you have any doubts.

Moreover, you need to see if you can afford such high premium. Your premium affordability does not determine your life insurance requirement.

Ideally, you must determine the life insurance cover you need and subsequently purchase a plan that you can afford. Unfortunately, most of us take the opposite route. We pick up a plan first and choose the premium that we can afford and are content with whatever life cover that comes with that premium. Hence, your premium affordability ends up determining your life cover. Sounds stupid, doesn’t it? In fact, that’s how a number of agents start their pitch. “How much do you want to invest?”

If you have only Rs 1 lac to invest per annum, you will settle for a lower Sum Assured (life cover) of say Rs 20 lacs.

On the other hand, if you had opted for a term cover, a 30-year-old male could have purchased life cover of Rs 1 crore for an annual premium of Rs 7,000-10,000 per annum. The remaining amount can be used for investments.

For a young family, you must first get your insurance cover right and then think about investments.

#2 Low Returns

LIC New Jeevan Anand is a participating plan. You will be fortunate to get returns in the range of 4-6% per annum. Please note the returns are not guaranteed. LIC declares different kind of bonuses every year and these keep getting added to the maturity value. I wouldn’t go deep into mathematical analysis. For the same, you can go through this post. Say No to Traditional Life Insurance Plans. PPF currently offers 8% per annum. A mix of term insurance and PPF investments will give better insurance coverage and returns. 

The cost structure of traditional plans is opaque. These are like a black box. Difficult to assess the methodology used to declare bonuses. I used the benefit illustration on the LIC website to get an idea of returns for New Jeevan Anand. On the website, if a 30 year purchases a cover of Rs 1 lacs for 35 years, the maturity value shall be Rs 2.81 lacs. Annual premium before service tax is Rs 3,165. The Assumed gross investment return is 8% p.a. If you calculate the internal rate of return, the return comes out to 4.61% p.a. You can see the return of 8% on invested funds gives you a return of only 4.61%. I hope you get the idea about the heavy cost structure. If you had opted for Sum Assured of Rs 10 lacs, the return would have been slightly higher at 5.07% p.a.

Note that your returns will be lower if your age of the time of purchasing the plan is higher.

Read: Which is the best Term Life Insurance Plan for you?

#3 Exit is difficult

If you want to exit the plan for any reason, you will have to pay a heavy penalty, at least in the initial years. In fact, if you surrender after paying the premium for two years, you won’t get anything back. In the third year, you would get only 30% of the premiums paid and accrued bonuses back. If you have paid premium for at least 3 years, you can make the policy paid up. If you have a traditional life insurance plan and are not sure what to do, go through this post. Life Insurance: Continue or Surrender or Paid-up 

#4 Marketing Gimmicks

Offering 125% of Basic Sum Assured is a pure marketing gimmick. So, if the Basic Sum Assured is Rs 50 lacs, LIC will pay the beneficiary at least Rs 62.5 lacs in the event of death during the policy term. Bonuses will be extra. Please note payment of bonuses will be linked to Basic Sum Assured only. After the expiry of the policy term, the beneficiary gets only Basic Sum Assured in the event of the death of the policyholder. Such small things make for an excellent sales pitch. You are paying a premium for Rs 50 lacs and getting cover for Rs 62.5 lacs. Risk underwriting teams are smart enough to price the product accordingly.

#5 Coverage after the Policy Term

I agree that the feature of life cover even after the expiry of the policy term is good. However, if you have planned your investments well, there is no need for life cover after term expiry.

You need to go back to the basic question: Why you need life insurance in the first place? You purchase life insurance to bridge the gap between your net worth and the amount required to meet all your financial goals and liabilities. Suppose you are 30. I would expect that by the time you retire, you would have already bridged the gap. Once you have the money to meet all your financial goals and liabilities, you don’t need life insurance anymore. In such cases, I would suggest you invest to increase your net worth rather than paying life insurance premium.

Read: HDFC Life Sanchay Plus: Review: The Good and The Bad

When can plans such as LIC New Jeevan Anand come in handy?

Term insurance is the cheapest form of life insurance. Under term insurance, you purchase pure life cover. There are no investment benefits.

However, if you have an ailment that jacks up your annual life insurance premium by a significant amount, you may find term life insurance plans a bit too expensive. In some cases, the insurer may even decline to issue the policy altogether.

Under the amended Insurance Act, life insurance companies cannot reject claim if your insurance plan is 3 year old. Therefore, you can expect life insurance companies to be extra careful in issuing high Sum Assured term policies now.

Packaged insurance products (such as traditional plans or ULIPs) follow relaxed underwriting norms. So, in such cases, you may find it easier to purchase insurance traditional insurance plans or ULIPs. I am not saying you will get these plans easily or without any medical tests. Just that you will find it easier to get covered under LIC New Jeevan Anand than a pure term plan.

Read: How Rs. 3.2 lacs became Rs 11,678 in 6 years?

Should you invest in LIC New Jeevan Anand (815)?

I have no special dislike for LIC New Jeevan Anand. In my opinion, you must stay away from any traditional life insurance plan. LIC New Jeevan Anand (Plan 815) simply happens to be a traditional life insurance plan. I picked up the plan for review because I thought this is one plan most of the readers would relate to. And LIC is not the only one offering such policies. Even private insurers such as ICICI Prudential offer such plans. You must stay away from all such plans.

In general, keep your insurance and investment needs separate. Purchase a term life cover for your life insurance needs. Term Insurance remains the best form of insurance. It provides you adequate life cover at a low cost. For your investment needs, you can pick up something based on your investment horizon and risk appetite. For instance, for long term goals, equity mutual funds will be best suited. Alternatively, if you are not comfortable with mutual funds, you can look at PPF.  A combination of term plan and PPF gives you all the tax benefits of a traditional insurance plan. Moreover, the combination will provide you better life cover and investment returns.

I do not deny I have a bias against these traditional insurance plans such as LIC New Jeevan Anand. I have tried to explore if these plans can add value to your insurance and investment portfolio but I have never been able to see any value in traditional life insurance plans. LIC New Jeevan Anand is no different.

What do you think?

Additional Links/Review of other plans from LIC

  1. LIC Jeevan Shanti: A Single Premium Annuity plan: Review
  2. In traditional life insurance plans, your age affects your returns
  3. LIC Jeevan Shiromani
  4. LIC New Money Back Plan-25 years
  5. LIC Children’s Money Back Plan
  6. LIC Jeevan Tarun (Don’t invest in this plan for Children’s education)
  7. LIC New Endowment Plan
  8. LIC Jeevan Labh
  9. LIC Bima Bachat
  10. LIC Jeevan Umang
  11. LIC Jeevan Utkarsh
  12. Problems with Endowment Plans

364 thoughts on “Stay away from LIC New Jeevan Anand”

  1. Deepesh, I partly disagree with your review. This blog has not helped to provide concrete answers to why one must not take a New Jeevan Anand plan. It looks like you yourself are half minded-ly agreeing that this is not a good investment and insurance option. However for a common man, (I mean a lower middle class to a middle class) this is one easily available product which helps to cover insurance, investment and tax savings without burning his hands.

    When one doesnt have to think too much to invest, NJA provides a good option.

    1. Hi Venkitesh,

      We can always agree to disagree. I have shown detailed calculations about why you should not go for traditional plans in my post “Say no to Traditional Plans”. Didn’t want to repeat the same set of calculations. Hence, merely provided a link to it in this post.
      Based on my analysis, traditional plan are neither good insurance products nor good investment products.

      For common man, there are better options in insurance, investment and tax-savings.
      One of the purposes of this blog is investor education. To help readers make better financial decisions. That’s the reason why I wrote this post. So that readers can take a better informed view.

      Ignorance can never be an excuse for making poor financial decisions.

      If you feel there is something that I need to add to this post to help bring my point better, do let me know. I will incorporate in this post or in one of my subsequent posts.
      Alternatively, if you have strong reasons for why New Jeevan Anand is a good plan, do write to me. I wouldn’t happily acknowledge my mistakes and form a different opinion.
      Appreciate your feedback.

      1. I have purchased new jeevan anand with 70,000 yearly in 2015.
        I paid 87,000. should i go for 3 year or give up…..???? plz ans me

        1. Dear Rahul,
          As I understand, you are paying quarterly premiums.
          What is the tenor of your New Jeevan Anand plan?
          The answer is likely to be surrender.

      2. Hi Deepesh,
        I have a problem which I want to share regarding JEEVAN ANAND table 149.
        I purchased this in 2005 at the age of 35 years for 21 years. Annual premium I am paying is at INR55 thousands. At present, I completed 12 installments. after reading your article I am realizing, I should stop further investment. I have few questions,
        1. Should I withdraw end of 12 year that is 2017 December
        2. How much I will get back approximately?

        OR

        3. Should I continue having the insurance alone and stop paying the premium.

        Please suggest, I am realizing, I am wasting my hard earned money

        thanks in advance,
        Sreenivas

    2. Krishna mohan gupta

      Appriciate your effort explaining the jeevan anand. But while caluculating the maturity it seems you have added only bonus part and you ignored to add the loyalty additions which will be paid at the time of maturity.As per the experience of LIC a 1 lakh jeevan anand with 35 yrs term policy for age 30yrs may deliver INR 553000 maturity at the end of the term. Verify this with any policy holder who had purchased the policy and got maturity. Or even you can get this info in any one of the Thousands of branches in inda. Before posting any thing plz do proper research and post.Bring to ur notice that bonus and loyalty addition declared by LIC are guaranteed by GOVT OF INDIA incuding basic sum assured.

      1. Deepesh Raghaw

        Dear Sir,
        Please understand I have nothing against LIC. I have issues with only traditional life insurance plans, which are issued by LIC and private companies alike.
        Btw, can you please share with me the returns that a 35 year old purchasing Jeevan Anand (Rs 1 lakh sum assured) will get?

        1. I have taken Jeevan Anand with premium of 125000rs for myself..For 25 years…Now they are saying I will get 70lac at maturity…This when I calculate is around 6.1 percent tax free…So not bad based on current rate..And also I am getting insurance which I know is very small but still…please can you tell if Iam missing anything…As 70lac calculation done by LIC office also…

          1. Deepesh Raghaw

            Hi Chanchal,
            Rs 70 lacs is not sacrosanct. jeevan Anand is a participating plan. So, the maturity amount depends on the bonus announced every year.
            Secondly, my calculation suggests the return will be 5.7% p.a.
            More importantly, you need to see if 6% return is enough for a long term investment.

          2. Vishal Jain mathura

            Sir I taken a Jeevan anand policy in 2013 but I paid only two premium what can I do about this policy

    3. The article is well written. The insurance agents do not clearly explain at the beginning the difference in investing in a endowment plan such as Jeevan Anand and a pure term plan. I had taken Jeevan Anand in 2006 with a maturity date 2022. Now I realize that I might be better off to take a pure term plan with a higher sum assured and much lower premium and then invest balance into a mutual funds.

      Currently as per my calculation, I am hardly getting 4% interest in this policy. I do not see any specific target family class who will be interested in this. Only people who blindly trust the agents invest in this.

  2. Nice article. I have just started learning and investing and am finding your site very useful.

    Unfortunately,I have an old LIC Jeevan Anand plan that I started in January 2012 owing to my ignorance and the lic agent being a distant relative. My premium is 1.15 lakhs per year for 15 years.

    I believe I should cancel this plan and take an LIC term insurance. Do you know if it’s possible to switch plans? Or how much do I stand to lose by canceling this plan?

    Thank you.

    1. Thanks. Glad you liked the post.
      As I understand, you would have already paid 4 premium installments worth Rs 1.15 lacs each.
      If you are looking for numbers, you can directly approach the agent (your relative) or the nearest LIC branch to find out the surrender value. I will only give an approximate number. They will give an exact answer.
      Don’t jump to any conclusion right away. Find out the surrender value first and then you can take a decision. There is a post on my website about Surrender or Continue or make the policy paid up. You can go through the post. Will give you some idea about how to approach the problem.

      You cannot switch plans.If you want to purchase term insurance, you will have to purchase another plan
      If you surrender, you will lose a significant amount. No question about that. As mentioned before, don’t jump to conclusion, find out the amount and take a decision subsequently.

      1. Thank you. Yes, I saw that post immediately after I posted this. I will read that post again in detail tomorrow. But the “paid up” option sounds promising.

    2. Hold on …. What he said is half baked.. Jeevan Anand is a good policy where policy holder gets returns and also risk coverage will continue after maturity. In any case of insurance, contract between insured & insurer will be upto maturity or any unforeseen happens . But here risk will be covered even after maturity.

      1. Let us take an illustration, If the risk cover after maturity is of Rs 10 lakhs and the term being 25 years. What do you think 10 lakhs will be equal to after 25 years? The inflation adjusted value won’t be more than 2 lakhs after 25 years. I myself got into this trap but luckily I decided the very next day after paying the first premium to avail Free look Up period. I am hoping that my 2 months premium shall be returned.

  3. I m just a beginner as i started earning very early a age when most people r glued to their studies.i found changes in d temprament in a particular flock of d folks around me.many started approaching me to buy their insurance products mostly d agents from lic.at times i was distressed and burdened over by deir biased talks cos it involved neighbour and relatives aswell.
    I find ur ideas to b quiet healthy and informative inorder to take a impartial decission.thanks a lot for d guide which lead to a narrow escap from the trap indeed

  4. I have a New Jeevan Anand Policy. Sum assured is 12,00,000 for 25 years. I have paid for 1 year (Rs. 52999/annum). Now I have idea about term insurrance, PPF, Mutual funds. I want to discontinue LIC policy. please advice me what to do as i have paid for only one year.

    1. Deepesh Raghaw

      Discontinue the policy and purchase adequate life cover through a term plan.
      Please note tax benefits if taken in the previous for premium for this plan will be reversed.

      1. i want to know that whether i discontinue the policy, surrender it after 3 years or make it paid-up. What do you mean by reversal of tax benefits

      2. Dear!!!

        Great to see your opinion on term inaurance policies and traditional plan. In this context i would like to say in india almost 70% term policies lapses within 10 years….people think that we ate not getting anything on maturitu, cheaper new plan available, grace period lapses…but as the age grows he may be eligible due to various reason age, health and other eligibility…in india traditional os best investment at hogher age to protect the corpus.
        Only market base investment is not the solution to invest.

        India me PM Ya FM ko kaashi bhi aaye to market 1000 points gir jata hai..market is not growimg on fundamental..it is just a gambling amd we cant put all hard earmed money on gambling.

        1. Dear Manoj,
          I agree with you. Excess of everything is bad. Having 100% portfolio in equity is a poor choice too.
          However, equity investments are not akin to gambling.
          Yes, equity markets can be tricky and one would need much greater discipline to make money in stock markets.
          But yes, gamblers can gamble anywhere. I agree, for gamblers, traditional plans are a better choice than stock markets.

      3. Sir, last year I started LIC new jivan aanand for 16 years the sum assured is around 3- 4 lakh and the yearly installment is around 24k.

  5. Excellent and very meaningful articles. I am one of those guys who got in to this useless new Jeevan Anand with a very high maturity value. As you have mentioned, its a very emotional decision to surrender and get back nothing. Please suggest if it is a good option to make it to a paid up policy

    New Jeevan Anand – 35 years (15 policies in total maturing from year 21 till 35)
    Quarterly premium – 92000 (Yes, ninety two thousand)
    number of payments made so far – 9
    to make it as paid up policy, i need to make 3 more payments.

    My current plan to is to make payment for 3 years and convert this to paid up policy. please advise. (I dont get any tax benefit under 80C as my PF and other savings helps me to reach 2L)

    1. Deepesh Raghaw

      Hi Guru,
      Thanks Guru. Am glad you liked the post.
      That is some serious amount.
      Without going too much into mathematics, making it paid-up appears a wise decision.
      Just one thing, purchase a term plan before you surrender so that you are always adequately insured.
      Please do share with friends and family.

  6. Thanks a lot for your quick reply. I have already got a term policy for the same sum assured. Will start with the PPF + Mutual fund for the balance amount once i make it as a paid up policy. Should i contact the agent and convert this as paid up policy of it becomes if i stop paying after 3 years.

  7. Which is the best Term insurance policy. I mean, which company has better claim ratio
    Which company has better rate for term isnsurance

    1. Deepesh Raghaw

      I will have to check that. Not sure if stats are available for only term insurance.
      LIC is likely to be the best in term claim settlement but I don’t know if that applies to term insurance too.
      There is no such thing as best term insurance plan. Purchase from an insurer you are comfortable with.

  8. Hello Sir,

    I am 28 years old working professional. I don\’t have any policy or insurance.

    I am looking for investment. Please guide me for the same.

    Thank you

  9. Hi,

    I have made the same mistake of buying the old Jeevan Anand policy. I purchased it in July 2011 with yearly premium of 1 Lac for the term of 21 Years. I have been paying all the premiums till now i.e. for 4 years and 8 months. I am now thinking of converting this policy to paid up. I want to know the repercussions of this move. Please direct me to all the terms and conditions of paid up.

    Thank you so much.

    Regards
    Meenakshi

    1. Hello

      Don’t make any decision with a single article. if u r paying Rs. 100000 for Jeevan annad for 21 yr. It mean u r holding a S.A. of more then Rs 20 lacs Approx. in maturity u will get approx 42-45 lacs and after u having the Risk Cover of more than 20 lacs after maturity

      but in PPF u will not get anything like that. ppf is safe investment but no risk cover,
      in history of term insurance the ration of lapsation is very much higher than inforce policies

      so continue ur policy

      u will get good returns

  10. Sir,

    I have just recently purchased the LIC New Jeevan anand Policy for 20 years term. My annual premium is nearly Rs.56000/- . Just come to see that it is not much useful plan. Shall I withdraw it since the plan purchased last year? Can u suggest any new plans for me?
    Am working professional and can able to pay 50-60k annually.

    Thanks,
    Rajasekar.V

    1. Dear Rajasekar,
      Since you mentioned in your other comment that you purchased last week, don’t throw good money after bad.
      Let it go. Do not pay further premium. You can’t withdraw the amount. You will have to forgo the premium paid.
      Purchase any term plan.

    2. Hi Rajasekar, am planing to purchase same plan (20 years and 56000). could you please tell me why this is not good plan. And if know good plan let me know. I know mostly these plans had many restrictions when we need to withdraw.(sometime will get 0 also).

      1. Deepesh Raghaw

        Hi Ramesh,
        Don’t purchase the plan. In this post, I have argued why you should not purchase the plan.
        I suggest you purchase a term insurance plan. Even though you will not anything in return at the time of maturity, you will get much larger cover at a very low price.
        If you want to find out the best term insurance plan for yourself, you can go through the following post.
        http://www.personalfinanceplan.in/insurance/which-is-the-best-term-insurance-plan-for-you/

        Remaining amount can be invested in mutual funds, PPF etc.

  11. Hi,

    Thank you for the response. I wanted to know if the life cover will still be there in paid up ?

    Regards
    Meenakshi

  12. I had taken Jeevan Anand, in 2005 with Annual premium of Rs. 24590. I am paying premium sincerely, since inception. Now accumulated bonus + premium paid is Rs. 4,89,000, which is around 90% returns overall.
    Late day of payment lies in 2027. Should I continue to pay the same or exit?
    Secondly, how much returns I get after last day of payment i.e 2027.
    Pl. advice

    1. Deepesh Raghaw

      Can’t comment about the returns.
      Since you have already paid premium for half the term, it wouldn’t be much benefit surrendering the plan now.
      You can continue or make the plan paid-up.
      Consider the plan as part of your debt portfolio.

  13. Mene 1000000 lac ki jivan aanand policy karwane par muche kya profit hoga v 21 years bad kitni rashi papt hogi v ise band karwate par kitni rashi mil sakti h 2.5years m

    1. Deepesh Raghaw

      Dear Amar,
      You wouldn’t get more than 4-6% p.a. return.
      If you have not purchased the plan yet, don’t purchase it.
      Purchase term life cover and invest the remaining.
      Jeevan Anand has high surrender charges. You wouldn’t get much back if you exit after 2.5 years.

  14. Pankaj Bhardwaj

    Mr Deepesh
    Hai

    After reading your analysis. I may be agree with you. bt Please tell me what is the best policy in the market for pension plan only for the pension plan whetherit is govt. or private but must be genuine.

    Regards
    Pankaj

    1. Deepesh Raghaw

      Dear Pankaj,

      Think you can do better without a pension plan. Accumulate retirement corpus on your own.
      Think about purchasing an annuity plan when you are close to retirement or have retired.

  15. Dear Sir

    Thank u for your response pl. also tell me about Click to invest policy by HDFC,is purchasing a online policy is safe from HDFC or other branded private bank
    and at last what is overall best policy for a person age 40 year not coming in tax category want to get maximum return at low premium at the age of 60 so that he can continue live a peaceful life further. if he alive beyond 60 year.
    Regards
    Regards

  16. Hi Deepesh

    I have a LIC Jeevan Anand policy of 8Lakhs which i took in 2011, I am looking to surrender the policy and invest the same money into a PPF account since I already have 50L Term Insurance.

    can you please let me know if it is better to close the LIC at this time?

    thanks
    sravan

  17. prakashchandrajput9@rediffmail.com

    Dear Deepesh,
    I want to invest 1 lac per annum ,will u suggest me that which plan is better for me,i have 2 daughter one is 3 year old &sec. one 6 year old, for their better future kindly suggest………

  18. i want to know that whether i discontinue the policy, surrender it after 3 years or make it paid-up. What do you mean by reversal of tax benefits
    please suggest any good term insurance plan

    1. Deepesh Raghaw

      What is the term of your plan?
      You must have got tax benefits for investing in Jeevan Anand under Section 80C. Those benefits can be reversed if you do not pay premium for two years. Reversal means the premium paid in the previous years will be added to the income of such previous years and taxed accordingly.
      In your case, you have paid for three years. Hence, no reversal of tax benefits.
      Pick up any plan. Opt for insurance company you are comfortable with.

  19. My friend is not getting term insurance due to some ailments. He is 35years old. What insurance cover he should get? Where he should invest?

    1. Deepesh Raghaw

      Dear Gaurav,
      Difficult to comment without knowing the exact nature of ailments.
      However, he can try ULIPs or traditional life insurance plans.
      Do not hide anything from insurance company in order to get life insurance issued.
      These products follow slightly relaxed underwriting norms and hence may issue life insurance to your friend.
      Investment must be goal based. Equity heavy portfolio for short term goals and debt heavy portfolio for short term goals.

  20. I disagree with wat u r calling a return of 4-5%. I have purchase aplan for 21 yrs, with sum assured of 7 lakhs, maturity value will be around 15 lakhs, this brings a return of 4-5%. Since, premium is 37000.
    & then, there will be a payout to my hiers in case of death after maturity. Its beneficial in that sense.

    My current age is 21.5 yrs.

    1. Deepesh Raghaw

      Hi,
      We can always agree to disagree.
      With traditional life insurance plans, it is not easy to justify.
      Let’s take your example. In your case, the return is around 5.6% p.a.
      Now consider this.
      Purchase a term plan of Rs 1 crore. At your age, it would cost around 7,000 per annum. You need to think if Rs 7 lacs of Sum Assured will suffice for your family if you were not around. I doubt that.
      Now, for the remaining 30,000. Let’s say you invest Rs 2,500 per month in equity funds.
      At 10% return, you will end up with Rs 21 lacs after 21 years.
      At 12% return, you will end up with Rs 28 lacs after 21 years.
      Even with the safest PPF, you will end up with around Rs 16 lacs (at 8%).
      Ofcourse, nothing is guaranteed in mutual funds but the equity funds have provided such returns in the past.
      So, you get greater life cover and most probably better returns too.

  21. Hi Deepesh,
    Thanks for a fine article which throws good light over the traditional policies.Actually a LIC agent had been chasing for quite some time .I also found it worthy to invest in an insurance plan and hence finalised New Jeevan Anand-II.It is for 16 years sum assured is 10L+10L and the yearly premium is 78K.

    After going thru ur article I am planning to cut it down to 5L+5L sum assrd with the annual premium of 39K. At the same time am thinking in investing in some term insurance.Will this be okay according to you?

    1. Deepesh Raghaw

      Hi Pranjal,
      You are welcome.
      I would advice against purchasing the plan.
      Please go through other comments on this post.
      You are right. Purchase a pure term insurance and invest the remaining in mutual funds or any other product as per your requirement.

  22. Hi Deepesh,
    I accidentaly landed in this website and its been a great learning opportunity for me. I was about to purchase LIC New Jeevan Anand Policy but after reading your article I put that on hold. Thanks to you Deepesh, now I am learning more on the subject.

    I am 30yrs old,unmarried, GOvt servant already has PLI endowment cover of 10lakhs(Policy till i am 60years old). Now I have decided to buy Term insurance of 1 cr cover which covers my insurance part. For investment purpose i am investing in PPF annually around 1 lakh. Do you suggest to diversify/ build my portfolio into mutual funds, which has inherent risk in it. Please advice on how to build good investment portfolio for monthly income 50K. (Being govt servant I am already investing monthly 10K on NPS which is compulsary for us)

    I must thank you again for helping us because even though most us are educated but when it comes to financial decision we make BIG mistakes. You doing great job buddy!!
    Regards

    1. Deepesh Raghaw

      That’s great Harsha.
      Please do share the post with friends and family.
      In Govt NPS, exposure to equity is quite limited. PPF is a pure debt product.
      You must diversify. You are quite young. Would suggest you add equity mutual funds to your portfolio.
      It seems you have not invested in equity products before. Start with balanced funds.
      Risk and reward go hand in hand. At a young age, your ability to take risk is higher. So, make a small start with balanced funds.

    2. i have jevan anand policy paid 3 year last 2 year not paid person death ,premium is yearly 14995 assumed amount is 175000 today how much amount to return full assumed value return or not?

  23. Meghraj Sharma

    Could you Please suggest any 5 Equity and 5 MF for Balanced Investment.

    Thanks,

    I am also suffered from New Jeevan anand. two year completed for premium payment.

    1. Deepesh Raghaw

      You are welcome, Meghraj.
      You don’t need 10 funds to make a balanced portfolio.
      You can do with just two or three funds. Alternatively, just pick up a good balanced fund.

  24. LIC has minimum uncertainties Mutual fund have greater .Than why you are arguing in favour of Equity.I manage a diverse folio with PPF,RD,Equity,Lic,FD and NPs for one particular year for 500000.As next year i would not able to get that money i would do NPS for 6000 only.This year my purpose is Fulfilled.

    1. Deepesh Raghaw

      Dear Anshu,
      This post is not about if equity funds are good investments.
      It is only about how New Jeevan Anand is a bad investment.

  25. Thanks for your reply.New Jeevan Anand investment is bad but what is the way out for people who can manage to invest 2 lakh in LIC.

  26. Dr Mallikarjuna-UAE

    Nice article Mr Deepesh.
    Similar to other friend, I also landed here forrtunately.
    I was fool who bought LIC JV for very I SA. Paid 3 premiums so far. Now i realised to have one 3-4cr term plan. Invest remaining equally in MF, stocks, PPF and FD
    You and similar thinking guys are opening the eyes of financial illiterates.
    I am planning 2 term plans. One from LIC e term plan (because its state run) 2nd mostltli icici prudential i protect. Any inputs?

    Thanks.

    1. Deepesh Raghaw

      Thanks Dr Mallikarjuna!!!
      Appreciate your kind words.
      Even I had purchased a traditional life insurance plan many years back and still hold it. I didn’t exit earlier and now it makes sense to continue.
      Think it makes sense. Just one thing, do check if you need an income replacement term life insurance plan.
      You can find more about this in the following post.
      http://www.personalfinanceplan.in/insurance/income-replacement-term-insurance-plans-you-may-need-one/
      Please do share the posts you like with friends and family.
      Good luck!!!

      1. Dr Mallikarjuna-UAE

        Hi,

        You are correct as spouse will be unaware of what to do with lumpsum money if she get. 50% lumpsum and rest 50% monthly/annually will be good idea.

        One more thing-both hubby and wife should know details of the investments.

  27. Hi

    My husband age is 32, and he don’t have any insurance plan though he make regular saving in our PPF account, so can you suggest the future investment should in insurance or something else

  28. Hi thanks for your detailed post. Your post is about New Jeevan Anand (plan 815). I was guessing if your post eqqually applies for old Jevaan Anand (Plan 149). I had old Jeevan Anand. My agent gave me very detailed quotations. I have uploaded the quotation on my dropbox:

    I paid only one premium, but then reading online I felt as if the policy is not that good. So I discontinued it. Now I got a revival notice from LIC saying better bonus accrued. My agent also called me back saying try reviewing quotation, the new policy is not that good, but old one is just fine.

    I am trying to evaluate it only in terms of returns, not life cover (though I know facts like I should not mix investment and lifecover, since I just want to give it a try to know, say, how it fairs against FDs).

    My yearly premium is Rs. 26289. On this amount I will save tax of Rs. 7887. So net premium is Rs. 18402. If I take 7.5% annual returns quarterly compounding with zero initial investment and if I create one FD every year for 20 years, on 20th year I will get 8.7L on FD of Rs. 18402 and 12.5L on FD of Rs. 12.5L (LESS TAX). Calculations can be seen in this screenshot:

    Now with the policy I will get 9.65L at the end of 20 years as can be seen in quotation. (I will also get 5L when I am 100 years old, which I am ignoring since I cant see how much actual value will be considering inflation).

    As per quotation the policy gives 8.53% returns considering tax benefits. Isnt it good? Should I revive this policy? Or am missing something? Does it fair good against popular tax saving options such as PPF, EPF (which also offer 8.0+ interest rate)? Can you please guide?

    1. Deepesh Raghaw

      Hi Mahesh,
      Since you have paid the premium for just one year, let the policy lapse.
      Detailed spreadsheet analysis will also throw up the same conclusion.
      An LIC agent calls and says “New one is bad. Old one was good”. This is suspicious enough.
      You must have asked him the number of New Jeevan Anand plans he has sold.
      If return is the only concern, PPF is far better than Jeevan Anand.

  29. Hi Deepesh,
    Thanks for the wonderful post.
    I have an LIC Money Back Policy for 20 years, premium of Rs.31195 paid Annually which i took in 2006.
    So far i paid 10 premiums till date, i.e total amount of 311950.
    I received cashback of Rs.1 Lakh in 2001 and another Rs.1 Lakh in 2016.
    Now i want to stop paying the premium as returns are very low at the end of maturity period.

    I checked with LIC customer care and they said if i stop paying premium now, i would get Rs.195000 at maturity period and if i surrender, i would get Rs.91533

    Could you please advice if this is a good option to make it a paid policy by not paying premium amount or should i continue with the policy by paying the premium for next 10 years till maturity or surrender now.

    1. Hi Deepesh,
      Forgot to mention in my previous post that Sum Assured is 500000.
      After every 5 years, Rs. 1 Lakh is given as money back.
      So far received amount 1 Lakh in 2011 and 1 Lakh in 2016.
      Annual premium of 31195 paid from 2006 till 2015 for 10 years.
      Vested bonus till date is Rs.175500.

      Please advice.

      1. Dear Laxmi,
        You are welcome. Will appreciate if you share the post with friends and family.
        What is the premium payment term? How many more premium installments to be paid?
        As I understand, at maturity, you get 40% of Sum Assured + Vested Bonuses + Final Additional bonus
        40% of 5lacs = 2 lacs. You already have 1.75 lacs of vested bonuses. You will get more bonuses in the coming years.
        So, the maturity amount should certainly be more than Rs 1.95 lacs that you have been told.
        With traditional life insurance plans, it makes sense to surrender early. If you have continued for a few years, then it may actually make sense to continue till maturity.
        Most likely, my answer will be to continue. However, you share the requested information. I will get back to you.
        Suggest you go through the following post.
        http://www.personalfinanceplan.in/insurance/life-insurance-continue-or-surrender-or-paid-up/
        Additionally, there is a post that I had done on LIC New Money Back plan (and not LIC Money back plan). Suggest you go through the post.
        http://www.personalfinanceplan.in/opinion/lic-new-money-back-plan-provides-guaranteed-poor-returns/

        1. Hi Deepesh,

          The policy is The Money Back Policy – 20 Years, Premium Payment Term is 20.
          I need to pay 10 more installments, i.e 31195 yearly from 2016 to 2025.

          1. Dear Laxmi,
            I assume you will get Rs 1 lakh at the end of 15th year and around Rs 5.5 lacs at the end of 20th year.
            5.5 lacs = 2 lacs + 1.75 (already accrued) + 1.75 lacs (assume that these will accrue in another 10 years).
            Please do point out if there is anything wrong in these assumptions.
            If this is the case, your return on the remaining investments is quite high. Suggest you continue.

  30. Hi Deepesh,

    Thanks for the quick response.
    In this case, i am paying total amount of 623900 i.e 31195 for 20 years.
    The total amount i would be getting is 850000 (1 lakh at 5th year,
    1 lakh at 10th year, 1 lakh at 15th year, 5.5 lakhs at 20th year).
    So, if i stop continuing now and invest remaining amount in other options where i get around 8-10% returns, will it be a better option or should i continue for another 10 years until maturity.
    I do not need LIC for tax saving under 80C as i already have other options.
    Kindly suggest.

    1. Dear Laxmi,
      I am not saying LIC Money Back plan is a good product. It is a bad product. Return is in range of 4-5%.
      However, you have already paid half the premium installments. So, that money has already gone in.
      For decision making, you do not consider sunk cost.
      What has gone in is a sunk cost. You can’t do much about it.
      You need to check the following:
      If the surrender value (91,000) and the future premium invested in a product can give you the cashflow that the LIC Money back plan will give you.
      To be able to do that, you need to get a return of at least 8.31% p.a. on surrender value and future premiums. Do note I have not even considered any final additional bonus that you might get. That will take up the required return even higher.
      My advice will be to continue this plan till maturity. Consider this LIC plan as part of your debt portfolio.
      But yes, have adequate life cover at all times. I would suggest you to stick to life cover of only Rs 5 lacs.
      You can go through the following to identify good term plan for yourself.
      http://www.personalfinanceplan.in/insurance/which-is-the-best-term-insurance-plan-for-you/

  31. hi deepest
    I want to close my jevan anand policy due to some financial problems. I had paid 2 lacks and I want to close my policy so is dat possible to return my cash back. Please help me.

    1. Hi Nithin,
      You are unlikely to get the entire Rs 2 lacs back. How much you get back depends on the number of years you have been in the policy.
      If you have paid just one or two premium installments, you won’t be anything back.

  32. Muthuvel Kannan

    Hi Deepesh,

    I have LIC New Jeevan Anand plan that I started in September 2014 and My yearly premium is 57000. I completed 2 years of premium and next month I have to pay third year premium. I wish to quit the New Jeavan Anand plan. Please assist me in doing so and I have some
    questions in this regard as below:

    Sum Assured: 1000000
    Plicy Term: 20 years
    Premium Amount: 56849
    Next Premium Date: 22/09/2016
    No of completed Year: 2 years.

    1.      Is this right time to Surrender or Paid up my plan?
    2.      If I Surrender, how much amount will I get?
    3.      If I go for Paid up, how much amount will I get? 
    4.      What is the difference between Surrender and Paid up?

    Appreciate your earliest feedback.

    Muthuvel.

    1. Dear Muthuvel,
      Since you have paid only two annual premium, the surrender value of the plan at the moment is NIL.
      1. Surrender the plan.
      2. You won’t get anything back.
      3. Under paid up, you don’t get anything back right away. But your policy continues with reduced life cover and reduced benefits. You can make this policy paid up only after you have paid atleast 3 annual premiums.
      4. Answered above.

      If you are surrendering the plan or making it paid up, do purchase a term plan to bridge the life insurance shortfall. Suggest you go through the following post.
      http://www.personalfinanceplan.in/insurance/which-is-the-best-term-insurance-plan-for-you/

  33. Hi I bought old Jeevan Anand (149) in 2012 for 20 years term
    I have paid 3 years premium @Rs.10427 for 200000 SA I feel this to be very costly affair.

    I want to surrender the above plan and but a pure term form HDFC online
    1. How much amount will I get as a surrender value?
    2.Do I need to personally go to the branch to surrender it?

    1. Dear Mr Joshi,
      Yes, it is better if you surrender the plan.
      1. You will only a small portion of your investment back.
      2. I think so or you can ask your agent.

  34. HELLO SIR, VERY GLAD TO READ YOUR TRUE AND ETHICAL ARTICLES. I M WORKING WITH LIFE INSRUANCE COMPANY AND GOING TO TAKE VRS AFTER TWO YEARS. MY AGE IS 49 NOW AND HAVE 20 LACS SA. THEN I WILL DO MY OWN FINANCIAL SERVICES PRACTICE, SIR WILL YOU ADVISE ME IS THERE IS NEED TO TAKE FURTHER LIFE INSURANCE AND IF HOW MUCH AND WHICH PLAN OF LIC OF INDIA I HAVE TO BUY. I HAVE A VERY GOOD REAL ASSET AND FINANCIAL INVESTMENT IS RS 10 LACS AND HAVE MINIMUM LIABILITIES. MY SON IS GOING TO USA FOR MBA AND WILL SETTLE THERE AND I HAVE DONE ARRANGEMENT FOR HIM

    MY EMAIL ID IS PATELFS@YAHOO.COM

    1. Thanks Mr. Patel.
      You need to see if you need life cover. Life cover amount along with existing assets should be enough to square off loans, meet financial goals and provide for family’s regular expenses.
      If you are planning to purchase life insurance, suggest you purchase term life cover (rather than insurance and investment combo products such as the ones from LIC). Btw, LIC also sells term plans.
      Suggest you go through the following post.
      http://www.personalfinanceplan.in/insurance/which-is-the-best-term-insurance-plan-for-you/

      1. Hi Deepesh,

        Thanks for your enlightening article!

        I have taken a Jeevan Anand on 2013 for 15 lakhs sum assured for 25 years and paid 3 annual premiums for Rs.49280. I am 29 now like to surrender my policy now opt for a term insurance. I would wanted to know the value which I will get in return from LIC for the 3 annual premiums paid.

        mail id – raam.shiv@gmail.com

        Thanks
        Sriram

        1. Hi Sriram,
          If you have paid 3 annual premiums, the surrender value should not be more than 15-20% of the total premiums paid.
          You can check the exact value with LIC agent or branch.

  35. I purchased jeevan anand 149 3 year back. Now i realised it a bulshit insurance plan. Minimum return & minimum death cover with huge premium..Never Never go for any LIC plan. Specially never talk with LIC agents they will always misguide you.

    1. LIC agents can only sell what LIC designs. And LIC structures products that people want to buy. So, we are also at fault.
      LIC agents are small fish. Banks indulge in much shameless mis-selling.
      As long as you have inbuilt commissions, mis-selling will continue.
      Intermediaries may be inclined to sell what fetches them the best commission (and not what suits you the best).
      That’s why don’t trust anyone blindly. Do your research before committing any money to a financial product.
      In case you need advice, approach a fee-only financial planner (not fee based) or a SEBI registered Investment Adviser (RIA).
      SEBI RIAs can’t accept commission. Hence, conflict of interest is avoided.

  36. Hi Sir

    I am looking for a life insurance plan. A lic agent offered me Jeevan Anand for 21 yrs plan SA 1000000, My age 34. 56K around premium.

    Please suggest..Is this best plan for me or suggest something else. I have investment target of 50K-60K PA…

    1. Manoj,
      Not sure if you have read the post.
      This post is focused on why you should not purchase New Jeevan Anand plan.
      Can’t add anything to it.
      Here are a few things you should consider.
      1. Will life cover of Rs 10 lacs be enough for your family? Most likely not. Hence,the plan is likely to be no use.
      2. You must first find out adequate cover for yourself and purchase a term life insurance plan for yourself. Invest the remaining amount. You can consider PPF and tax-saving mutual funds. I assume tax saving is a primary criterion.
      If you are looking for a good term plan, suggest you go through the following post.
      http://www.personalfinanceplan.in/insurance/which-is-the-best-term-insurance-plan-for-you/

  37. hi Sir,

    I had purchased new jeevan anand policy unfortunately a year ago through telecommunication . this policy is selled by insurance agent by making false comittment like 300% bonus , health insurance and 10& discount on each policy premium by lic credit card. but nothing recieved. I complaint about this in branch and IRDA and request for cancellation and refund after 3 month when i realize these are fake promised but the reply came the policy that the policy can return with in 15 days. now what should i do continue the policy for 3 years then paid up or surrender or do police complaint against agent

    1. Hi Kaushal,
      As I understand, you have paid just one premium installment.
      Free look period is for 15 days only.
      Do not pay any further premium.Surrender the plan.
      If you have something in writing from the agent, you can escalate to IRDA.

    1. Dear Meghraj,
      There is no fixed answer. Will depend on bonuses announced and surrender matrix.
      If you surrender the plan, the plan is over. There is no maturity value.

  38. kunalsingh6884@gmail.com

    I have taken a Jeevan Anand on 2015 for 450000 sum assured for 21 years and paid 1 annual premiums for Rs.25000. I am 32 .Should i continue or surrender? Please Answer

    1. In my opinion, you must surrender. Do note you won’t get anything back.
      And the tax benefit under Section 80C (if taken for the premium paid) will be clawed back.

  39. I have taken jevan anand on 2015. My dob is 09/09/1987. And polciy run for 2047 . and anuly primem is 50000 do i contioue this . or should i surender

    1. Only one year premium paid in 30 year policy. Surrender the plan.
      Please note tax benefit, if availed for investment in the previous year, will be clawed back.

  40. HI ,

    i m already paying premium of 24000 under LIC-814 , one of my relative pressurising me to take lic jeevan anand 815 , premium is around 60000 per annum , will it be useful or waste compared to focousing on mutual funds or PPF

  41. Hi sir my name is raju
    I am strat to one polace
    New jevan anand yearly 16000 i give tothe 10th class mark list sir this polace is good or no sir you tell me sir no good i chage to anedar polace sir

  42. Hi Deepesh, I have taken old jeevan anand policy for SA 3Laks and duration is for 21 years. I am paying premium of 15254 each yr.

    I have already paid 4 yrs of premium (60000 Rs). I’m in a confusion weather to continue the policy or surrender or paid up?

    Please suggest. I have asked for surrender value and it is 35000. Im not sure about the paid up value.

        1. Difficult for me to tell. You will have to figure out yourself.
          Equity funds, debt funds, PPF, FDs, bonds etc depending upon your goals.

  43. Hey dipesh,
    Read ur article, and would disagree wid the returns you mentioned there. The bonus rate for new jeevan anand policy is 48 per thousand right now and the final additional bonus is 1300 per thousand. So if u calculate the maturity of a policy of a 25 yr old person wid sum assured of 1 lakh, premium of which wld be arnd 3000rs per year. The maturity amount would be
    100×48×30= 1,44,000/- (bonus as per rate today)
    +
    100×1300= 1,30,000/- (final additional bonus)
    +
    1,00,000/- sum assured.
    So the total comes to Rs.3,74,000/- + 1,00,000/- at the time of death.

    Even if u consider lowering the bonus rate or the final additional bonus rates, considering its a long term policy, u will get returns on premium paid which are much more thn 4-5% as mentioned in ur article.

    Please let me kno in case any of the above mentioned calcualations are incorrect, will be happy to accept my mistake.

    1. Hi Ravi,
      My calculations are based on assumptions I take. If my assumptions are incorrect, the output will be misleading too.
      Bonus depends on the policy and the tenor. If 48 is the current bonus, I accept it.
      FAB of 1300 looks very aggressive. Can you point to the source?
      Btw, FAB depends on your luck. It is one time.
      Even if I consider the value of 48 for reversionary bonus and value of 1300 for FAB, the return is 6.14% p.a. Need I say more? 🙂
      I have considered premium for a 30 year old (35 year policy term). Annual premium (before service tax) is Rs 3165.
      Traditional plans are poor products.

      1. That is why am not making assumptions and using facts..you can find the fab rate and bonus rate of last 5 yrs on the irda site…and fab on this policies dont depend on luck, it is clearly mentioned on the policy bond that it will be paid…also the 6.14% u r telling does not consider premium after exemption of tax on the premium paid…that will increase the returns as well..

        1. Hi Ravi,
          Bonus, by definition, cannot be guaranteed.
          It is nowhere written in the policy that the bonus is guaranteed. Bonus gets guaranteed only after it is announced. Not before that.
          I understand that you can take a fair call based on precedent set by LIC.
          LIC New jeevan Anand is a new plan. Certainly not 5 years old. Bonus information is also available on LIC website too. Just that could not information about FAB.
          Coming to return, I agree post tax yield will be higher for New Jeevan Anand. However, you must consider following aspects.
          1. Post tax yield will vary based on your income tax slab.
          2. Benefit under Section 80C is not just available to LIC policies. It is available to PPF, EPF, Term insurance, ELSS too. You must compare post tax yield for all the investments. Can’t compare apples and oranges.
          3. Benefit under Section 80C is capped. You need to see if you are even getting the benefit of paying premium for LIC policies.

  44. Hi Deepesh,thanks for the informative article you have shared. I had a lic jeevan anand policy taken back in 2011 for a coverage of 50lac I was paying premium close to 1.5lac. I paid 5 premiums till 2015 and decided to surrender the sane in July 2016. I got the surrender amount credited to my said account. I wanted your help in letting me know if the surrender amount (approximately 3.5 lac) will be taxable? My lic agent said it will not be taxed, but I have not got any such document from lic stating that money of surrender value is tax exempted. Appreciate your help and guidance in advance. Swapnil

      1. Hi Deepesh, thank you for such prompt response. But does Lic issue any documentation to support this, I mean to support the tax filing process at the end of financial year.

        1. Hi Swapnil,
          Does not matter. LIC won’t issue any documentation. If any tax were to be paid, LIC would have already deducted 1% TDS from your maturity proceeds.
          There is no income tax to be paid.

          1. I have 3 lic
            One is 9 year old of 17 yr
            Two is 3+ year old of 21 yr
            Third is 5 year old of 30 year..

            What to do now ?
            Surrender or paid up ……

  45. Hello Deepesh,

    I have a friend offering New jeevan Anand Plan and i started thinking after reviewing your blog. Nicely written.
    My purpose of investing in this plan:I will get some amount at the age of 58 ( i am presently 23 years old, thinking to take plan of 35 years), this will be one of the investment option + insurance cover.

    I am thinking plan of SA 10 lakhs, ill have to pay 30k for 35 years and according to my friend LIC will provide me 5050000 INR (S.A=1000000 + bonus=1750000 + F.A.B.=2300000) + life time rs 1000000
    Is his calculation right or he s fooling me? If his calculation is right, should i take this plan or not if his calculations are right.

    Thanks in advance.

    1. Dear Kapil,
      You are quite young. Purchase a pure term plan and relax.
      http://www.personalfinanceplan.in/insurance/which-is-the-best-term-insurance-plan-for-you/
      There is no need to purchase New Jeevan Anand.\
      Firstly, there is no guarantee. LIC announces bonus every year and the bonus amount can change.
      Hence, incorrect on your friend’s part to give a sense of guarantee.
      He has assumed a Reversionary bonus of Rs 50 and FAB of Rs 2300 per 1,000 of Sum Assured.
      Reversionary bonus has been in this range. So, you can still be ok. FAB depends on the bonus announced in the year of maturity and can be anything.
      Rs 2,300 looks very high.
      Ask him the rationale for mentioning such high bonus rates.

      1. Thank you Mr. Deepesh for clear and fast reply.

        Can you suggest me some term end insurance with more than 40 years policy term.
        As what I am thinking is if ill take term end insurance for 25 years then after age of 48 taking another term end insurance will result in very high premium.(Plz correct me if i am wrong)

        Kindly understand my situation and suggest me

  46. Hi Deepesh,

    I have purchased lic jeevan anand policy in 2011 and I have paid 5 anual premiums till now each premium is Rs.25634.Sum assured is 5Lakh and policy term is 21 years.

    Could you please let me know if I surrender the policy or should I go for paid up..?

    I do not want to continue with Lic’s anymore and I have term insurance for 50L

    And for remaining savings I am investing in SIP’s. Please suggest me.

    Thanks in advance…

    1. Hi Natraj,
      You have paid 5 premiums.
      Can you check the surrender value with your agent?
      To be honest, even though paid up is an option, I do not like the option very much. Again, a personal preference.
      Of course, if the premium is a big burden on your pocket and is compromising your other investments, then it is a different matter altogether.

  47. Sir,
    I have purchased LIC jeevan anand policy in 2015, and paid one year premium.Policy is for 500000 sum assured and a term of 16 years. As after reading this article, I am thinking to discontinue it. Please suggest is there any way policy sum assured can be ammended to a lower value.

  48. Hi Deepesh,
    Unfortunately, I bought 15 policies LIC Jeevan Anand (T. No. 149) – Old, Commencement Date 28th Oct 2008
    15 policies with 1 Lakh Sum Assured each, Policy Term is 75 for each policy, while Premium Payment Term is 20 to 34 years as below:

    Premium Yearly Premium Payment Term Vested Bonus
    5,490.00 20 30100
    5,185.00 21 32900
    4,903.00 22 32900
    4,646.00 23 32900
    4,414.00 24 32900
    4,200.00 25 32900
    4,001.00 26 32900
    3,822.00 27 32900
    3,652.00 28 32900
    3,497.00 29 32900
    3,351.00 30 32900
    3,216.00 31 32900
    3,089.00 32 32900
    2,973.00 33 32900
    2,862.00 34 32900

    So far I have paid 8 yearly premiums (including first year premium) and next yearly premium is due on 28th Oct 2016. Please suggest what should I do, surrender or paid up or continue?

    Thanks,
    Rajeev

    1. Dear Rajeev,
      You have paid quite a few premiums. Given the premium term, it is unlikely you will get benefit from these policies.
      Hence, more than the numbers, you need to see the utility of these plans in your portfolio.
      Stay away from such people people who advised you to purchase such structure.

      1. Thanks for your reply Deepesh, you are doing great help as your blogs are very informative. I already have term insurance with good SA, PPF, NPS etc to maintain my portfolio (due to lack of knowledge I never invested in MF or other short term plans). I need your advice on these 15 Jeevan Anand policies, what should I do, please advise.

        Thanks,
        Rajeev

        1. Dear Rajeev,
          You are welcome.
          Don’t worry. It is never too late to start.
          You will have to work out numbers yourself and see if it makes sense to surrender, paid-up or continue.
          Typically, it makes sense to continue older policies and surrender new ones.
          There is a post on my blog on this topic. Please go through it.

  49. Hi Deepesh,
    Unfortunately, I bought 15 policies LIC Jeevan Anand (T. No. 149) – Old, Commencement Date 28th Oct 2008
    15 policies with 1 Lakh Sum Assured each, Policy Term is 75 for each policy, while Premium Payment Term is 20 to 34 years as below:

    Premium Yearly Premium Payment Term Vested Bonus
    5,490.00 , 20 , 30100
    5,185.00 , 21 , 32900
    4,903.00 , 22 , 32900
    4,646.00 , 23 , 32900
    4,414.00 , 24 , 32900
    4,200.00 , 25 , 32900
    4,001.00 , 26 , 32900
    3,822.00 , 27 , 32900
    3,652.00 , 28 , 32900
    3,497.00 , 29 , 32900
    3,351.00 , 30 , 32900
    3,216.00 , 31 , 32900
    3,089.00 , 32 , 32900
    2,973.00 , 33 , 32900
    2,862.00 , 34 , 32900

    So far I have paid 8 yearly premiums (including first year premium) and next yearly premium is due on 28th Oct 2016. Please suggest what should I do, surrender or paid up or continue?

    Thanks,
    Rajeev

  50. Hi,
    You are comparing apple vs orange.You can not compare LIC insurance+moneyback plan with term plans. They would need both. Stop spreading wrong information to the people.

    Regards,
    RaM

    1. Dear Sir,
      LIC Jeevan Anand is not a money back plan.
      The comparison is against combination term insurance and PPF. So, it is not apple vs orange comparison.

  51. Dear Deepesh sir,
    I appreciate for your guidance to many people who dont have awareness about financial spends. I had taken Lic New Jeevan Anand policy in 2015 and paid one premium with annual premium amount 1.75 Lakh which is for 25 years plan. As per he policy the final assured amount is about Rs. 1 crore along with death and disability risk insurance. Is this policy is good for my requirements like for bulk money back after retirement and risk of life. If this plan is not good please recommend which is good for my requirements. Thanks in advance.
    regards

  52. Hi Deepesh,

    Nice info. I took New Jeevan Anand plan in October 2016. My premium is around 65K per year. And I opted term period as 21 years.

    Did I took good plan? Or need any surrender after some X years?

  53. i have just avoided to pay my fifth premium of jeevan anand policy.
    Can you tell me what is the time limit after due period if I want to surrender the policy?

  54. Prasanna Chandran

    Hi Deepesh…I have a very specific query to make…How much I wish I had read your article 10 years ago….I have a Jeevan Anand (T.149) Policy details of which are as below:

    Commencement Date: 23/2/2004
    Sum Assured: 200000
    Policy term: 70 (Premium payment term: 19)
    Premium: 3022 (Qtrly)
    Policy Status: Normal premium paying policy (Paying premium regularly)

    I believe Policy gets matured in 2023, which is 7 years from now. I have already paid premiums for almost 12 years…I strongly agree with your viewpoints on Traditional Policies…Luckily I also have a Term Insurance from I-Pru for 1 Cr (Death)+ 50 Lacs (Acc. Death)…..Since I am at the tail end of this Jeevan Anand, I am at a fix, as to mathematically will I get benefited by surrendering it, or continuing it, or by keeping it paid up…..Pls suggest….if u need any extra info, I would be glad to share…..also alternatively on a lighter note, how about taking a Loan on Policy and invest the same in a better instrument to partially cover for the notional losses that I had suffered so far…:-)

    1. Dear Prasanna,
      You have already paid so many premium installments.
      Mathematically, it may make sense to continue this plan.
      Consider the plan as part of your debt portfolio.
      If the policy term is 74 years (I assume this is when you get the maturity amount), you are unlikely to reap benefits of the policy.

  55. Dear Deepesh Sir,
    Can u please answer my query requested on November 1 that is

    “Dear Deepesh sir,
    I appreciate for your guidance to many people who dont have awareness about financial spends. I had taken Lic New Jeevan Anand policy in 2015 and paid one premium with annual premium amount 1.75 Lakh which is for 25 years plan. As per he policy the final assured amount is about Rs. 1 crore along with death and disability risk insurance. Is this policy is good for my requirements like for bulk money back after retirement and risk of life. If this plan is not good please recommend which is good for my requirements. Thanks in advance.
    regards”
    Thank you

    1. Dear Hussain,
      I try to answer all the queries. Your query may have skipped my attention.
      See, the answers are never black and white.
      You need go see for your case.
      Mathematically, it may be prudent to surrender the plan.
      Suggest you go through the following post.
      http://www.personalfinanceplan.in/insurance/life-insurance-continue-or-surrender-or-paid-up/
      If you are planning to surrender, do purchase a term plan first (before surrendering). Depending upon your age, risk profile, existing asset/liabilities, you can consider exposure to equity mutual funds.

  56. I have taken a term insurance of 1 CR. and have also started PPF
    But what you advise as PPF is maximum of I think 10 or 15 year. Then what we we do with that amount as we cannot continue PPF.

    Thanks in advance.

  57. WOW !! I was just about to purchase 2 more “Traditional Life Insurance” plans for long term investments, locking in about 15 – 20k a month… This article just got me thinking ALOT… I would be glad to get some personalized advice Deepesh..

  58. Hello Sir,

    I have lic jeevan anand new 815 policy with sum assured 1 lakh and term is 20 years and i paid it for 3 years now which totals to 15600(yearly 5200) ..If i surrender it now what amount will i get? whether its 15600 or only 30% of that 15600?

    Because the policy details states that “Surrender: After 3 years of full premium payment” and “Guaranteed Surrender Value: 30% after 3 years, 50% after 5 years, Maximum 80% of total premium paid” Its really confusing to understand..Could you kindly clarify this in detail?

    Should i have to pay my full premium which is 1 lakh and only 3 years after that am i eligible to surrender? bcoz they say after 3 years of full premium payment…so even if i do that do i get only 30% of my whole premium? really confusing sir..,please help me.

  59. Hi Raghav, Ia m presently working with HCL Technologies,Age -30, i need you to help me with investment in postal life insurance. My Annual investment capacity is 4 to 5 lack per annum. Dont have any life insurance or endownment plan yet. Also help me to know if HCL technologies employee can go for PLI since postal life insurance have eligiblity for govt and PSU sector only. Not really interested in rural postal life insurance.

  60. Many times we take insurance policies either referring to agent/ financial advisor, newspaper or friends. In most of the cases, the person who buy insurance is not aware of actual requirements and benefits of policy. It is the job of insurance advisor to bring it to their knowledge about what is their actual insurance requirement and how they can meet it.

    Many people are not comfortable with the idea of getting NIL returns on completion of term policy period. For them it is a waste of money.

    Actually, see it other way. It is really appreciating that you take proper steps to keep your family completely secured throughout life. Great sir. You really care for your family.

    You always secure whenever your life and health is fully secured. Rest leave to Him.

    Humble request is take insurance on priority basis and rest will follow.

    Insurance is nothing else but your love and care for your family.

    I am a LIC life insurance advisor having tremendous belief in term plans.

    Start today. Do not keep postponing your decisions.

  61. Dear Deepesh,
    I invested in jeevan anand in mar 2014 for quarterly premium of rs7500/- now i am paying dec premium(ie 12th premium) I took it for 20 years. I don’t want to continue.
    I am 42 now. Please suggest if i will get any returns or not. shall i pay this premium?.

    1. Dear Vijaye,
      You wouldn’t get much amount back. Please check the surrender value from your LIC agent or branch.

  62. Dear sir i want to know that what is the maximum ceiling amount of accidental death claim in lic endowment policies? Suppose Mr X has three policies like new jeevan aanad of sum assured of 25 lakh , jeevan lakshya of sum assured of 30 lakh and jeevan labh of sum assured of 20 lakh and suppose Mr X dies in accident after taking all three policies then what is the maximum açcidental amount Mrs X will receive after death of Mr X?

    1. Dear Anurag,
      Unless you have accidental death benefit rider, the nominee gets the sum of the following.
      1. Sum Assured
      2. Vested reversionary bonuses
      3. Final Additional Bonus, if any.
      Sum Assured for the 3 policies is 75 lacs in total. You need to see the value of vested bonuses.
      If you have purchased accidental death benefit rider, you will get extra amount.

      1. Dear Suppose Mr X has taken accidental death benefit rider in all three above mentioned policies then what will be total claim amount in case of accidental death of Mr X?

        1. You need to go through policy wordings to find out more. Whenever you have such doubts, please refer to policy wordings.
          I have checked for New Jeevan Anand.
          The maximum aggregate limit of assurance under all policies including policies
          with in-built Accident Benefit taken with Life Insurance Corporation of India under
          individual policies as well as group policies on the same life to which following
          benefits apply shall not in any event exceed Rs.100 lakhs of Accident Benefit Sum
          Assured. If there be more policies than one and if the total Accident Benefit Sum
          Assured exceeds Rs.100 lakhs, the benefits shall apply to the first Rs.100 lakhs
          Accident Benefit Sum Assured in order of date of policies issued.

          Hence, accidental benefit can’t exceed Rs 1 crore for the same life (for all the policies from LIC). Even if it does, LIC will pay only up Rs 1 crore in case of demise due to an accident.
          Suggest you go through remaining two policies too.

          1. Hi Deepesh,
            My name Rizwan, I’m an software engineer and I would like to invest a life insurance plan but which should be better coverage on tax paying and life insurance and money back. I’m just 25 years old and I’m really confused where I have to invest my money please please give me a suggestion to put a policy.
            My tenure rs.8-10 lahks
            Please recommend a policy.
            My email id- rizwan.bakash@gmail.com

          2. Dear Rizwan,
            Purchase a term plan with sufficient Sum Assured.
            Invest the remaining in other investment products such as mutual funds, PPF etc.

  63. Dear sir actually i just want to know that is there ceiling or maximum limit for claim in case of acciental death in lic policy. From somewhere i read this limit is 1 crore. Is it true??

  64. Hi, I have a Jeevan Anand policy :
    Year of 1st paymnt-2010,
    last paymt-2025 ,
    Maturity date -2086

    Term – 76

    Sum assured together with acc.bonus <- On life assured surviving the premium paying term
    Sum assured together with acc.bonus <- On life assured's death before end of stipulated premium paying term
    Sum assured – On Life assured's death after end of stipulated premium payment term

    What does this mean (sorry, just took the policy by persuasion)
    If I die before 2086, my nominee gets sum assured plus bonus. 🙂
    But, if I die after 2086, my nominee gets only the sum assured?
    And, either ways, I don't benefit with the money when I am still alive, yeah? 🙂

    Is that right?

    1. Insurance is about ensuring family’s financial future when you are not around. Hence, nominee gets the amount. And that’s how it is supposed to be.
      If you survive policy term, you get Sum Assured +Bonus.
      However, your life cover does not get over even after 2086. If you die after 2086, your nominee gets Sum Assured.

  65. Hi depesh i have new lic jeevan anand plan i purchased it whn i am 27 yrs old for sum assured 10lacs for 32 yrs..my agent told me..that after 32 yrs i get maturoty amt worth rs 40 lacs..is it true i get such amount after maturity?plz reply..

  66. great.sagarian@gmail.com

    Hi Deepesh, I want to end LIC Jeevan Anand(149) 21 term, premium 25800, assured 500000, Started in 2008. Surrender value 1lakh 61 thousand. I’m already having HDFC Life 1 crore term insurance. Should I surrender the policy???

  67. Dr rakesh reddy

    Dear sir,
    I had taken new jeevan anand policy for sum assured of 15 lakhs(premium is 81000) per year in september of 2016.. but i feel i have to surrender the policy after reading the article.. i was told i wont get anything in return as it is 1st yr of policy… my agent told me i would be getting 32 lakhs at end of 21 yr tenure.. also he said if i surrender life coverage policy (which is 15 lakh sum assured) i would get 10 lakhs in excess.. plz guide me….thank u

    1. Dear Rakesh,
      Mathematically, it makes better sense to surrender the plan since you have paid just one premium.
      Yes, you won’t get anything back. However, surrender may still be a good choice.
      However, whether you should actually surrender depends on a few other aspects.
      Do you have any term life insurance or do you plan to purchase one?

      1. Dear deepesh,
        Im yet to take a term insurance.. looking for icici prudential life.. comes around 10 k for 1crore coverage…

        1. Dear deepesh,
          My agent told me that if i dont want to continue life coverage of 15 lakh post maturity i can break it and i would be able to claim 10 lakh… is that possible??

          1. Under Jeevan Anand, you get coverage even after maturity.
            I am not sure what your agent meant by Rs 10 lacs after maturity.
            In any case, what do you break after maturity? You have already paid premium for the entire term.

  68. Hi Deepesh,
    I have taken New LIC Jeevan Anand 815 policy for 18 years with sum assured 5, 00,000 Rs of yearly premium 33120 rs. It is purchased from one the agent who is my relative he actually tricked me by saying after maturity life cover will continue and you can withdraw 80% after one year of maturity. Later I found out this is not true and now I want to make this policy paid up. I calculated based on the information available in net as below. (3/18*500000) =83333 rs is reduced sum assured. The bonus for 3 years at the current rate is 45*500*3=67500 rs. So if I make the policy as paid up, after 18 years I will get 83333+67500=150833 rs against the investment of 99600 rs.
    Please let me know what have I calculated is correct or not?

    1. Hi Lokesh,
      Under Jeevan Anand, life cover continues after maturity. So, your agent was right on that aspect.
      You get the complete amount on maturity. Not sure what he meant by 80%.
      Your calculations seem correct. You can check with your agent too.

  69. Hi Deepesh Raghaw,

    I am 28 year old. i don’t have any investment policy like LIC or etc.

    I read your suggestion. i am totally confused that where i will invest my money?

    1. Hi Vinit,
      Purchase a term life insurance plan.
      Invest the savings in pure investment products such as PPF, EPF, mutual funds, FDs etc.

  70. Dear deepesh
    My agent had told me that if i dont want the life coverage of 15 lakhs after maturity i can withdraw it and ill be paid 10 lakhs(apart from maturity amount).. this is what he claimed.. plz clarify on this part…

  71. Hi..

    Very informative and interesting Article..

    I am a policy holder of Jeevan Saral since 2011with a term of 20 long yrs – Annual premium of 24000 for me and my Spouse..

    Kindly suggest if I can surrender this plan.. so that I can invest in other better options…

    1. Hi,
      I have not read anything about Jeevan Saral plan. Hence, difficult for me to comment.
      Surrender may not be the best choice.

  72. Hi Deepesh, Even i was about to get trapped in to traditional policies and your post helped me a lot. I am searching for a best policy from many months not able to get.The purpose is I need some good amounts of returns when my kid grows up and need money for his education without compromise. I went through few child plans but not sure. Can you suggest best plan/way to satisfy this need.I am not behind the polices,need some financial planning to satisfy this need.

    1. Hi Satya,
      Always difficult to answer such questions without knowing a person well.
      You can consider a balanced portfolio for your kid’s education. Do consider exposure to equity.
      Seek professional help if required.

  73. I purchased Term plan (sum assured 50 lakh – term 45 years)and also New Jeevan Anand (sum assured 12 lakh – term 35 years) policy last year but I am not going to surrender or make it paidup. Reasons given below-

    1) This combination of Term and New Jeevan Anand is best suited for anyone who is less than 35 years old as it offers both benefits- survival and death.
    2) If I die within policy term, my nominee gets claim from term plan (50 lakh) as well as from jeevan anand (12 lakh).
    3) If I survive entire policy term, term plan doesn’t give any return but jeevan anand will pay me maturity value as 60.18 lakh including sum assured and all bonuses. Jeevan Anand will also pay Rs. 12 lakh to my nominee in case of my death after policy maturity without any extra premium. This is too important to ignore.
    I calculated IRR for 10% income tax bracket and it came around 7.9552%.
    4) Insurance should NEVER ever be mixed with investment. By proving insurance plans offer low returns, we can’t achieve anything. Other investment products with their so called “high returns” have no provision for risk cover. Only insurance can offer you risk cover.
    5) I would like you to read this link

    http://www.divyaadvisor.com/2014/07/return-lic-india-endowment-policy/

    Ms. Divya has given IRR for endowment policy with and without service tax and income tax considerations.
    6) I invest heavily in mutual funds for getting high returns in long term but have no intention of surrendering or making my Jeevan Anand into paid up.
    You can give your comments supporting or countering my views.

    1. Dear Sameer,
      The best plan is that the one that lets you sleep peacefully.
      You seem to have found one for you. Relax. Does not matter what my opinion is.
      You are investing in MFs too. So, you should be ok.
      Better to keep Investment and insurance separate. With high commissions and investment patterns, it is quite difficult to give good return in traditional plans. For participating plans, it is not possible to forecast bonuses over the long term. Therefore, there are a number of assumptions involved. You can take aggressive assumptions to show decent returns.

  74. My age is 35.Is there any LIC policy in that we have to pay the policy amount 3000 per month till 10 years and when my daughter will gets 100000/- at 18 age;100000 at 21age;100000/- at 23age;150000/-at 24age and 150000/- at 25age.please reply me at my e-mail I’d sanjaysinha11@yahoo.co.in or 09428025674.
    Thank you.

  75. Hi Deepesh,

    I have taken Jeevan anand plan and then immediately requested agent to change the half yearly term to yearly with the amount i already paid so that i can afford to pay the regular premium. Agent told me that we can write the cancellation letter but you need to pay remaining half yearly premium for the year as it is bond and cancellation with refund will not be entertained by LIC if you don’t pay the remaining half yearly premium. Please suggest what should i do now as my policy is already lapsed and it seems agent has not submitted the cancellation letter within review period.

    1. Hi Sachin,
      I am not sure if I got your question right.
      As I understand, you wanted to change premium payment frequency from half-yearly to annual and LIC is not permitting it.
      So, you are planning to cancel the policy but the agent is asking you to pay additional installment.
      All I can say is that you do not need to pay the premium if you want to surrender the plan. Not sure if that was your question.

  76. Hi ,

    My parents want to invest 50000/- rupees on granddaughter(2 years old).

    Could you please advise any better plan.

    Thank you.
    Kartik

  77. Hi Deepesh, Excellent blog!
    Does the benefit of cover till death continue if i make my Jeevan policy paid up ?

    Thnx.

    Pratik

    1. Deepesh Raghaw

      You are welcome, Pratik.
      One small request. Please share the post with your friends and on social media pages.
      Yes, cover will continue even after policy term. Coverage amount will be paid up sum assured.

  78. Regarding Asssured bonus in new jeevan anand 815

    Hello Deepash,

    Could you tell me , why you saying the Assured bonus + F.A.B etc (Bonuses are NOT GUARANTEED). I guess because of Assured bonus only ppl are interested along with life cover after maturity. You given example that if we take 50 lac SA, we might get only 62.5 lac SA in the event of death during the policy term and all these are marketing gimmick like 128 % of SA.

    Thanks
    Sujan

    1. Hi Sujan,
      You are right. Bonuses in participating plans are not guaranteed.
      However, in participating plans, once the bonuses are announced, they become guaranteed (assured).
      Hope this clarifies.

  79. Hi Deepesh,

    I have a Jeevan Anand (149) policy for a 21 year term with premium of Rs.1,03,434/-. I started in 2008 and my Vested Bonus amount as on today is Rs.8,66,000/-. I am almost getting 94% of my premium amount as bonus every year. Why do you think this is not a good plan? Please help me understand. Thanks.

      1. Hi Deepesh,

        Thanks for your response. What you said makes sense. I have paid the premium for 9 yrs till now. Please suggest my course of action from now. Thanks again.

        1. Deepesh Raghaw

          You are welcome, Seshu.
          Think you should continue the plan. Just that do not make such investments in the future.

  80. I want to claim my New Jeevan Anand Policy.

    I have completed 3 years & being paid 5960 quartely .

    What should I do

    1. Hi Suraj,
      Mathematical answer will be to surrender.
      What you should actually do depends on the kind of investor you are, premium in relation to other investments, your belief in term insurance etc.

      1. Thank you sir.What will be the best strategy in that case ppf+term or elss+term?Any suggestion for term insurance company.

  81. Nice information. Good analysis. Even wiser investments in share market can yield more than LIC life policies. I have had similar observations when suggested to opt for LIC policies to save tax. I would rather suggest people to go in for wiser investments and enhance returns thereby increasing your annual income rather than think of saving tax by such means. Tax never gets saved and the money invested in property is always stuck there. In short you will never enjoy money invested in such deals to your fullest and will always end up compromising.

  82. Hello Deepesh,

    Some really insightful writing. I have purchased the LIC jeevan Anand Policy in 2013. I am currently 25 yrs old and the policy runs till I am 60. My annual premium comes upto approx INR 50000. The primary reason I invested in this is I felt I was getting a good deal on coverage/premium owing to my age. Current coverage I have is 25Lacs which goes till 1Cr 22 lacs when it matures. I do not plan on buying any more policies and intend to continue with just this one. Do you think that it is a wise choice. Would love to hear your thoughts. Thanks.

  83. Hello Deepesh,

    Wish I would have read this article before Dec 2016, so could have given a little more thought on buying New Jeevan Anand (185).

    But nevertheless, it happens!!!

    I’m 26 years old.

    I bought this LIC policy (NJA,185) last year in 2016 for term of 35 years. With 25 Lac as coverage and almost pretty much the same returns as above fellow reader (Vaibhav, May 22, 2017 post) with monthly premium of Rs.6300/- .

    Its only 6 months now.

    should I reduce the policy term or
    back off and take whatever I can because why should I pay for 3 more years and get only 30% out of it?

    What would you suggest?

    Thank you,

    1. Deepesh Raghaw

      Hi,
      That’s ok. Even I hold a traditional plan. It took me a long time to realize that I shouldn’t have had this plan in the first place. So, I hold it even now.
      If you have to surrender, it is better to surrender now (rather than after 3 years).
      But yes, purchase a term plan to bridge the insurance gap, if there is any.
      And start investments in other instruments.
      Take professional help if required.
      You cannot reduce the policy term.

  84. Hi Deepesh,

    Hope you are doing good!

    I somehow landed up on this site and now I am confused to go for LIC or not since I planned to gor foe any investement to save tax.

    I have below plan details from one of the LIC agent. Can you please suggest if this is good. These are latest itseems. If not can you suggest best tax saving and investment plans. Thanks for your advise.

    [19/06, 7:12 p.m.] Shekar LIC: To,
    Mr/Mrs/Ms : Joshua

    Plan : LIC’s Jeevan Umang (845)

    Age :30
    Term :69
    P.P.T. :15
    AD & DB : 1000000
    Death Sum Assured :1000000
    Basic Sum Assured :1000000

    1st year Premium With TAX 3.75% :
    Yearly : 81489 (78544 + 2945)
    Halfly : 41162 (39674 + 1488)
    Quarterly : 20789 (20038 + 751)
    Monthly(ECS) : 6929 (6679 + 250)
    YLY Mode Average Prem/Day : 223

    After 1st year Premium With TAX 1.875% :
    Yearly : 80017 (78544 + 1473)
    Halfly : 40418 (39674 + 744)
    Quarterly : 20414 (20038 + 376)
    Monthly(ECS) : 6804 (6679 + 125)
    YLY Mode Average Prem/Day : 219

    Total Approximate Paid Premium : 1201727

    Approximate Return yearly from age of 45 to 100 or till life assured survives. : 80000

    Approximate Return at age of 100 on survival:
    S.A. : 1000000
    Total Bonus : 9730000
    Total Approximate Return at age of 100 on survival: 10730000

    Above mentioned total bonus is taken as per corporation’s benefit illustration scenario-2.
    [19/06, 7:14 p.m.] Shekar LIC: To,
    Mr/Mrs/Ms : Joshua

    Plan : Jeevan Anand – 815

    Age :30
    Term :16
    D.A.B. : 1100000
    Death Sum Assured :1375000
    Basic Sum Assured :1100000

    1st year Premium With TAX 3.75% :
    Yearly : 83668 (80644 + 3024)
    Halfly : 42273 (40745 + 1528)
    Quarterly : 21356 (20584 + 772)
    Monthly(ECS) : 7118 (6861 + 257)
    YLY Mode Average Prem/Day : 229

    After 1st year Premium With TAX 1.875% :
    Yearly : 82156 (80644 + 1512)
    Halfly : 41509 (40745 + 764)
    Quarterly : 20970 (20584 + 386)
    Monthly(ECS) : 6990 (6861 + 129)
    YLY Mode Average Prem/Day : 225

    Total Approximate Paid Premium : 1316008

    Approximate Return at Maturity Time :

    S.A. : 1100000
    Bonus : 792000
    F.A.B. : 27500
    Total Approximate Return at Maturity Time : 1919500
    +
    Life time Rs.1100000 risk cover.

  85. Dear Deepesh,
    I invested in lic’s jeevan anand plan and ppf in 2011 and that time I stayed in India.I have been paying my premiums.I moved to Dubai in 2014 and still kept paying the premiums.One of my friend told me that I can’t have this policy as I an NRI.Will it be a problem when claiming the money?Please guide.

  86. Hi Deepesh,
    I stumbled upon your article while doing analysis for my home loan cover.
    I have taken home loan from LIC for 20lakhs this month only. The agent tried to sell me jeevan anand for 77K annual premium as loan protection. When I said I would like to have term plan instead, he said they don’t have this. He offered me jeevan anand for 10 lakhs , 20 years tenure with premium of 37K per annum.
    I had already invested in Jeevan anand in year 2012 with annual premium of Rs 19k per annum for tax benefits. I asked him to include this as insurance for my home loan cover and he agreed. So now I have second jeevan anand for my home loan with around 18K per annum premium, the first premium is paid now.
    If we see here, my loan is still not covered fully.
    1. Can I buy a term plan for 20 Lacs and endorse this for my home loan fully? If yes what is the best way to do it as the agent does not seem to cooperate?
    2. Can I get rid of these two Jeevan anand now after it is tied up as my home loan cover? I a m ready to forgo the first premium I paid for the new one.

    Appreciate your inputs!

    1. Deepesh Raghaw

      Hi Minu,
      Classic example of mis-selling. The agent netted a hefty commission at your expense.
      LIC also has a term plan.
      Has the policy been assigned to LIC Housing Finance?
      Is it mandatory as per the loan agreement to have life insurance assigned to the HFC? Typically, loan agreement ask for mandatory property insurance but not life insurance. Life insurance is made to seem compulsory just to net commissions.
      1. Yes, you can do that. But what is the need to assign to the HFC? You can simply keep it for you.
      2. First one, you should hold. Second, mathematical choice will be to surrender.

      Avoid such plans in the future.

      1. Nothing is mentioned on loan agreement about the life insurance mandate.
        Yes these policies are now assigned to my home loan as I do not have property insurance.
        1. Should I buy a new property insurance so that I can surrender jeevan anand OR
        2. If I endorse my term plan (which I am planning to buy separately) should be enough? I am not sure if I can do this online as I definitely don’t want to associate with this agent anymore.

        1. Deepesh Raghaw

          Menaka,
          Life insurance and property insurance are different.
          I doubt LIC HF will relinquish claim on Jeevan Anand unless you give other security or insurance plan.
          You can talk to someone in LIC HF office fro better clarity.
          Endorsements can’t be done online.

  87. Hi,
    Just met with an LIC Agent he said about the new LIC jeevan aanad my sum assured is 2500000, term is 35 years annually I’m paying nearly 70k per annum. He is assuring that I will get nearly 1.25crores(including bonus) that seems pretty attractive. Is there any other investment plans(like ppf,elss) that offer such returns or should I take this one..?(purely as an investment option)

    1. Deepesh Raghaw

      Hi Aravind,
      Firstly, with Jeevan Anand, returns are not guaranteed. It is a participating plan.
      So, if your agents say you will get ~1.25 crores, it is not in the right spirit.
      That’s a return of 7.82% p.a. Unlikely, you will get this kind of return with Jeevan Anand.
      If you want pure investment, pick up pure investment (and not insurance and investment combo products).

  88. Rajesh Tiwari

    Hi Deepesh Raghaw,
    I really appreciate for the post and knowledge you shared.

    I am average salaried private employee. I know only stock market can return highest amount considering todays scenario. I have already three SIP’s 1K each, and now feeling requirement of some investment which give good return and save tax as well. One of my relative is behind me for New Jeevan Anand policy but as you already mentioned in your post “STAY AWAY FROM……..” I also believe and agree with you.

    Now my question is, I want an investment of 25-30 K per annum expecting good return and tax saving. Please suggest me specific plan as I already shared with you the amount of investment.

    Best Regards,
    Rajesh Tiwari

    1. Deepesh Raghaw

      Hi Rajesh,
      You are welcome.
      Please share the post with your friends and family too.
      It is difficult for me to comment unless I know about your goals and investment horizon.
      You can pick up a good ELSS and invest. You can invest in PPF too.
      However, at the time, do ensure that you have adequate life cover.

  89. Manikandan Thulasiram

    Hi Deepesh,
    This is quiet a story but sharing my experience. Pardon me…
    Once after my younger brother’s demise in 2009, my parents claimed endowment policies which my brother had and which was close to 7 lakhs. Why I am pointing here is, the amount may be sufficient/or not sufficient for different people and for us it was very less when compared to our outstanding clearance.
    That time I studied more on the policies and then realized the insurance policies are not the instrument for investment and it should cover the need for the dependents when the insurer is not alive. I have surrendered all the policies had with LIC, AVIVA and Sun birla like endowment policies in 2009.
    Based on my understanding I purchased a term insurance in AVIVA at the age of 37, covering 1 crore with premium paying tenure till 70 years. For this I am paying only 16000/ annum and I don’t have no other policies. What I want to invest the remaining amount (suppose 50000/ annum) I diverted partially in RD in Post Office, Long term Delivery Shares in performing companies and etc.,. apart from regular PF and PPF.
    Now, I feel better when compared the one I invested in Traditional Policies and I wanted share in this forum for the benefit of others.

    Appreciate your inputs, if I have deviated anywhere and suggest for Good investments

    1. Deepesh Raghaw

      Hi Manikandan,
      I am sorry for your loss.
      I think you are doing well.
      Focus on asset allocation. Review and rebalance at regular intervals.
      If you are not confident of your stock picking skill, mutual funds may be a good route.
      Make sure you have enough life cover.
      Good luck!!!

  90. Hi deepesh
    If i finished my tenure and i received my maturity. Now, is it possible to get death benefit even-thought still i am alive or any possibility to surrender policy after the maturity.

    1. Hi Rolwin,
      With Jeevan Anand, there is coverage for a few years beyond maturity too.
      There is nothing left to surrender now.

  91. Deepesh,

    I agree with you 100% I would want to go on a house loan and surrender the LIC policy which has such low returns, I feel trapped due to such heavy penalty. I however, have decided to go on paid up and take a loan on the existing premium, utilize that money on better investment, pay minimal interest until I fill back that principle.

  92. Hi Deepesh,

    Awesome article.

    I have one Jeevan Anand policy:

    Sum insured : 10 lakhs
    Premium : 68500 Per year
    Term : 16 years
    Premiums paid: 5 (from 2013 to 2017)

    Should I continue, surrender or go for paid up option?

    I have no other policy and investments.

    Please advice.

    1. Hi Neeraj,
      You have been paying for 5 years.
      Is the premium for the plan crowding out your other investments?
      You may not have made other investments but I want to understand if you can if you continue paying Rs 68.5K as the annual premium.

      1. yes crowding out with home loan and personal loan EMI’s but not very significantly.
        Today, after reading your post I purchased a term Insurance of 1cr and have to pay approx 13000 annually as well.

        1. If the premium is affordable and not crowding out other investments, it is better to continue.
          Good to know that you purchased a term plan.

  93. Hi, I came across this article while reviewing my lic policy.
    I have two lic policy.
    one jeevan anand started on 2007 and i have paid 11 installment till now now.
    Second one new jeevan anand started on 2014 and paid 3 years and 4th is due in 15 days.

    Please suggest what is the best option for above two policies.
    Surrender or paid up for each above.

    1. adding more info,
      Lately due to EMIs i feel lic premiums are getting burden, Apart from above two, i have wife lic too.
      Total amount i pay for all 3( mine 2 and wife 1) in LIC is appox 95k.

      Also i understand as per your article term insurance is better, but i seek suggestion on my 3 lic plans.

      Thanks

      1. Hi Rocky,
        Can’t advise exactly on the basis of this little info shared.
        Think you should continue with the first policy.
        Second policy can be discontinued if it is a strain on your cashflows. You are the best judge if it really is.
        I also believe your other investments are being crowded out because of this insurance plan.
        However, do ensure you have adequate insurance at all times.

  94. I’ve Jeevan Saral .Annual Premium Rs 1,05,000. Almost 7 yrs completed. Is it good to continue for further 13 yrs. Or Can i withdraw it ?. Really is it worth to buy…. Really this plan is good or bad…. I

      1. Not heavily. But i’m looking for other good investment with adequate returns. Really is it worth to continue that plan ?

        1. Hi Mani,
          Frankly, I have not gone through the policy wordings. Therefore, cannot give an accurate answer.
          However, you have been in the plan for many years.
          If the cash flows are not adversely affected, you can continue and consider this policy as part of your debt portfolio.

          1. Hi Deepesh ,

            Thanks for your timely advise.
            Plan – 20 yrs ; Return shows only 2-3% …less than inflation rate… Because its combine with insurance.

  95. Hi Deepesh

    I m working in a reputed company as a software engineer and having annual income of 3 lacs. i have take jeevan anand plan for rs 33000 annual premium and sum insured is 10lacs however my mind and soul is not agree to continue. first premium after discount given by agent was 23000. till now i have completed 6 months with this policy. so shall i continue or drop and forget 23000 paid in order to avoid heavy lose in future.

    1. If this investment crowds out your other investments, surrender will be the best choice in your case.
      Surrender will be a good choice otherwise too
      However, do note the tax benefit you availed for this investment last financial year will be clawed back.
      Another point to note: Pass-backs (agent passing a portion of premium in cash to the policyholder) are illegal.

  96. Hi Deepesh,

    I am working as a software engineer in a reputed company. I am getting annual income 5.4 lac. I already took jeevan anand for One Lac. Kindly suggest me a best LIC Plan for me.

  97. Hi Deepesh,
    I’m regular reader of your blogs and appreciate your efforts for creating financial awareness I’m in process of making financial plan little late though. I’ve two questions.

    1) I’m investing in HDFC Children Fund for my kid’s education. Apart from that I’m also invested in PPF and FD. – Would like to know your views on this MF and conventional instruments.

    2)I want to increase my portfolio in terms of retirement planning. One of my friend suggested me to look at LIC NJA and similar product from MAX life purely for Debt investment as it offers lump sum maturity amount and assured monthly/annual pay outs post retirement. – While I’m not convinced with this would like to understand your view on these production for debt investment.

    Thanks,
    Amit

    1. Hi Amit,

      Won’t comment on the specific fund but your investment plan seems quite good. You need to see if FDs add value for a long term goal such as kid’s education.
      I am not very comfortable with you purchasing traditional plans for your retirement. Purchase a pure term plan and invest the remaining amount.

  98. jst went thru your article and i realy liked it,

    i am also a little confused, last year i bought lic jeevan anand 815. sum asured is 2500000 and annual premium is 110000. duration is 25 yrs.. i am 26 yrs old. I am also having a term insurance plan frm max life insurance. i have paid two premiums in lic jeevan anand. Now i feel to surrender the policy and invest the same amount in ppf and mutual funds. as i have paid only two premiums it wud be beter to surrender it now as the losses wil be comparatively lesser den paying premiums for three years and den surrendering it

    kindly advice on this

    thanks

  99. went thru the article. nicely explained.
    jst need a piece of advice

    i am 26 yrs old. last year i bought lic jeevan anand 815.
    sum assured 25 lakhs
    term 25 yrs
    premium 110000(one lakh and ten thousand annualy)

    i also have one term insurance plan

    now i wish to surrender my lic jeevan anand and invest the same amount in ppf and mutual funds as i have only paid two premiums and the losses wil be comparatively lesser than surrendering it after three years.

    kindly advice
    thanks

    1. Can do that. Mathematically that’s likely to turn out a better choice.
      Or else if the annual premium is not a big portion of your overall annual investments, you can even continue.

  100. Can you please explain how did you calculate the return i.e 5% per anum on lic Jeevan Anand please I’m waiting for your reply

    1. You need to make a few assumptions about reversionary bonus and final additional bonus.
      Put out the cashflows in a spreadsheet (say, Microsft excel).
      Use IRR function to calculate returns.

  101. Dear Sir,
    Am Naveen Kumar N and am 29 year of Age, am Purchasing Jeevan Anand Table 815 with monthly premium of Rs.2600/- (not sure approx.) for period of 20 years. should i purchase it. please gude me with your valuable suggestions.
    Regards
    Naveen

    1. If you have not purchased, suggest you avoid the plan.
      Please understand this post is about staying away from Jeevan Anand.

  102. Dear Sir,

    I am 27 years old.Please suggest me which plan is good for higher returns,maximum maturity benefit and life coverage.

  103. Sir,

    I have the old Jeevan Anand Policy(Table 149) and the Date of commencement is May 2006 and total amount assured is 5 Lakhs with the duration of 20 years. 2026 will be the last premium and 2027 it will get matured. I have paid the premiums(25K) yearly till 2014 and now I wish to discontinue the policy as I am need of some money and I feel I won’t get proper returns in this policy. Also, I have some other financial problems due to which I cannot continue.Can you please guide if I should continue of surrender the policy.

    Thanks In Advance

    1. Hi Prashant,
      Do you have an option? I mean if you need money and there is no other way to raise such funds, you can surrender.
      You can also consider taking loan against the policy.
      If there is no pressing need for funds, suggest you continue.

  104. Hi ,

    I have purchased new jeevan anand plan 2 weeks before for an annual premium of 68000 which would be paid half-yearly (34000). Policy term is for 20 years, subsequently it will continue next 12 years as I got 12 policies, one of my relative is a LIC agent so blindly I took it , I paid one premium 28900(as 15% discount in 1st year), Can you please suggest me if I should drop at this point of time/should continue till 3 years to get withdraw this paid amount.

    Thanks in advance,
    Vishnu

    1. Hi Vishnu,
      Did you purchase 13 policies under the garb of Retire n Enjoy?
      Very bad choice in my opinion.
      Since it is only two weeks, you can even return the policy under free-look period.
      You need to move fast.

  105. Dear sir,
    I am not too familiar with LIC policies. But I took Endowment plan 814 with sum assured 500000. I don’t know exactly is this good or bad… if not, then what is best saving plans for future!!!! should continue this Lic or any other idea. I have normal income 7 Lac yearly. Please advise.

  106. Total 12 policies each with 1lakh maturity maturing every year starting from 2032. Paid first premium of 79000 in Dec 2016 for all the policies together. Need to pay again in Jan 2018 (one month grace period.) Suggest either to continue or to let it lapse or surrender.

    Also how about surrender 6 policies and continue remaining? If it is fine, which ones to surrender ? the early maturity policies or later maturity policies

    1. Surrender is likely to be a better choice.
      If you plan to surrender a few policies, surrender the policies with longer maturity.

  107. Vaibhav Rastogi

    Hello Deepesh,

    I want to know that if I have two Lic New Jeevan Anand Policy than shall I be liable to get the said benefits of both of them at the maturity, on death before maturity and death after maturity?

    1. Vaibhav Rastogi

      A little change in the question.

      Hello Deepesh,

      I want to know that I have two Lic New Jeevan Anand Policy than shall I be liable to get the said benefits of both of them at the maturity, on death before maturity, death after maturity and no death after maturity?

          1. You are welcome, Vaibhav.
            Will appreciate if you could share the post with your friends and family too.

  108. Hello sir,
    1. I started LIC policy Jeevan Saral with yearly premium of 24020 rupees in 2010 so far I paid 8 yearly premiums. It’s a 20 year policy and final premium is on 2029 with maturity in 2030. sum assured is is 5 lakh.

    2. The other policy is Jeevan Surabhi (money back) for 15 years started in 2012. Sum assured is 7 lakh and yearly premium of 73922 . So far I paid 6 years and 7th year premium is due this month. I got 2.1 lakh money back in 2016.
    My plan is to continue first one , stop 2 nd one and invest that in mutual funds . When I enquired with the lic office I was informed that only 1.5 lakh will come to me if I close the policy. Plz suggest me how to go about.

  109. hi sir

    i have purchased a jeevan anand policy of 2 lac sum assured
    yearly premium of 12000/year , i have paid premium for 40 months ,
    can i close lic policy now and return will be full paid remium or not ??
    after closng this lic i want to open an Equity based mutual fund sip,
    whether this chice is right ??
    please guide

  110. Hi Deepesh,
    I have gone through your reviews where you are not suggesting for New Jeevan Anand.
    But still tempted after the return that my LIC agent has provided to me. Please advice if this is correct return that has been provided.

    Total Premiun Paid:18,21,963
    Total Returns: 62,09,000

    Entry Age: 41 yrs (Apr 2018)– New Jeevan Anand
    Below are the Policy Break-up details as provided by Agent:

    Age:57 –> Term-15 yrs –> Premium: 17334, Total Pay: 266250
    SA 2 Lac –> Maturity Amt:3,27,000 + 2 lac + 2 lac

    Age:60 –> Term-19 yrs –> Premium: 13473, Total Pay: 262047
    SA 2 Lac –> Maturity Amt:3,81,000 + 2 lac + 2 lac

    Age:62 –> Term-21 yrs –> Premium: 12111, Total Pay: 260316
    SA 2 Lac –> Maturity Amt:4,25,800 + 2 lac + 2 lac

    Age:64 –> Term-23 yrs –> Premium: 11013, Total Pay: 259251
    SA 2 Lac –> Maturity Amt:4,75,400 + 2 lac + 2 lac

    Age:66 –> Term-25 yrs –> Premium: 10092, Total Pay: 258202
    SA 2 Lac –> Maturity Amt:5,35,000 + 2 lac + 2 lac

    Age:68 –> Term-27 yrs –> Premium: 9337, Total Pay: 257979
    SA 2 Lac –> Maturity Amt:5,98,600 + 2 lac + 2 lac

    Age:70 –> Term-29 yrs –> Premium: 8691, Total Pay: 257918
    SA 2 Lac –> Maturity Amt:6,66,200 + 2 lac + 2 lac

    I need to to pay 82051 yearly Premium for 15 yrs
    After 15yrs I can pay the amt from maturity amt that I will get.

    Thanks
    Raj Ghosal

    1. Deepesh Raghaw

      Dear Raj,
      You are being sold multiple Jeevan Anand policies. Hope you know that.
      See, my answer is “Don’t opt for it”. Mathematical calculations will throw out a similar number.
      However, from the cursory glance, you won’t get this much money in the first place.
      Ask your agent to explain the working behind these numbers.
      Coming to your numbers,
      When you write 3.27 lacs + 2 lacs + 2 lacs, what does that mean?
      From New Jeevan Anand, you get Sum Assured + Reversionary Bonus + FAB.
      Sum Assured is Rs 2 lacs. So, one “Rs 2 lacs” is taken care off.
      I can’t understand where second Rs 2 lacs came from. Same for Rs 3.27 lacs. LIC bonuses are simply not that high. So, FAB and reversionary bonuses can’t amount to that much.
      Btw, LIC New Jeevan Anand is a participating plan. Returns can’t be guaranteed upfront.

  111. Hi Deepesh,

    Thanks for your quick response. Below are my response to your questions:

    1.You are being sold multiple Jeevan Anand policies. Hope you know that.
    Yes I am aware of that(total 7). Primary reasons:
    a) I do NOT want to pay the premium beyond 15yrs
    b) If it is stopped after 15yrs return will be less. So,I will use the maturity amt of 1st policy to pay the remaining ones.
    This is done to increase the tenure and maximize return. I do not want it to take beyond 70yrs. (Though we can increase it further to increase return)

    2. See, my answer is “Don’t opt for it”. Mathematical calculations will throw out a similar number.
    I respect your answer. Total Premiun Paid:18,21,963 and Total Returns: 62,09,000. But are you saying calculations are more or less correct but this return does NOT worth ?

    3. Coming to your numbers,
    When you write 3.27 lacs + 2 lacs + 2 lacs, what does that mean?
    3.27 is calculated based on Bonus and FAB of last 10yrs. He (LIC agent) is saying this cannot be less unless we have continuous degrowth in economy. (In that case MF, SIP all be in downward trend)
    I agree here I might get less, but question is how much less ? Or what is the least value ?
    2 lac is provided at maturity. No issue with this one.
    Another 2 lac (here we have a catch). This amt will be paid to my nominee after my death (Both Jeevan Anand and New Jeevan have double sum assured feature)
    In New Jeevan Anand this 2 lac which was supposed to be paid after my death can be paid to me after maturity on below conditions, based on verification by LIC:
    a) I am in a severe financial crunch
    b) I am having some critical illness which I am NOT able to support with my current financial condition.
    If LIC finds these are valid conditions then only this 2 lac will be paid to me even before my death.
    Even if I am in sound financial condition I can take a loan of 12.6 lac after 70yrs of age from LIC (90% of 14 lac (total of all policies), which was supposed to be paid after my death)

    Please let me know your thoughts.

    Thanks
    Raj

    1. Deepesh Raghaw

      Raj,
      You are complicating a rather simple matter.
      Stay away.
      That is not how you calculate returns. Nobody knows when they are going to die. So, though getting back Sum Assured even after policy maturity is good for you, you can’t calculate returns with that number.
      Bonuses are unlikely to amount to Rs 3.27 lacs on Sum Assured of Rs 2 lacs. Consider a bonus of Rs 50 per thousand Sum Assured. That means 1.5 lacs over 15 years. For you to get the remaining 1.77 lacs, FAB must be 900 per thousand Sum Assured. Next to impossible.
      Ask your agent about Reversionary bonuses and FAB over the last many years. The truth will automatically come out.

  112. HI Sir,
    i am in Jeevan Anand Plan 149 – commencing from 2004 yearly premium Rs.24003/- and sum assured 300000/- how much will get ? policy term 16 years

    1. Deepesh Raghaw

      Hi Madhu,
      That depends on the bonuses that are announced for your policy.
      Think you should get about 5 to 6 lacs on maturity.

  113. Hi Deepesh,
    I had purchases LIC Jeevan Anand (Plan 149) in Nov 2011. with sum assured 10 lac at maturity at age of 28. Policy premium paying is for 30 years. My premium is half yearly around 16.3k (32.5k yearly). I had already paid 6 years premiums (around 2lacs till date) and next 7th year 1st premium is due on May 2018. My age is 34 yrs and will be 35 yrs in June 2018. I am already investing in PPF & Mutual funds.
    Please help what to do with this LIC policy. Should I stop paying premiums for it? Also if I stop paying premium and if it will be come paid up, then, can I change nominee in paid up policy?
    One problem is that Policy has been issued by some remote branch very far from my place and LIC agent who opened it from that branch also left LIC Agent job. So, I am paying premium online and had never gone to that remote branch
    Please help urgently as my next LIC premium is due in May 2018

    1. Deepesh Raghaw

      Hi Deepak,
      If the policy premium is not a burden on your cashflows, you can continue with the policy.

  114. Hi Deepesh,
    Great article. Thanks a lot. I need your advice please.
    I have 2 Jeevan Anand policies. One for myself (taken in May 2015 and 4th premium paid recently) and another for my wife (taken in August 2014 and 5th premium due in Aug’18).
    Mine : Age 46, Yrly premium RS 216,662, Sum assured : 35 Lacs, maturity : 2036
    Wife : Age 43, Yrly premium RS 209,643, Sum assured : 35 Lacs, maturity : 2035

    By the article, I understood that best option for me will be to make both these policies paid up and buy term plans for both of us and invest remaining amount in MFs.

    Do you agree with my thought?

    Regards

    1. Deepesh Raghaw

      Hi Praveen,
      Thanks!!
      Before thinking about surrendering Jeevan Anand plans, purchase a term plan.
      I prefer surrendering the plans (than making those plans paid up). Making up the plans paid up unnecessarily locks up the capital.
      Unfortunately, you will have to take a significant hit.

      1. Hi Deepesh,

        Thanks again. Given that surrendering will fetch only about 30% of what I have paid and some bonus, why do you think making plans paid up is not a preferred option? Atleast my almost full paid up capital is intact and I will be covered for some amount.

        Thanks

        1. Deepesh Raghaw

          Hi Praveen,
          Think I need to provide some clarification. Should have done that earlier.
          I did not do any calculations to make a choice. I merely stated my preference.
          Please understand your capital is not really intact. You get it only at the time of maturity.
          Coverage will be negligible.
          I prefer to have greater control on my investments. And it is not difficult to lose track of investments if you don’t track them for 15-20 years. Please understand it is a personal choice.

          If you are looking for mathematical answer, here is what I suggest you do,
          1. Find out the surrender value. Compound it at say 7-8% for the rest of the policy term.
          2. Find out how much you will get at maturity if you make the plan paid-up.
          Go with the option that provides you greater value at maturity.
          If (1) is higher, surrender or else make the plan paid up.

          Btw, if the plan is not crowding out your other investments and is not a big portion of your overall investments, you can even continue the plan.
          Hope this answers your query.

  115. Chetan Kumar RJ

    Hello Deepesh Raghaw
    As i feel that you are not really a good financial advisor paying 5% getting 95%discount with assured returns is the only one product that is LIC where you have two benefits insurance and good returns in lumpsum at the end.

    Inspite of this why are you suggesting in PPF do you really know the interest charged during launch of this product around 9% and now it is almost 8.3% and interest is varying by each year and at the end paying for 25years and you get very less compared to lic product.

    I really laugh for every reply you make to people for an individual in his complete portfolio one should have atleast 25% in safe, secure and guanteed returns all these three cannot gurantee in government schemes like PPF, PS and shares.

    If not how could be LIC after 60years why no private insurance cannot beat the LIC.
    Because you do not know complete details and benefits in it and without knowledge please do not make people to go in wrong path.

    Means you do not have LIC it does not mean you are brilliant in investment.

    I request everyone do not go to false path until unless you go through complete details of product in LIC and it benefits calculate yourself at the end LIC is best cash investment tool and start early to have some offering in premium payment.

    Thank you all to watch and reading my comments any questions or queries welcome….

    1. Deepesh Raghaw

      Hi Chetan,
      I do not agree with you have written but thanks for your feedback.
      The world would be a nicer place if we were tolerant of each other’s opinion.

      1. Chetan Kumar RJ

        Hi Deepesh,

        Let me know why you do not agree apart from LIC there is no assured returns at the end as government schemes interest rate keep changing from year to year. (FD, NPS, PPF etc..)

        Thank you.

  116. Hi,

    The article is well written but it is focused to say that this plan (Jeevan Anand) is not good. There are so many things that are good in this plan and it has fulfilled life goals for many.

    For a person who is more concerned about
    -Safe returns (Term Insurance has no returns) and also an
    -Insurance cover till death,
    -Risk free (Not linked to the market),
    -Guaranteed by the Government of India,
    -Tax free returns
    -Returns while your live and also Returns to family after death.

    then I would say, Jeevan Anand is the best plan for one to buy.

    But if One has to go for a plan with an intention to take money in between the term then traditional insurance is not his cup of tea at all.

    I have been advising people to buy a mix of plans which include MF’s, Jeevan Anand, Term plan and a few stocks as well and this has worked for my clients since 2002.

    It is wrong for any advisor to write off any plan as bad – it can be MF or Traditional insurance or term insurance or any stocks, if you find any advisor saying so then please change your advisor.

    Every Individual must have a mix of different plans. (Do not put all eggs in one basket).

    Jeevan Anand is definitely a good plan to have it in the mix of all your other investments but should not be the only one investment in your entire portfolio.

    As an advisor, we need to educate clients to give every investment the most important factor called TIME.

    Another important advice I generally give to people is to stay away from Credit cards.

    It would be great if you can write an article on why people should stay away from Credit Cards instead of an article on Jeevan Anand that has already serviced and helped Lakhs and Lakhs of families during their difficult times.

    Traditional Insurance plans makes people disciplined in their investments and their goals are achieved at the end (Guaranteed maturity)
    I have seen investors redeem their Mutual funds or Long term FDs or stocks for silly reasons, their original goal for this savings was for totally different reason. Only a handful of clients are disciplined when it comes to investments.

    It happens at times when we give clients a rosy picture of Mutual funds or other forms of investments to achieve goal and also tell them that they can redeem it whenever they want….full stop. You have a guaranteed sale. But also a guaranteed stand for early redemption (Hence not fulfilling their goals).

    1. Thanks Muthuraman!!! Appreciate your time and patience in giving inputs.
      The role of an advisor is not to diversify across good and bad investments. It is to help select the right investments and help clients stay the course.
      I agree the definition of “right investment” will be different for different investors.
      Btw, participating traditional plans don’t have guaranteed maturity.

  117. I have paid for 7 years. Rs 21000 pa.
    Total 1,47,000 INR till date.

    Should I stop paying or surrender this Jeevan aanand policy. I was forced to buy this by my parents when I was starting my first job.

    1. If I were you, I would have continued.
      Unless you are finding it difficult to pay premiums or this investments is crowding out your other investments, you can continue.

  118. Stay Away From LIC
    1) For those who are saying LIC covers RISK then get term Plan
    2) For returns get PPF (VPF, EPF)
    3) for those who says return are assured in LIC , read again only Sum assured is fixed which is less than what you pay
    4) for those who want to invest in LIC please go ahead because it has Magic
    5) read comments and check the returns of those who get the amount after Maturity
    6) Calculate your returns in last and then compare , you can say PPF is not fixed and hence LIC bonus is also not fixed.
    7) Check the surrender value , anyone could you please answer why surrender value is 0 if you want to get your money in 1-2-3 years.? This is just to force them to continue

  119. Hi,

    Thanks for the info!
    I bought LIC new jeevan aanand in 2016 and have paid quarterly premium (19606 inr)for 3 years now.
    PPT is 16 years and sum assured is 1000000.

    what do you suggest? should i surrender or make it paidup?

    regards,
    Manish

  120. Hello sir i have purchased NEW JEEVAN ANAND POLICY with profit in 2015 and paid 4 premium until now.Policy tenure is for 21 years ie i need to pay until 2035 and maturity will be in 2036.Premium is 65000 yearly.Please do suggest what can i do.

    1. Hi Vishal,
      If premium payment is not a problem and your other investments are not getting crowded out, you can continue.

  121. Hello I have a LIC Jeevan Anand Policy and Premium is about 85000 p.a. for 35 years and Sum assured 30 lakhs , I have paid for 3 years and policy Surrendered value is 142000 and paid up value is 257000, Now what should I do if I want paid up it right now it has more 32 years , What should i get after 32 years if i paid up policy now. Currentymy bonus + sum assured is 309000/- Can I get another bonus on reduced paid up value or only 309000 after 32 years? Plz. advise me .

    1. Hi Rajat,
      If you make the policy paid up, you will get
      Paid up Sum Assured (30 lacs* 3/35) + Vested bonuses till now = Rs 2.57 lacs + Rs 3.09 lacs = Rs 5.66 lacs (at maturity).
      Bonus is not paid on paid up policies.

  122. Hello Deepash-ji,

    Many thanks for writing a wonderful blog to give us valuable information.
    This is Vikas Bajaj, an NRI based in Japan.
    Being graduated from Tokyo university, I also got in to trap of LIC, when I visited India in Jan 2017.
    I have bought two policies and paying an annual premium of approx. 2 lac (approx.1 lac for each policy)
    The policies are in force and unfortunately have already paid 2 years of premium (approx. 4 lac in total)

    The policies are as below;
    Start date: Feb 2017 (next premium to be paid by Feb 2019)

    833 Jeevan Lakhhya (SA 20 lac, Term 25 years, premium paying 22 years)
    836 Jeevan Labh (SA 20 lac, Term 25 years, premium paying 16 years)

    If I surrender the policies now, I won’t get anything back as I have paid only for 2 years. It means I will have to suffer loss of 4 lac.
    And if I pay 1 year of premium (approx. 2 lac more), I may have the policies paid up, but I am not sure what shall be the maturity amount as LIC doesn’t give future bonus (mention on their HP) on paid up value/ sum reduced.
    Since bonus is not applicable, so total paid up value of the policy shall be 6 lac in total (both policies) and I would get 6 lac after 23 years from today, is this right?
    Considering an alternative, if I have fixed deposit of 2 lac in any bank (rather than giving it to LIC), the value after 23 years will be approx. 9.5 lac (having return@ 7% p.a)

    Please advise the following.
    1. What shall be the approx. maturity value of the paid up policy?
    If maturity value after paid up of policy shall be around 9 lac, I prefer to have the policy paid up after paying 1 year premium.
    2. I prefer to have term insurance of SA 1.5 Cr with 30 lac coverage of critical insurance from ICICI Pru. Do you recommend this?

    Vikas
    vickyapu9@gmail.com

  123. Hello Deepash,

    I am planning for New Investment which can include both savings and Life cover. Can you please suggest which one can i opt.

    Regards,
    Phani.

  124. Thanks for the details. But I disagree your calculations to reach Jeevan Anand not a good policy. After seeing similar kind of reviews,. I did my own calculations with bonus, insurance benefits and I could find this policy can give 7.7 Percentage as return, which is good.. When we consider the return/investment part , we need to reduce the insurance benefit cost to reach the right return. When we not consider the insurance benefits, it will give just 5 Perc.
    Since this is also an insurance policy, need to consider the benefits/ insurance cost also..

    Now a days all return calculations in online is based on Mutual fund returns on 12-15 Perc which is realistic with high risk..

    My point is we should not surrender the LIC policies just by seeing the reviews. I’m not saying LIC is best investment policy, there are lot which can provide good returns with high risk. Taking risk is an individual option….

    1. Hi John,
      Thanks for your inputs.
      It is a participating plan. Therefore, it is difficult to calculate returns accurately upfront. Still 7.7% seems like a stretch.
      I agree considering 12-15% in mutual funds is clearly biased and not correct.
      I completely agree. We shouldn’t surrender the policies just by reading the reviews. In fact, if you see my responses, I ask most investors to continue. Most of the damage happens in the initial years. Beyond that, it is better to continue.

  125. Good blog Deepesh.
    I have 2 questions:-
    1) My sister(Age-27 years) took LIC’s New Jeevan Anand(Plan-815) and paid premium ( approx Rs 12000/year) from last 1 and half year for sum assured Rs 16 Lakh (agree the fact that inadequate insurance) term period 16 years. Apart from maturity amount, What i most like in this plan that one need to pay premium only for 16 years and covered for rest of the life whereas in term plan,one has to pay every year if he has to be under cover.
    Please suggest now should she stop this policy or continue to pay.
    2) I (Age-28 years,non-smoker) have to take a term plan of Rs 1 Cr.
    – Cover up to how many years?
    Should i also opt for additional addons apart from basic cover like:-
    i) Cover against Accidental disability,death ii) Cover against Critical illness iii) Cancer cover

    1. Thanks Jasjeet.
      1. Continue. Not everything in finance can be modelled on a spreadsheet.
      2. Buy til retirement. or till such time when you feel you would have accumulated enough wealth that you wouldn’t need life cover.
      3. Accidental disability: You can. For other covers, purchase standalone if required.

  126. I am having a plan of Jeevan Lakshya 833 which of late I have in mind to surrender the policy ,(commencing from 04/08/15. How much surrender value can I get? Please suggest. Thank you.

  127. hi Deepesh

    I have 2 premiums of 60K each in 2018 and 2019 in LIC New Jeevan Anand policy. The tenure is 35 years. Can I make this policy a paid up. I have a term insurance of 50L too. I am not having much confidence .

    Please advise for paid up or cancel the policy or stop paying premium so that the policy will automatically lapse

    1. Deepesh Raghaw

      Hi Anirudh,
      If you surrender now, you won’t get anything back. Making policy paid up requires 3 premiums to be paid.
      Not every decision in life can be mathematical.
      Purchasing this plan was not a good decision in the first place. Now that if you have already purchased it and don’t want to see your money go down the hole, you can continue this plan provided
      1. The premium is not a strain on your cashflows.
      2. It does not crowd out your other investments.
      In such a case, consider this plan as part of your debt portfolio.

      1. it is limiting my other investments. and carrying for 35 years is too late. I will be forced to continue and other better options of fund growth will be left unused.

        So, I prefer to make it paid up after 3rd premium. Kindly advise.

        1. Also, in addition to this. my agent told that I will be getting minimum 80 Lakhs post 35 years after completion of all premiums 60,000 X 35 years = 2100000 i.e 21 Lakh. I am not confident on this now as the sum assured is 20 Lakh. Out of parental pressure I bought it,

          Can you suggest is the return of 80 Lakhs post 35 years is actual or unrealistic and what would be the realistic amount That I will actually get if I continue investing 60K till 35 years.

          Kindly clarify.

          And Tonnes of Thanks too..

          1. Deepesh Raghaw

            How much annualized return your investment will have to earn if you were to get 80 lacs after 35 years?

  128. How much annualized return your investment will have to earn if you were to get 80 lacs after 35 years?

    Can’t Comment. Request your calculation please and or comments on the realistic matured value.

  129. How much annualized return your investment will have to earn if you were to get 80 lacs after 35 years?

    Can’t Comment. Request your calculation please and or comments on the realistic matured value.

  130. Very right deepesh.
    My father started paying for jeevan anand in 2015. Last month he died. I feel this was the worst investment we made .

  131. Hi,

    Thank you for this Article!
    Please help me on this query, this year only I bought Jeeven Anad plan and paid up my existing Jeevan Saral plan. What is your opinion on this? will you please suggest your insights here in terms of cons and pros? Thanks!

  132. Hello sir – need help..
    I have invested in 2014 in Jeevan Anand without adequate research.. I had paid premium for 5 years @ 33K every year Approx. 165,000.. However if i go for cancellation only getting 1,10,000..
    What’s your advise should i bear the loss.. ?

  133. Hi
    I am 25 years old and agent introduced me jeevan anand plan . In that the sum assured is 5l and tenure is 21 years .. Is it good openion to buy? Or suggest me something which suits me the best.

  134. Dear deepesh iam a senior citizen.I took jeevan anand in 2004 and it will mature in 2021 august.my premium is 8200 per year .For 17 years it is about 140000.My maturity amount will be about 180000.I took a loan of 100000 in 2019 for which i have to pay intereset of 4100 in four instalment upto aug 2021. in addition premium to be paid is 14000. What should i do.

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