Why buying an Endowment policy is not a good choice?

POSTED BY Jagoinvestor ON October 7, 2008 COMMENTS (542)

Today we are going to see why Endowment policy should be avoided in any portfolio and how other things are much better than Endowment policy with the same cost .

The assumption is that you understand what are Endowment policies and What are Term Insurance Plans, if you don’t know click here to read about it

endowment policy

A look at the Endowment Policy

An Endowment policy would look like this for a 25 yrs old

Tenure : 30 yrs
Yearly premium : 31,000
Sum Assured : 10 Lacs
Maturity amount : 23.1 Lacs ( this you get when you survive full tenure, It includes the sum insured + Bonus accrued)

This data is from website of an Insurance company.

Q . How much money to be paid every year? How much will the person get in case of Death or Survival? What are the Risk factors?

Ans :

Tenure : 30 yrs
Money outgo : Yearly 31,000/yr
Money received In case of Death : 10,00,000
Money received In case of Survival : 23,100,000
Risk : Virtually no risk (The only risk is when the Insurance company goes bankrupt)

What is the interest earned on this investment? 31,000 per year for 30 years becomes 23,10,000.

Annuity formula is :

Maturity value = Amount paid per year * [ {(1+r)^n – 1}/r ] * (1+r)
Here n = 30 years
and r = rate of interest earned

Putting all these values

23,10,000 = 31,000 * [{(1+r)^30 -1}/r] * (1+r)

The value of r which satisfies this equation is 5.4. Which means that the interest earned by the investment in Endowment policy is mere 5.4%, which is truly pathetic by any standard in India at least. There is no investment product known which is known to pay so badly.

The reason why people feel that endowment policy are so good is that they also get insurance cover ( which is virtually useless because its so less that it does not even cover the financial dependents to even a fraction of what they need in reality)

So can we mix Insurance + investments product which can be better than supremely better than Endowment policies and still cost the same( or even less).

Now let us see that by spending same amount (30,000, 1,000- less than the endowment policy) every year for 30 yrs, can one achieve better than this.

Watch this detailed video in which the difference between Endowment policy and Term plan has been explained from basic concepts

1. For Safe Investor (Let us first see a almost 100% safe way to do this)

Term Insurance of 30 Lacs for 30 yrs : 6k
Investment of 24k in PPF for 30 yrs : 30 Lacs (this is assured returns, as its invested in govt backed PPF, which gives 8% post tax returns )

Amount invested = 30,000 per year for 30 years (same as Endowment policy)
Amount received on death : 30 Lacs + investments done in PPF
Amount received without Death : 30 Lacs (investments)

2. For Aggressive Investor ( A person who can take more risk that the former one)

Term Insurance of 70 Lacs for 30 yrs : 14,157
Investment of 17,843 ( 30000 – 14157) in ELSS for 30 yrs assuming 15% CAGR : 92 Lacs

Amount received on death : 80 Lacs + investments done in ELSS
Amount received without Death : 92 Lacs (investments)

Equity investments for long term are almost risk free.

So, we can see here than in any case term insurance + MF is supremely better than Endowment policies.

#Solution for People who have taken fresh policies

People who have already taken fresh policies and have not completed 3 yrs should just forget there payments and stop there premium payments. The profits of switching from Endowment to “Term + MF” will be far greater than the loss from leaving Endowment policies.

#Solution for People who have completed more than 3 yrs

Either convert your policies to Paid-up or just surrender your polices and take the Surrender value (take your call on what you are comfortable with)

#Solution for people near the Maturity

You have almost paid most of the installment, so better stick with it, but don’t forget to insure yourself to a respectable cover through term insurance


Endowment policies according to me are totally incorrect and worst product i have ever seen (ULIPS are not far behind). It is structured and presented in such a way that investors are attracted to it. Agents present them in such a fancy way and give judgements which make these policies look like must have products.

Disclaimer : The exact figures can differ, this is just a demonstration of how Endowment policies can not be better than Term Insurance + MF combo. All the Insurance premium are for Aegon Religare Life Insurance and Mutual funds payments are considered monthly (amount/12).

All the view on this article are personal, some people may disagree with it which is totally acceptable.

542 replies on this article “Why buying an Endowment policy is not a good choice?”

  1. Hi, unfortunately I too am a victim of endowment policy. HDFC bank sold me the policy as an requirement to open a locker. As a newly married couple I thought this is also a good investment for future. Little did I realize about the trap. Anyways I am into the eight year of policy out of 12. I pay an yearly premium of Rs 36000 and sum assured is Rs. 319990. Product HDFC SL Money back policy. Should I continue to stay invested. What is the maturity amount expected. Current bonus amount stands at Rs .40419

    Thank you

    1. Jagoinvestor says:

      Maturity amount expected can be shared only by the company. More details are needed to find if its worth to close or not!


  2. Boney says:


    I am an NRI and was suggested the below, just wanted to know if I should go ahead. This is dollar based, I would like to know if NRI has other options to save in Dollars, or any other suggestions.
    Yearly Plan – 6878 USD for 5 years. Normal risk cover $55000, Accidental $110000
    Current Age 31. Returns From 45 to 65 years.
    Total payment – $34391, returns from 45 to 65 $114042

    1. It seems to be a Endowment plan only . Why dont you invest in Mutual funds ?

      1. Boney says:

        Thank you Manish for the quick response
        So since its an endowmnet stay away? Can you suggest me something in dollar as currency or is it better to take mf in inr. What should an NRI invest in.

        1. Just stay away !

          Enough is written on why Endowment is a big no no . You might want to explore mutual funds in India. Many NRI’s invest in Mutual funds. If you need help on this, you can look at our PRO membership


  3. prince says:

    My wife too got trapped (or say cheated) by Insurance agent endowment policy in 2013 with annual premium Rs 30,000 .
    Total Premium paid 90000. I am confused whether to continue or not. Insurance phone support are saying you will get only 20% on total premium paid minus 1st year premium amount which comes out to be just Rs8,000.
    They also told to visit bank for special surrender value which might be higher.

    Which option is better :-
    1) Surrender policy now (as it for 10 years term). Does bank’s special surrender value will be higher thna 18000 anyone have idea ?
    2) Continue with it . keeping paying 10 year 🙁


    1. JUst stop it ! .. thats painful , but better from long term perspective

  4. Gowthaman says:

    What will be the return amount of Lic New Endowment Plan 814?

    I purchased the plan this year (2016). I am paying the premium of 89000 P.A (Approximately inclusive of tax), the policy period of 12 years and my age is 25 years old. What will be the return amount after completion of 12 years (maturity period)?

    1. Hi Gowthaman

      The best answer you can get only from the agent you invested through or just contact the company. The thing is your case is a bit personalised and other than company, no one can give accurate information


  5. Avinash Sardesai says:

    Manish, I hope that after reading this article people planning to buy endowment policy will think twice before implementing the decision.
    Good to see a comparison of the option for a safe investor that very clearly shows how bad this investment is, at other places we generally see the comparison with only equty plus term plan.
    People do not realise that they are not doing any justice to either insurance or investment by going for such hybrid product.

    1. Thanks for your comment Avinash

  6. Aravind says:

    Hi Manish,

    This is a gratitude message to you. I am an ardent follower of your blog and most of my time goes by reading and re-reading your articles. I must say that it has increased my financial knowledge and impact of money on our life.

    I had a situation today where an agent from and tried to sell a product (endowment, traditional mixup of investment and insurance) and I was able to question her to the extent that she was not able to convince me beyond a limit. This knowledge which I have gained (like many people) is only because of following your blog.

    Kudos to the work which you are doing now and I could also see that you are increasing the usability of this blog by creating links for various financial instruments. My very best regards to you.

    Kindly keep writing articles and maximize the readership by various means.

    1. Great to know that Aravind

      Feel good to know that you were able to deal with that agent in right manner 🙂 . Thanks


  7. vikash says:

    Dear Manish,

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

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

    Thank you

  8. MFernandes says:

    Dear Manish,

    I have gone through most of the reviews, I am a parent 50 yrs of age with a 17 yr old son and 8 yr old daughter.

    I have sufficient Term insurance but No child plan cover. I intent to take a cover for my daughter for the educational expenses after age of 18

    Can you please suggest the best options LIC or otherwise which I can enter into immediately with Premium benefit waiver in case of parent death.
    Thanks and Regards,

    1. YOu can look at HDFC as a good option. If you want to take a term plan, we can help you connect with the HDFC team with which we have a tieup for Jagoinvestor Readers – Just fill up this if you want http://jagoinvestor.dev.diginnovators.site/services/life-insurance

  9. rakesh says:


    1. Hi rakesh

      I can see that you are interested in investing in mutual funds. I want to share that now you can invest in mutual funds with Jagoinvestor as your advisor

      We create a FREE online account for you, from where you can invest and redeem online.

      Our team will be happy to explain you more on this.

      Find more at http://jagoinvestor.dev.diginnovators.site/start-sip


  10. sudhir says:

    Hi sir,,my age is 27. I am planning to take lic new endowment plan (814) of 10 lacks for 27 years and my monthly salary is 50000. Please suggest me whether i should go for it, or should consider another plan or any changes to this……

    1. I dont recommend that product.

      1. sudhir says:

        Then, which policy i should go ….pls suggest

        1. Hi sudhir

          You should rather go for SIP in mutual funds . Its the best thing for long term wealth creation.

          Incase you need our help, you can let us know . My team will help you on that


          1. sudhir says:

            Yes Manish,,,i need help

  11. ROHIT says:

    Dear Mr. Manish,

    Help needed urgent.

    Sir, I also fell prey to Endowment plan described to me by Agent and at now I have paid half month’s premium. I have following options as of now:
    1. Forget the half year premium paid and move to term plan cover+SIP,
    2. Continue policy for next 3 year and surrender policy afterwards and recover the premium paid+bonus/interest accrued till date,
    3. Continue policy for as long as possible or wait for maturity benefit at retirement age i.e. after 55,

    pls advise asap, i m in big big confusion.


    1. mayank says:

      there are some endowments plan which are returning return of around 10 % .
      Use calculations to arrive at the IRR value. if its greater than 10 % you should go for it. You wont get such return with such coverage

      1. ROHIT says:

        Thanks sir, could you pls advise/name some plans to consider.

    2. Option 1 is suggested !

      1. ROHIT says:

        Thanks Mr. Manish. Could you pls suggest best term+sip plans available i.e. which is best acc to you. I m confused which one to chose.

        Following Plan from Max Life Insurance, i think they’r fooling or ………
        Premium Estimate (Annually) :7500
        Duration : 15 years
        Life Cover :75 Lakh
        Monthly Income :30,000 for 10 years


        1. Do you want me to connect you to my team who will help you on this ?

          1. Rohit says:

            Yeaah ! pls ….. it would be of great help.


  12. Raghu2528 says:

    Dear Manish,

    I was missold two HDFC ClassicAssure Policy Plus of 7 years and 10 years premium paying terms. The HDFC agent had ‘assured” me that the policy would be converted into a One-Time Single premium payment, as I had mentioned that I cannot pay the premiums for such a long time. My total annual premium is Rs.100,000 and Rs 40000. I have paid the first year premium on both. As with others, the agent is not contactable now and the company is not willing to convert into a Single Premium.
    What is my recourse – should I continue to pay till 3/4 years to get the surrender value ; or should I stop paying any more premiums.


    1. Hi Raghunath

      Yes, there is not official recourse on this now . YOu should pay for 3-4 yrs and then close it later

  13. Hello there!
    I’ve my aunt’s same policy and she has paid 12 premiums already.
    Do you think it worth it to;
    1. Make it a paid up policy and discontinue the premiums payable(if LIC has that option) OR
    2. Surrender the policy(certain loss to borne and how shall we know to the actual amount?) and re-invest in a better product like PPF and other tax saving alternatives
    Premium:Rs.6,887 YLY; Term:16 yrs; Dt:28/05/04; SA:Rs.105,000; Name:Endowment Assurance Policy(T No.14)

    1. Option 1 looks good to me

  14. mariadcosta25@rediffmail.com says:

    My son is 19 yrs. I want to take a policy for my son which has a long tenure, a less premiyn and a good maturity value with a life risk. plz suggest

    1. You can then combine a mutual fund with term plan

  15. Shailesh says:

    Do not buy insurance from LIC if you are not Hindu.

    LIC creates lot of problems while settling claims of Non-Hindus especially Muslims and Christians. They always ask for succession certificate (from lawyer) for claims from non Hindus which is costing nearly Rs.50,000/-.

    Always ask your agent or adviser if they have settled any claims before for Non Hindus.

    1. I dont think its true . Even if you are HINDU and your estate planning is not done, They will ask for succession certificate anyways

      1. Shailesh says:

        No. For Hindus it is not required.

        It is clearly stated by LIC office. One of my client is struggling for death claim of Rs.80,000/- since last 8 months.

        1. Thanks for sharing that !

  16. Hi Manish,

    I feel only investment for long term doesn’t make sense, one has to review his/her investment in regular basis, especially in case of Equity Funds as i feel non review of portfolio defeats the say ” Investment in equity is always profitable”

    My suggestion to all investor is that do make systematic and for long term investment driven by some objective. Make sure you review it in regular basis.

    1. Definately .. just investing today and looking at it after 15-20 yrs if foolish, review is part of the strategy !

  17. Sunilkumartiadi says:

    Hiii Manish,

    I am planning to start a Saving plan of Rs.3000/month for 15 years. I am 28 now. I am ready to take moderate risk. Please suggest how much should I put on term insurance and how much on other instruments. Which will be the best investment option for my requirement?? Please suggest


    1. Hi Sunilkumartiadi

      Looking at your query, I think your case is complicated and you should discuss and consult a financial planner, because just a random answer will not help you at all.

      If you are interested, I suggest you look at our financial planning service also and fill up the form there to have initial discussions



  18. usha says:

    am planning to take a policy for my 2 kids aged 13 and 6 for their education. LIC policies are confusing and i need your guidance as how to give them an assured risk free return after 10 years. Can i opt for the new children money back policy

    1. If you really need risk free return, I suggest invest in FD or debt funds. I wont recommend LIC policies as such

  19. gowtham says:


    I have been reading your articles from past 3 months and came to know that endowment policy should be avoided but I have a question regarding this

    1) I have an LIC endowment Assurance policy “ Plan no – 14”. I have taken this policy 4 years ago(April/2011) and my age is 27 now.

    Sum assured : Rs 6,00,000
    Base Premium : Rs 38,000 yearly
    Policy term : 15 yrs
    Frequency: Annual.
    Total maturity benefits : Sum Assured + Bonus + FAB If any
    approx I would get 14,00,000 returns after total maturity.

    As per this article, PPF is much better than endowment policy but in PPF if I would invest same amount for 15 years, I would only get 12,00,000.
    Please give me your valuable suggestion in this case.


    1. Hi gowtham

      The best answer you can get only from the agent you invested through or just contact the company. The thing is your case is a bit personalised and other than company, no one can give accurate information


    2. mono says:

      ARE YOU MAD..
      LIC WILL GIVE YOU 14 AND PPF 12…????

  20. ManojSaha says:

    I am 23 yr old now. 2 weeks ago i bought HDFC click2invest ulip plan at a premium of 3000.00/month for 15 years. They promise me that there is only FMC and mortality charges applicable, even there is no Service Tax till the end of my policy. My qsn is, is it okay for me? Is it best? or anything you can suggest me.

    1. This particular ULIP really have very low charges in FMC and no additional charges . Its ok to go with it .

  21. PuneetWadhwa says:

    Hi Mahish,

    Firstly I would like to appreciate about the important information provided at your website. I have gone through the information provided at your blog and understand that endowment policies are not good at all. Now I am really having concerns for 2 LIC policies for which currently I am paying. Details are as below:

    Policy #1
    Policy Name: Endowment Assurance Policy (T No 14) – Normal Premium Paying Policy
    Policy Term: 16 years
    Yearly Premium: 12,468/-
    Commencement Date: 24/01/2011
    Sum Assured: 2 Lakhs

    Policy #2
    Policy Name: Jeevan Saral Policy (T No 165) – Normal Premium Paying Policy
    Policy Term: 15 years
    Yearly Premium: 6,005/-
    Commencement Date: 23/12/2013
    Sum Assured: 1.25 Lakhs

    Kindly Suggest should I continue with them, surrender them or make it paid up.

    Puneet Wadhwa

    1. Puneet says:

      Still awaiting your reply.


    2. I suggest make them PAID UP

  22. Saurav says:

    Hi Manish,

    I have an LIC endowment plan “New Endowment Plan – 814”. I have taken this policy six months ago and my age is 29 now. From last couple of days I have concern regarding this plan and i think it is a waste of money.

    Please find the below extracts from policy document:

    Name: Lic’s New Endowment Plan – 814
    Sum assured: Rs. 11, 00000.00
    Base Premium: Rs. 68, 833.00 yearly
    Policy term: 16 yrs
    Frequency: Annual
    Total maturity benefits: Guaranteed +Illustrated benefits [approx. Rs. 23, 00000.00].

    Now my questions are:
    Is it advisable to continue this policy or not?
    Should I surrender it or just stop paying premium?
    Should I continue for three years?
    I think to continue with this policy is just waste of money and time!


    1. Yes, i suggest make it Paid up

  23. mayur tambe says:

    Hii sir,my name is mayur tambe.n my age is 25 yr. i brought a endowment policy but i want to cancel it,now my policy is in free look period so what reason i mention in free look period form.because i realize that i brought a wrong product..

    Name : MetLife Endowment Savings Plan.
    • Sum assured : Rs 285754
    • Base Premium : Rs 25121 yearly
    • Policy term : 15
    *premium pay term:10 yr
    • Frequency: Annual.
    • Total maturity benefits : Guaranteed +Illustrated benefits ( 4 % – 221984and 8 % – 246186). Plz guide me…

    1. Just share that you dont need it now . Its not fitting your requirement

  24. Nakul says:

    Hi Manish,

    Firstly I am a big fan of yours.

    Now having said that I should have not done this crime of opting an endowment plan. But the crime has been committed (already fired the bullet). I have an endowment plan of “Birla Vison Plan”. When I was 23 years old just got my job . So started reading personal finance and came to know we should first get some good life and medical insurance. The only mistake that I did is to not read the definition of “Good”. I called one of our family insurance advisor(Agent). And the rest is history. Details of my policy.

    Premium ; 30K annually.(that includes riders of 4K, so actual premium is 26K or even lesser)
    Term: 30 Years
    Cover: 8 Lakhs
    Maturity Value with 6% and 10% as per illustration : 1,992,300 and 4,191,360.
    Already paid : 90K
    Surrender Value : 15K
    Death Benifit: (8L + Fund Value).

    Now my question is:
    Should I surrender it or make it paid up. I think to continue with this policy is just like committing suicide now. And the second question is If i surrender my policy what will be implication on Tax deduction that i took under 80C for past 3 years. Is it going to affect my CIBIL score. I am planning to buy a Flat so I will be applying for home loan as well.

    With simple calculation of Compound interest. If put the surrender value in an instrument having returns of 7.5 for next 27 years it will give the final value as 105710.91. So I think if I put this amount in some good ELSS it will be much more bigger.

    Please give me your best suggestion on this case.

    1. Yes Nakul

      It makes sense to surrender it . If you have crossed 3 yrs, then the 80C benefit which you have taken will not be reversed


  25. Krishna says:

    Hi Manish,
    I would really appreciate your suggestion with the following endowment policies that I am paying for my parents. Should I surrender or make them paid-up? I know already that continuing to pay is not a good option after reading your article.

    LIC – The Endowment Assurance Policy (T.No.14)
    Commencement Dates – 25/06/2013(Mother), 18/6/2013(Father)
    Sum Assured – 2 Lakhs each
    Policy Term – 16 years
    Premium – 13845 (Mother) 15970 (Father)

    I just recently paid the 3rd premium for these in June.

    Thank you,

    1. Hi Krishna

      I think you should make it paid up or surrender the policy.


  26. mani says:

    Hello Friends,

    Need advise on one of the questions for my friend, who works in an IT MNC in Bangalore and is currently 23 yrs old.
    He was been asked to take a policy whose details are as mentioned below through one of his relatives.
    Please find the below extracts from the policy document.

    • Name : MetLife Endowment Savings Plan.
    • Sum assured : Rs 312,300
    • Base Premium : Rs 30,000 yearly
    • Policy term : 10 yrs
    • Frequency: Annual.
    • Total maturity benefits : Guaranteed +Illustrated benefits ( 4 % – 330,890 and 8 % – 380,405).

    Questions :
    Let me know whether it is advisable to take this policy.
    Is there a lock in period OR whether premature withdrawal is allowed.
    Can this been shown for tax savings in his company. Got to know it can be shown in some 10B/10C but not sure whether this can be submitted for tax savings for his company.
    Is this linked to BSE share market.

    The insurance agent has also said that if he is not interested in the above plan, he can check out for MetLife Money Back Plan – Guaranteed Non Participating Money Back Plan.
    Let me know whether it is advisable to opt in or opt out of the above mentioned plans.


    1. Hi Mani

      These are money back and endowment plans and are not recommended for anyone, esp youngs .. so ask him to just avoid it. Its worst plan

  27. ENISH BAHL says:

    i have PNB metlife endowment policy and paid one premium of 25000 . should i continue this policy.

    1. Hi ENISH BAHL

      The best answer you can get only from the agent you invested through or just contact the company. The thing is your case is a bit personalised and other than company, no one can give accurate information


  28. arun says:


    i am holding jeevan saral for last 5 years for a period of 21years , paying premium of RS.60,000/yr , please let me know shall i continue with the same or not.



    1. Hi arun

      I think you should make it paid up or surrender the policy.


  29. jogendrak says:

    Hi Manish,

    I am truly enlightened with your knowledge in this field. Thanks a lot for the good work you are

    doing for the society. I need your suggestion on one of my policies.
    I am in bit of a dilema whether to surrender or discontinue my policy “Max Life Life Partner Plus

    Limited Pay Endowment to Age 75 Plan” Tenure – 20 Years. This policy has Total Sum Assured of base plan and

    term rider (if any) : RS 3,99,802. I have already paid 4 premiums for this policy. However due to

    some challenges, I will not be able to further continue with this policy.

    I enquired and got to know that even after paying more than 1 lac towards premiums, the

    surrender value is somewhere arpund 39 K if I decide to do so.

    Please advise what should I do in this case ?

    Should I go for surrender ? or Is there any other option to save maximum on my hard earned

    money ?
    How about if I just stop paying the premium and discontinue the policy ? Please help me with the

    PROs and CONs of these options.

    Thanking in advance

    1. Hi Jogendra

      I think you should make it paid up or surrender the policy.


      1. jogendrak says:

        Hi Manish,

        The “Non Forfeiture Option” mentioned for my policy is “Reduced Paid Up”. I am not quite sure what this means ? Can you please provide your insight on this ?

        Also by discontinuing the premiums, will it be paid up automatically or should I have to write them a mail in order to make it paid up ?

        Thanks in advance

        1. Hi Jogendra

          I believe the paid up amount which was promised to you on maturity is reduced because of the paid up option. Also you can just stop the premium payment , but I suggest also emailing them once about it. Anyways its a small action !

  30. Ankit says:

    Hi Manish,
    May I have some contact information on my email for taking professional Financial Services.


  31. Muchhal N says:

    Dear Sir,
    I have also taken New Endowment plan of LIC in Feb 2015 for annual premium of 70K. I am now realizing the interest/return is very less. So planning to surrender/quit. Any way to get some money back??…Can it be exchanged with any other good policy of LIC? WHAT are other good options to invest e.g., PPF, MF, or Religare. someone suggested Future protect cum insurance plan?? how is it?? any other plan of established Pvt insurance cos.

    1. Hi Muchhal N

      I think you should make it paid up or surrender the policy.


      1. Nitin says:

        Thank You Mr Manish… I am doing so.. just applied a application if something can be refunded else not going to pay further….

        Thanks and Regard
        Nitin Muchhal

        1. Welcome .. Glad to know that Nitin ..

  32. Akshay bahl says:

    Sir can u please reply to my question??

  33. Akshay bahl says:

    Sir I forgot to mention above that it’s a money back policy and I’ve been promised a return of ₹1.5 lakh every 5th year..

    1. I suggest dont depend on promises if it was verbal . See the policy document and what is written in that !

  34. Akshay bahl says:

    Dear sir,
    1. I’m an army officer 36 yr and I’ve gone through ur comments on this site and have come to conclusion that EA policies are a waste of money n efforts, thanx for this.
    2. Being an army officer we are moving very frequently sometimes to inaccessible areas hence are not Updated with the current financial happenings..
    3. I’ve been misinformed and sold a LIC money back policy T-T 93-25 with sum assured of 10lakhs for which I’m paying an yearly premium of ₹55066/- which is paid out of my DSOPF directly.
    4. I’ve paid 2 premiums and the third is due in Jul. as I’ve understood, if I surrender the policy I’ll lose 1.1 lakh.
    5. Please guide should I continue paying the third premium or stop and incur the loss..
    6. If I stop than how should I go about my investment.
    Waiting for an early response thank you
    Regards Akshay

    1. You are in a bad shape right now . I suggst better close the policy and dont pay anything further.

  35. rohan says:


    i am 25 yr old and my annual income is 4.5 lacs. I want to take some policy which would give return as well serve the purpose of pension lately.
    Kindly suggest some LIC policy.


    1. Hi rohan

      I think you should better start SIP’s in mutual funds for this

      1. rohan says:

        hey Manish,

        Thanks for quick reply though!!

        Could you please give me the pros and cons of the same and also elaborate a bit about it.


        1. Pros and cons of what ?

          1. Rohan says:

            Thanks for reply Manish!!

            Pros and cons of SIPs?

            And also if can i start PPF also in order to save tax and for investment as well. I am 25 years old and planning to buy car in 5 years.

            Kindly suggest.


  36. K V Ravichandran says:

    I started an Endowment Assurance Policy Table 14 in 1999. The maturity is July, 2016. Sum assured is Rs.1,00,000/-. Annual premium is Rs.6,326/-. What is the maturity value roughly.

    1. Hi K V Ravichandran

      The best answer you can get only from the agent you invested through or just contact the company. The thing is your case is a bit personalised and other than company, no one can give accurate information


  37. Murali Madugula says:

    Hey folks, I am planning to take up Endowment Insurance plan as suggested by on of my colleague. Seriously, I don’t have an idea of what Endowment plan actually do?

    Can you please walk me through the process, risks, benefits, things I need to do, payment options whatsoever related to Endowment insurance?

    Hoping to listen from you soon.


  38. Deepali says:

    Hello Sir,
    I have taken a LIC Endownment Plan (table no. 14) in 2010 at the age of 28. There are 7 policies, each sum assured 2,00,000 and term is 20, 22 , 24, 26, 28, 30 and 32 yr with total premium of 51k yearly.
    I have below queries:
    1. which bonuses are applicable to my policies at maturity? (from above GA, LA, FAB)
    I can see only vested bonus online. Can you please help me to calculate maturity amount?
    2. how surrender value is calculated in this case as i have paid 5 premiums?
    3. Is it ad visible to surrender theses policies and reinvest the money to get better returns?

    Your advise is valuable.
    Thanks in advance!

    1. Its better that you make these policies paid up now . Regarding the bonus part, its better to talk to LIC On this


  39. basheer says:

    I have an endowment policy, table 14 and completed 5 and half years already by monthly debited Rupees.1595/-. Can you please assist me whether I surrender that policy or if not how much amount I got at last, since the total term of the above said policy is 35 years.

    1. I suggest you need to get in touch with the LIC or the agent, they will help on this .

  40. pankaj says:

    hi manish
    i taken marriage endowment policy table no. 90 , and already i paid 2 -years , i am paying 31000 per year, but policy agent told me you only pay up to 10- year , after that 17th year lic will return lumsum 17 lakhs, is it correct?
    what i will do, can i stop this policy?

    please assit me,

    1. Hi pankaj

      Check your policy documents , what does it day ? Does it mention Rs 17 lacs return ?


  41. sameer says:

    Sorry for the above post, I have maintained my portfolio in excel so just copied it.
    Here is my portfolio in better way –

    1>Birla sun life tax relief 96 fund SIP – 3000 p.m – started in july 2008. Reedemed 3 years over investment – 117,000 investment redumption amount 255,000.
    Current investment 120,000 current value -201,588.

    2>Uti Mid cap fund – SIP- 1,000 p.m – started in feb 2011, amt inv till date 48,000, redumption amount – 102,000. Sip to continue till Jan 2016.

    3>Icici Pru life stage pension – 20000 P.A, amount inv till date 140000.Start date – may 2008 End date – may 2030. Current value – 234365

    4>Aviva Saveguard ULIP – 30000 p.a, amt inv till date 270,000. start date – dec 2006, end date dec 2021. Current value – 345798.

    5> LIC Jeevan saral Endowment plan- 6000 p.m for self & spouse – started in april 2012 end date – march 2047. aprrox 15 lacs insurance cover

    So as I read your blog ULIP & Endowment both are bad and I made both mistakes.

    I also have home loan out standing liability of approx. 23 lacs.

    I wanted to ask 2 questions. One obliviously when can I get rid of both ULIP & Endowment plans.
    Second is how can I diversify my portfolio well and also reduce my home loan liability.


    1. Sameer

      Please ask open ended questions.

  42. sameer says:

    Hi Manish,

    Please find my portfolio below. I have been fooled by ULIP+endowments now really wants to make better decision

    Policy Provided Type Frequency Amount of inst total prem paid Total Current Value Sum assured Redeemed amount Profit booked star date end date
    Birla sun life ELSS Monthly 3000 120000 201588 7/21/2008 7/20/2035
    Uti Mid cap Fund MF Monthly 1000 47000 2/25/2011 1/25/2016
    Icici Pru life stage pension Pension Annual 140000 234365 5/17/2008 5/17/2030
    Aviva- ULIP ULIP Annual 270000 345798 225000 12/11/2006 12/11/2021
    LIC Jeevan saral- self endowment Monthly 5000 4/1/2012 3/31/2047
    LIC Jeevan saral- spouse endowment Monthly 1000 4/1/2012 3/31/2047
    LIC Jeevan saral- kid endowment Annual 4804 3/9/2013 3/9/2038

    1. Hi sameer

      You need a full portfolio cleanup . I suggest going for a paid service.

  43. Pankaj Gupta says:

    I have 25 years money back term insurance plan from LIC, want to close it as Paid up, how to do that and should I do that..I am not thinking it is benefitting me

    1. Hi Pankaj Gupta

      You just stop the payment of premium and it will be converted to Paid up policy automatically (only after 3 yrs of payment)

  44. Bhanu says:

    Hi Manish,
    need ur expert advice. I have one LIC pension plan. I am investing Rs.27600 per year in that. On retirement i will get a sum of Rs.17,00,000 plus pension of Rs.22,000 per month. I want to invest more. My agent suggested LIC enodwment plan. After reading your article i am thinking against it. Pls suggest me a good plan. I am also investing in SIP. Should i go for more mutual funds or ELSS or PPF. I am confused among these. Pls suggest a plan which is good for me in long run. I can invest upto 6000 more per month.

    Awaiting your response. Thanks for your time.


    1. Hi Bhanu

      Go ahead with SIP in mutual funds only !

  45. Vasan says:

    Hi Manish,

    I am not sure how exactly to calculate Interest rate of return.

    We invest 5 lakhs over a period of 5 years and the return we get is 5 Lakh + 3.75 lakh. So per lakh we are getting 75000 back its almost 75% returns over 5 years.


  46. Vasan says:

    Hi Manish/Experts,

    SUB:- Need your advice on decision making to invest in a Endowment Plan

    I know that Endowment plan not the the best when Insurance is considered as Investment. Just look at the below plan and let me know if this is OK for short term investment (5 years)

    Aegon Religare Premium Endowment Poicy

    1 lakh per year as a premium, so 1L * 5 Yr = 5,00,000 (Sum assured amt)

    Gurantee bonus as 5 % from sum assured amount, 500000*5% = 25000(every year), for 5 years = 5*25000 = 125000
    Non Gurantee bonus as 5 % (but they gurantee) from sum assured amount, 500000*5% = 25000(every year), for 5 years = 5*25000 = 125000 (They are investing this money in GOVT INFRA BONDS)
    Begining of 6th year = 25% from Sum assured amt ==> 25/100*500000 = 125000 (giving as Tr bonuss)
    25% for 5 yrs, and 50% for 10 yrs
    atlast we will get the total amt as below
    500000 – Sum assured
    125000 – Gurantee bonus
    125000 – non gurantee bonus (But the amount 125000 is minimum they quote max is based on perf of bonds)
    125000 – TR bonus (Traditional – TR….)
    In addition, In case of death ==> thry will provide the sum assured amt(i.e 500000)

    Medical insurance => for 1 lac premium => 4 lakhs medical insurance from IHO (pre existing covered and appplicable for 5 years, not 4 lakh per years, its 4 lakhs for entire 5 years)

    1. The question is – what is the IRR of the policy ?


  47. swami says:

    I heard an SBI life’s endowment plan – shubh nivesh plan for 7 years. the agent told me that upon investing 50K for 7 years(sum assured 3,00,000) i get 6.2Lakh in 8th year (4% revisionary bonus + 3% interim bonus + terminal bonus 25542 every year) or i can convert it for pension of 5800 for entire life. i belong to category 1 in your article (Safe Investor). if i invest as safe investor (10K in term insurance ) + 40K in PPF then as per my calculation upon survival , i get 70000 from term insurance and 394795 from PPF which is 464795 which is 1.5 lakh less than the endowment plan. Here endowment plan seems to be beneficial, can i invest in endowment plan, Is the agent cheating me on terminal bonus or on any thing else, please advise.

    1. Hi swami

      Terminal bonus or reversionary bonus part – IS IT FIXED ? Is it written in your documents ? If yes, then you can just continue that

  48. Adi Baish says:

    i have seen the suggestions. Please kindly look into my financial status. I am paying an premium of nearly 60000 in lic endowment policies plus i have term insurance for 50 lakhs. I am thinking about opening an ppf account and am looking to be free from emis in coming two years. I am 28 years old

    1. Yes, its a good idea . See if you want to continue your endowment plan

  49. arun says:

    I have endowment assurance with DAB table 14 for a term of 16 years and sum assured of 550000. i have paid three premiums. but I think today there are much better investment options. i learned about the surrender value and also about continuing as paid up policy. I m confused . kindly advice wat I should do ?

    1. Check what is the surrender value from your company first and then take the decision

  50. AbPor says:

    Dear Manish,

    I was searching for some honest review information regarding endowment plans and got lucky to have found your recommendations. After going through all the information, I am so pissed of at myself that I was taken for a ride by my LIC agent. I have New Bima Gold (T-179) with term of 20 years (Jan,2011) and SA of 15,00,000. The premium that I am paying is Rs 55224. I have paid 5 years premium already and I have received survival benefit of Rs 150,000 this year.

    I was anyway having double thoughts about paying such hefty premium every year, and after reading your recommendations, I have completely decided to drop-it. Now the questions, should I surrender it or keep it paid-up?

    I have term plans and PPF, so that way I am bit okay. But I want to save up on this premium.

    Please suggest.

    1. As you have got 1.5 lacs recently,. Its better to now stop it .. just surrender it

      1. AbPor says:

        The surrender value is 36K right now? Basically nothing much to gain or lose? Will the surrender value reduce next year if I surrender around the premium paying time?

        Thank you once again.

        1. I believe you have got this 36k figure from LIC itself . if Yes – then thats the surrender value .

  51. Atul Kumar says:

    Thanks Manish. I just need some suggestion like if I receive 80% or 90% of total amount I have given in 7 years, Would it be good decision to surrender them or do i go for Paid-up ?

    1. You can get the exact % only from LIC itself . Talk to them about surrendering to find out how much it will be ?


  52. Atul Kumar says:

    I have taken Endowment Assurance Policy (T No 14) from LIC in 2008, It has 24 policies with different Policy Term. Total Amount yearly comes out Rs. 49,555. So I have paid amount for 7 years till now, so total amount paid to LIC is 346885. I want to surrender these policies. I want to know how much amount I will receives if I surrender these policies now? Please help.

    1. Its best to check this with LIC itself , Ask them what would be the “surrender value” of your policies ?

  53. Venug says:

    Hello Manish,
    Nice to see your blogs, it’s very impressive and gr8 help people like us.
    I would like to talk to you, please let me know your contact number.
    Planning to do some investment.
    Thanks and Regards,

    1. Hi Venug

      You can reach us on services page – jagoinvestor.com/services

  54. MOHAN says:

    Dear Manish

    I want to invest Rs. 50 k p.m. for next 15-20 year, kindly advised me. Currently i am possessing 2 lic endowment policy when in i am paying rs. 72 K premium p.a.
    I am open to invest in PPF, Term Plan or any other option wherein i get a good return



    1. Hi Mohan

      I think over a long term , mutual funds are a good option to invest as equity is the right product to choose for long term ..

      I feel you can take professional help if you are very serious on this . Check out our services page – http://jagoinvestor.dev.diginnovators.site/services

  55. Sujit kumar says:

    Can you recommend any other plan under ICICI ?

    1. No Sujit .. I have no recommendations

  56. Sujit kumar says:

    Actually I have paid through online banking.

  57. Sujit kumar says:

    My bad luck as I came to your blog just after paying first premium for ICICI saving suraksha scheme where I have to pay 1lac every year for 10 year then wait for 5 year to get 130000 annually till my death and then to my wife toll her death.
    In your opinion what should I do now.I just paid the first instalment yesterday.The policy is yet to be accepted but out of my hand now.

    1. Hi Sujit

      You can cancel a policy within 15 days of receiving it, its called “Free lookup period” in Insurance. If you have paid by cheque , then call your bank and cancel the cheque payment .

  58. sandip sharma says:

    Hi ,

    My name is Sandip ,

    I am looking for a policy for me and for my mom….

    We both are working , My mom is in govt services and i am also….

    Her details are :: 13/06/1967 , We can invest around 30-35 k for her

    My details are :: 01-09-1988 , can invest around 30 for me …

    I am very confuse whichh way to go ?

    Which policy to choose ?

    Which will help me in getting lum sum , good rate of interest , life cover etc etc


    Looking forward to get a easy and quick response from you

    Sandip Sharma

    1. What kind of policy are you looking at ?

    2. Raja says:

      Hi Sandip,

      You can check above….the article….where I have written about options to invest…in case you are not aware as where to invest.

  59. Raja says:

    Hi Manish,

    Your articles are really good…..I also do the financial planning thing.
    Just want to ask you if you have 20k to invest in a month….how will you diversify….or what investments you will choose……Age of the person being 28…

    For individuals who are not sure as how to invest and make your future secured,
    I have laid a structure of my investments …which I do and recommend others

    1. PPF – 1,50,000 PA
    2. Mutual Funds – 15k PM(Recommended – HDFC TOP 200 + ICICI Focused Bluechip+HDFC Mid Cap+Reliance Pharma Fund.(Always have a sectoral fund)
    3. LIC – 35K PA(Endowment + Term Plan)
    4. Health Insurance Plan – 10,00,000 Cover (Premium – 9000,PA)
    4. Surplus Amount, if any – FD’s

    After investing in above….your future is definitely safe…..as per my calculations
    In case any one has questions…..
    Please correct me if I am wrong.

    1. This looks good enough , but you cant generalise it to everyone . Others might have a very different view point .

    2. Manish Jaiswal says:

      Hi Raja,

      That looks good!

      Just wanted to know which health insurance plan have you gone for (10L for 9k PA)?


      1. Raja says:

        Hi Manish (Jaiswal)
        There are few considerations before taking a perfect plan…….I have taken Max Bupa Heartbeat plan since I am single………if you are looking for your family than you can opt for Max Bupa Family first plan, thats a very nice plan …you can add all your family members including your father/mother.

  60. Sachin says:

    Hello to Everyone
    I thank all of you & specially Mr. Manish for sharing your experiences and suggestions about the insurance. Manish I am 30 and salaried. I have also done the same mistake as others. 1.5 months ago I have purchased one New Jeevan Anand Policy with annual premium of Rs.38k sum assured Rs. 5L and tenure 16 yrs. And also Term Plan of Rs 1 Cr from Aviva with prem of Rs 8K for 35 Yrs. As per discussion above I should stop my Jeevan Anand policy and distribute my 38k into PPF, MF/SIP and a Health Insurance. Can you please advise me whether my decision is correct or not and calculate what amount should be invested in each of the above options?

    1. You can first take the health insurance for 5-10 lacs and then rest can be invest in mutual funds. We can help you in both ..

  61. Shijo says:

    Hi Manish,
    An excellent site you have going here. So much useful as well as relevant information and you seem to be tireless in dissecting the details of some of the requests posted here.Thank you for sparing the time and effort to advice about investment pitfalls.People like me definitely need guidance.

    I am 36,salaried (private sector),wife employed (public sector),one daughter 2.5yrs,no home loans,rented house,one car loan,no serious medical conditions till now, stopped smoking(social) three years back. Currently I have a Jeevan Anand policy with premium of around Rs.5100 p.m (term =21yrs ) and assured of 11 lacs started last year.I had five other LIC policies that were started 6 years(one policy) to 4 years back (4 policies) all of which I stopped paying on the advice of my new LIC agent who made me take the new policy!!.Yes I fell in for his sweet talk and doomsday prophecies. Also I was not THAT bright or was too lazy to understand the nuances of insurance. But luckily I came across an article about PPF and that got me started .I scoured yours as well as some other sites and was dumbfounded on the impact of my carelessness.

    And with all this new information I am thinking of putting the below plan into action,
    1.Stop paying premium for my LIC policy. – saves ~ Rs.5200 p.m. I have already payed around
    2.Continue with wifes’ LIC policy – same Jeevan Anand, started last year .
    3.Take a term insurance for 24 years for 60lacs – bearing in mind my past history of smoking what would be your suggestion?
    4.Take a super top-up plan family floater as I have company insurance upto 4lacs for family.
    5.Increase my VPF a little bit more and open a PPF account with a small amount.As and when I can I will put in more amount.
    6.A home loan is a probability in the very near future so apart from the above I don’t think it would be wise for me to invest in anything else .
    7.Future plans include opening a DMAT account/start MF account and plan for some long term goals.

    If possible, could you suggest any modifications ?

    off topic – What is your opinion on LIC housing Finance?


    1. Shijo

      I think you are on right path .. You should definitely take term plan and health insurance and plan some thing for your house downpayment . I am putting up an email to you on all this

  62. Sourabh Shrivastava says:

    Dear All
    Let me ask you one question how many of you have created wealth through SIP or any kind of a liquid investment.Remember that piggy box in which you used to save in early age and the key used to be with your parents.Does it paid you any interest ???.

    i also advise mutual funds but they are liquid instruments where the investor always want to withdraw at market peaks (which he thinks is the peak) and again parks his money into a saving bank account with 4 % interest.

    Endowment Policies are pressurized savings in which one will have to pay the premiums.
    you can always take a term plan along with an Endowment plan it will be an icing on the cake.

    1. Yes thats a good point .. Then why not invest in ELSS funds , so that money itself is locked ?


  63. Tushar says:

    My wife wants to invest in a plan which will give the benefit similar to a LIC’s Money Back – 20 years (Plan No. 820) or which is somewhat on the lines of Lic New Jeevan Anand…I am myself not convinced with both citing the IRR on both but it is very difficult to convince her. Can you suggest some investment avenue where these requirements can be met???


    1. I am not sure exactly what you are looking for .. please post your query on http://www.jagoinvestor.com/forum

      1. krish bharma says:


  64. A Rao says:

    Hi Manish,

    I’ve the below LIC policies for which I’m paying around 40k/annum.
    Just wanted to know if I can stick to these or convert it into a PAID UP policy.

    Jeeval Anand T No 149 – started in 2002 – 30 years PPT
    The Endowment Assurance Policy T No 14 started in 2002 – 30 years PPT
    New Bima Gold T No 179 started in 2007 – 20 years PPT
    Jeevan Anand T No 149 started in 2007 – 25 years PPT
    Jeevan Saral T No 165 started in 2009 – 20 years PPT


    1. Hi A Rao

      We generally recommend a PAID UP option for all the endowment and moneyback plans ..

  65. Sher says:

    Hi Manish,

    Thanks for the wonderful article ! I have been reading your blog for quite some time now and it has helped a lot in terms of understanding of various aspects of financial planning.

    You have also helped me in fending off various bank’s ‘relationship managers’ and ‘wealth managers’ who tried to sell ULIPs and Endowment plans to me 🙂

    Finally i had decided to go to professional financial planner and am currently in discussion with one such agency/company. Like i have learnt from you, i have been very dilligent in asking details about each and every recommendation given by them. However as of today i am slightly confused about a few of them and would like you to guide as an independent expert, if you have time.

    1. Life Insurance – I am 35 years old and already have a 50L term plan from Aviva. I plan to increase this to 2 Cr and therefore am planning to buy another 1.5Cr term plan. As i have learnt from your blog as well as others(Safal Niveshak) one should simply go for an Online Term Plan and take the cheapest one. As long as one declares all the information correctly, there is probably no need to be worried about claim rejection. So by that standard the cheapest policies are from Aegon Religare and Aviva.
    However, the planned insists i buy Term Plans from HDFC, ICICI etc which are considerably costlier. Do you think I should fall for this?

    2. Endowment Plans – I have spoken to 2 financial planners/agencies over the past 3 years and although they have been forthcoming in terms of not recommending ULIPs and focusing mainly on Term Plans, Health Insurance, Mutual Funds(SIPs) etc for retirement planning, they both have mentioned having 10-20% component for retirement coming from Fixed Maturity Plans such as Endowment.
    They insist that even though the charges may be high, insurance cover low but one should definitely have a guaranteed return component in the portfolio.
    Now i have been very forthright in rejecting this based on what i have learnt through your blog and others but now I am curious if there IS really some truth to this.
    Can you please help by commenting on this? Also whether other fixed maturity plans such as FDs, RDs or PPF should not be used instead of an Endowment Plan?

    Would highly appreciate any help that you can provide towards answering these questions.

    Thanks !

    1. Thanks for sharinhg your actions Sher 🙂

      Here are my inputs

      1. You are right to say that you can go with any term plan company, so go with Aviva or Aegon, but what the planner might be suggesting is his personal view, Is the planner asking you to buy the policies from him/her personally ? Will they get a commission on that ? If Yes, it they are biased ? If not, still they may have their personal view that HDFC/ICICI are better. But I dont think that point is correct .

      You can surely go with AVIVA or SBI , they are both very cheaper .. I am not saying Aegon has issues or problems ,but I somewhere dont connect with them very well , so i would like to avoid it personally.

      2. All financial planners don’t think like that, what they are suggesting is their belief , Now again, are they asking you to take the policies from them ? If yes, somewhere they might be biased, but if not, still they might themselves believe that it should be in your portfolio , if you want security only, then you have other options as well like PPF , FD etc .. So now its your own judgement , if you really feel you want or need endowment, go for it , else dont . A financial plan is just a blueprint or roadmap suggested to you, now after that you can surely make your personal changes which suits your thinking .

      Btw, we also offer online financial planning , May be you didnt knew – http://www.jagoinvestor.com/services . Best of luck


      1. Sher says:

        Hi Manish,

        Thanks for the prompt revert. I highly appreciate it.

        Actually you are right on both the points. I just wanted to bounce the idea with you so I could get an expert advice and a neutral non-biased view.

        For term insurance, i believe i would just go with whichever is cheaper so maybe Aegon or Aviva. You mentioned SBI term plan is cheap however i find that the quote for 1.5Cr term plan for 25 years(for a 35yr smoker) is 44310/- whereas the same in other plans(like Aegon, Aviva ) is in the vicinity of 25k/-.

        Secondly, like you correctly mentioned a person may have an individual tendency of going with endowment plans. However, since i have been already mis-sold a ULIP by my “relationship manager” from Citibank, i generally have stopped trusting any plan which has a lock-in period and encurs hefty charges 🙂

        The only point which i feel is positive about the endowment plans is that it is Guaranteed money. One can argue that FDs and PPF are also good alternatives but when we look at a 20 yr period, it may be the case that the rate of interest for both of these(decided by the Govt) keeps going down as(& if) Indian economy progresses and we inch towards becoming a developed nation.
        So in that case, it MIGHT just makes sense to get invested in an endowment plan IF the rate of overall return on investment beats inflation and it is guaranteed.

        What do you think?

        P.S – I would have loved to have you as my financial planner but I prefer ‘offline’ planners who are preferably in the same city as i am. But if we ever move to your side of the country, i would def get in touch with you. Thanks for all the guidance. 🙂

        1. yes, if you want to LOCK IN your interest , then endowment plan is a secured choice 🙂


  66. amit kumar jain says:

    Than apart from ppf which is better than lic endownment plan under debt category for long term investment.

    1. Even FD is better than endowment plan

  67. amit kumar jain says:

    mutual funds can give better return than ppf i suppose if we could invest for 30 yrs?
    than why not u suggest for it?

    1. We suggest all the things .. I mentioned PPF in this , because Endowment and PPF both come from the same class – “Debt Category”

  68. Deepak Jain says:

    I have taken LIC -LIMITED PAYMENT ENDOWMENT : TABLE-48 in 2007 with quarterly premium 7631/- , In LIC portal it shows 1.32 Lacks as vested bonus till date.. it means as against premium of 2.14 Lacks in 7 years LIC given 1.32 Lacks bonus , can any one pls. guide me is it good decision to continue this policy LIMITED PAYMENT ENDOWMENT : TABLE-48

    1. Bonus is just an added thing . If you surrender the policy now , you will get more than bonus . Better check with LIC on the final amount you will get

  69. SUNNY says:

    I have taken LIC jeevan saral Policy in 2013. I hv paid 2 Premiums till now of Rs.30,025 per year total 60,050. Insurance policy of Amt. Rs. 6,25,000 tenure 25 yrs. I just want to confirm what will be the approx. Maturity amount. In case of Accidental death i will get Amt. Rs.12,50,000/- AND confirm me from where i can open PPF account. Is it possible to open it in Bank ? kindly reply .

    1. Sunny

      YOur maturity amount will depend on your policy document, please have a look at it . Regarding PPF , you can open it in Post office also

  70. sdk says:

    Hi sir,

    I have taken LIC moneyback of 20 years with Rs. 4826 Quarterly in december 2013.

    Actually i was not at all interested in Insurance policy but my father forced and having good reations with that agent i had to buy. I dont want to invest almost 20k per year in this policy..is there oprion to reduce the amount as well as benefits??

    I am 22 year old and Started career 6 Months back and can save 5k/month..plz suggest some investment…

    Thanks in advance waiting for valuable reply..


    1. This is exactly what breaks the long term planning for most of the young people. You choose to give in to your father request and you will mostly waste a lot of money in long run. I dont see any other way coming out of this, other than just breaking it apart.

      You can put a request in LIC for surrender of policy . Do not pay any further premium .


  71. sanjay says:

    Hi Manish

    First of all thanks a lot for all your suggestions. It’s very nice to understand the things about insurance.
    I have invested in ppf and donot having any big life cover. I am 30 , married and annual income of 9 lacs. Can you suggest me where should I invest, so that get some good returns in future.

    1. You first need to define your goals in life . what all you are looking forward to achieve in next 5 yrs ? Then see how much you need and then you can make a good plan . First step is to define your goals !

  72. Jamaal khan says:

    Hello Sir,

    i had taken an endowment policy no. 14 & already paid 2 installments of Re. 27218 each. my next premium is due in January next month. i liked Term+PPF very much. so plz suggest what should i do to surrender my policy to get maximum surrender value from my previous premium amount. i can not leave my hard earned paid premium.
    plz advice so that i can surrender my policy & get back my maximum amount.

    Jamaal khan

    1. This is the worst situation. You will loose the maximum money right now if you surrender, but thats the only option you have. If you continue , you will even loose more ..

      1. Jamaal khan says:

        can u tell me how much money i will loose if i surrender right now or surrender after paying 3rd premium in next year.
        plz suggest better option in both situation coz i want to fetch maximum money out of this

        1. Problem is if you pay 3rd premium and then surrender , you will just get close to your 3rd premium only . so surrendering now or after year is kind of same!

  73. BISWAS says:

    endowment plus(ulip) policy is good or bad?

    1. We do not like ULIP .

  74. BISWAS says:

    Dear sir,

    I have taken an endowment +(ulip) policy for rs. 130000/- can someone tell me the future of this policy. agent says that amount could be double in 5 years.
    please someone reply how much can i get after 5 years.

    1. yes, It “could” Double . Which means “It Might not” double also !

  75. Sachin says:

    Hi Manish,

    Your articles educates me a lot. Till date i have made no investments. I am 32 yrs, married, & has a child of 2 yrs. Looking forward to invest in such a way that i can get insurance cover as well as lump sum amount after approx 16-18 yrs for higher studies of my child. i can make a investment of 50k per annum.

    Kindly suggest .

    1. 50k per annum would be a good enuogh number . You would be able to accumualate close to 15-20 lacs in 10-15 yrs !

      1. Sachin says:

        Dear Manish,

        Thanks for revert. Could you pls suggest me how can i segregate my 50k investment to get 15- 20 lacs in 10-15 yrs.

        1. You mean you just want to invest Rs 50,000 onetime or each year ?

  76. Saravanan says:

    Hi Manish

    I have a LIC endowment plans from 2006 with SI 2000000/- and yearly premium is 86000/-.Pls suggest what is best suitable option for me (continue or paid up or surrender).


    1. I would have made it PAID UP . BUt it will depend on you what you want to do with it

  77. rajendra says:

    Hi Manish,

    I have LIC endowment plans (Table No-14) from 2006 with SI 500000/- and yearly premium is 23095/-.Pls suggest what is best suitable option for me (continue or paid up or surrender).


  78. marck11 says:

    Hi Manish,

    My agent is saying that in case of Max Life Partner plus Endowment plan (for all Max Life endowment plans), the bonus is compounded each year unlike in case of LIC and so the returns will be in the range of 7.5-8 %. He also mentions that we can withdraw before 60 years if needed. Please let me know your opinion.

  79. Chetan Ambi says:


    I just finished reading the entire article with all the comments till here. U have answered all the questions patiently !! Kudos to you man !!

    I have only one LIC policy (New Jeevan Bheema for 2 lacks sum assured) for which I have made 3 yearly payment of nearly 6500 which is still running. This month I will be paying 4th payment. Because after 4th payment I ll get around 20k in return and after that I ll stop the policy. That works our best for me. So I think we have to evaluate what is best suitable option for us (continue or paid up or surrender) and then we can take actions on our own. We can also use IRR/XIRR if required. Correct me if I am wrong.

    1. True . IN this case , it makes sense to pay 4th installment and take 20k and then stop 🙂

  80. komal says:

    Hi Manish,

    I have taken an endowment plan for term of 15 years and have paid 3 premiums. Was not aware of term insurnce till few months back. Now I realise that it better to buy term plan and inverst the remaing in other options.

    Policy details :

    Premium 30k per year
    Sum assured : 4.8 lac

    Surrender value 65k approx taxable. Currently bonus allocated for 3 years is 7% per annum

    1. Shuld i surrender or convert the policy in paid up option (what will be pros and cons of same).

    If i surrender and plan to invest the same amount in ppf and mutual funds for example. Can you please suggest
    2. the funds/sip i can go for and
    3. proportion in which this should be done.

    4. Should mutual funds selected be tax free(elss) or other once

    Please help me to take right descision

    1. Given a very long term view, I would have made the policy as PAID UP . And invest the money in FD/Mutual Funds and take a term plan

  81. Pawan says:

    Hi Manish,
    Appreciate your effort to educate people, this article is really an eye opener.
    I need your advice on my portfolio. I have following life insurance policies, I need your advice on whether I should continue with these policies or switch to some other options. I am now planning to revise my portfolio to include one pure term insurance plan+Medical Insurance+ other investment options (like MF-SIP’s, PPF, Fixed deposits, Tax free bonds). I have started some MF SIP’s & PPF now but need your advise on the insurance policies i have, appreciate your response.
    1. Birla Sunlife Insurance : Dream Plan-Life Coverage-Opt 300% -Term 25; Sum assured-Rs.38275; Policy Term=25 Years; Premium (Yearly)= Rs.7,117.50
    2. LIC: LIC Bima Gold; Sum assured= 2lacs; policy Term= 20 Years; Premium Amount (Yearly)= Rs. 6,559.00
    3.LIC: LIC Jeevan Anand (T.No.9); Sum Assured= 3lacs; policy Term=72 Years; Premium Amount (Yearly)= Rs. 15,530.00
    4.LIC: LIC Jeevan Saral (T.No.165); Sum Assured= 4lacs; policy Term= 25 Years; Premium Amount (Yearly)= Rs. 19,216.00
    5. Aviva: Aviva I-life (E-term Plan); Sum Assured= 1 Crore; policy term= 35 Years Premium (Yearly)= Rs. 8,008.00

    Thanks in advance.

    1. Apart from the term plan, I think you can rethink on other plans you have a completely change your strategy

  82. Pawan Shah says:

    I have taken Table No. 14 this august with a premium of Rs 18072 for 6 years. Return i’ll be getting will be Rs 147000.

    Do you thinkits good investment plan for short term or i just this now and surrender. Ans if i surrender what amt i’ll be getting as i have paid only 1 premium.

    How much will i loose from 18072

    1. What is the % return you are getting per year ? Can you find it out from your agent ?

  83. Sadiq says:

    Dear Manish,
    Policy: LIC endowment assurance policy (2 No’s)
    Single policy details:
    Premium: 17,049 half-yearly
    Tenure: 15 years
    Sum Assured: 5,00,000
    So total of 68,196 premium per year. What will be my maturity value (Tentative)?
    How much return % can i expect?

    Kindly clarify!

    1. You can expect close to 4-7% . The exact amount can be shared by your agent !

  84. rajiv says:


    1. It changes from time to time . they are not FIXED for you

  85. bikram singh says:

    sir thanks for your suggetion
    can you tell me maturity amount of the followings :
    SUM ASSURED- 10,00,000
    SUM ASSURED- 4,00,000

    1. It should be there in your policy document !

  86. bikram singh says:

    i just want to know that the matured amount(sum assured+bonus+other’s if any) is tax free of :
    3) PPF
    please suggest ,THANKS

    1. Yes, maturity amount should be tax free

  87. srilakshmi says:

    As I said, I am looking for good returns. Is PPF a better option?

    1. PPF will give you 8.7% return , is it good enough for you ?

  88. srilakshmi says:

    please provide some good suggestions on above query on investing 50K per annum.

  89. srilakshmi says:

    Hi Manish,

    Good article. I came across this article at the correct time.

    I have Jeevan anand policy, term of 21 yrs and premium amount 25464. I had paid for 3 years. Now I want to make few more investments of about 50K per annum. Please suggest me how to invest the amount. I want to have good returns in the future. However I am having insurance of Jeevan anand for sum assured of 5,00,000. I have a kid also of 2.5 years. Please suggest.


    1. I would suggest go for some SIP’s in equity funds !

  90. Chetan says:

    Excellent article Manish. Read the entire article including 326 comment in one stretch. I really gained hell lot of knowledge on why endowment policies are not good. Instead of asking you help again n again readers can just apply Annuity formula will come to know about returns of these policies and then they take necessary action on their endowment policies.
    Thanks again Manish for this wonderful article!!

    1. Welcome . Spread the knowledge !

  91. sangamesh says:

    can you please suggest me a good term insurance plan available in india.
    age: 25 sum assured minimum 50lacs. term 25 to 35 years

  92. sunil says:

    i am 53 year old for life cover and good return, table no 14 endowment plan with profit in lic is suitable for me.

    1. No , its not a good option for you

  93. Vijay says:

    Hi Manish,

    Stumbled on your posts, this seems to be quite old now, but wanted to know your view on couple of points on Endowment plan which you are avoiding.

    1. You are right, when you say its below par return, but two factors to be considered together with that are (a) Return are safe and (b) Return are tax free [aren’t people investing in this plan are all 30% guys?]

    2. Liquidity – You can take loan against such policy in worst scenario

    3. Goal – Whether policy holder survives or no, the amount would be achieved at the specified date for the nominee. Yes term plan do take care of that but most of the family member are not financially sound to manage investment and insurance.

    I would not completely eliminate endowment plan from investment option, depending on the background of the person in question.

    Would love to know your view.

    1. Vijay

      1. But then, is it the best option ? What about PPF ? ELSS for 15 yrs ?

      2. Only in 3-5 yrs ! , thats all , what if you need a loan outside that ? And its not that easy to take a loan against it .

      3. Agree to that !


      1. Vijay says:

        Manish, I still prefer disagree to the point 1 in your reply.

        Let’s be honest, when we are discussing about Endowment funds, we are discussing about the people who already are above 10 lac +. PPF/EPF is all taken in for granted (which mainly serves for own retirement corpus). Now what we are trying to acheive is Child’s future event.

        One thing which I desperately tried was to open PPF account for my son. Had that been feasible, I absolutely agree, Endowment plan is junk. But problem is, its nearly impossible to open PPF account for my son. SBI sticks to there gun of having PAN card copy of minor (getting which is another pain).

        So I would continue to disagree on title of this post “Endowment policy must be avoided” though an * to that would do the charm 🙂

        BTW, I got an email from some reader of your site ‘s asking if I am LIC agent. So let me clarify, I am no LIC agent… 😉

        Thanks for all insight you have been sharing.

        1. Ok , thats fine . You might have your own views and mindset , thats very natural . Nothing wrong it that . I am biased towards equity products. did you try for PPF in ICICI bank ?

          1. Vijay says:

            No I have not tried in icici bank.

  94. dr. amit says:

    helllo manish.
    thanks for the illustrated example of 5.4% interest accured ,during such a long ill liquid tenure.

      1. DEEPAK SHARMA says:

        Dear Manish ,
        thanks for all the details given above regarding policy. know i want to go to MF OR PPF account with interest rate of 8% interest.

        Please suggest if i submit Rs.50k per year in ppf @ 8% of interest for 20y, how much i will take after 20yrs . or can i take home loan against this amount . or can i withdraw some amount when i need. & will get some life insurance also.

        1. YOu can partially withdraw only after 6th year of PPF is over

  95. Sankar says:

    Thanks a lot for your meticulous analysis and prudent suggestion.

    Like every year when the time comes to pay the LIC premium I got frustrated thinking that the LIC policies, I choose, are wrong. At the age of 23 I took 3 endowment (table 14) policies (4lac, 4lac, 6lac) for 35 years and one whole life policy(table 5) of 2lac for 35 years. That time I believed the agent without any further survey and thought the policies are enough for my future. But at the age of 30 now I have realised neither the insuranse cover nor the investments is enough for my future. Now obviously I have to take seperate term policy as well investment somewhere like PPF.

    Now what can I do with the current policies – continuation, surrender, paid up. After reading your article I was thinking to paid up. But immediately I realised to do the little more survey before commiting second mistake.

    Below are the returns in three cases for endowment policy

    Tenure : 35 yrs(premiums were paid for 7 years already)
    Yearly premium : 11604 (with accidental and illness rider)
    Sum Assured : 4 Lacs
    Premium paid : 81228/-
    Vested bonus accrued till now : 115200/-


    At the maturity = 400000 + 672000 (48*400*35, last 4 years the bonus is 48 @1000/-) + 920000 (2300*400, last three years the FAB is 2300 @1000/- fr 35 years term)
    Maturity Return = 19,92,000
    Accidental cover up = 8,00,000 (due to rider, if I understood correctly) + Bonus

    Paid UP
    New sum assured = (7/35)*400000 = 80000.
    maturity Return = 80000 + 107520 (48*80*(35-7), vested bonus will be given next 28 years as last 7 years the bonus is guaranteed) + 2300*80 (FAB) + 115200 (guaranteed bonus)
    Maturity amount = 4,86,720
    Accidental cover up = 80000*2 = 1,60,000

    Additional accidental cover up required for 640000. Let’s say Amulya Jeevan for 2500000/- and the part of the premium (640000) will be taken from the amount, that is saved due to paid up. Hence the premium for term corresponding to 640000 for 28 years is 2035/-

    (11604 – 2035) = 9569 in PPF for 28 years, Return = 985280/-

    So total return = 486720 + 985280 = 147200/-
    Accidental cover up = 8,00,000

    Not sure how much amount will I get when I surrent. If it is 30% of (the premium paid – first premium) plus the guarteed bonus then surrender amount = .3*(81228) + 115200 = 139568

    If this is put in PPF, then the return = 1204067/-

    Now if the amount was totally invested to PPF after 800000 insurance cover by term policy, then the return would have been = 1694273/- (2500 for term policy, and 8% interest in PPF)

    Still it seems continuation with the endowment poly is good. Now I am totally confued after these calculation. May be my interpetation was wrong.

    Please suggest what to do with these policies. However I have buy new term policy .


    1. Hi Shankar

      This needs a lot of discussion , better open a thread on our forum – http://www.jagoinvestor.com/forum/

  96. Rakhi says:

    I wan to take LIC’s Table no. 165 Jeevan Saral, I want to invest 4000/ per month. Please tell me, what I will get at the time of maturity after 20 yr. Is good to take this plan or should I choose some other plan?

  97. Pushpalata says:

    I have taken LIC’s Table no. 165 Jeevan Saral Endowment policy for 35 years in Dec 2008. I am paying approx. 37000/ year. Please tell me that, what benefit I will get at the time of maturity. Should I surrender the policy?

    1. Better check your policy document to understand the maturity amount . This is a question to be asked before buying not later !

  98. lav chauhan says:


    you have done a great job. manish i want to purchase icici pro term insurance plan should i go for on line or off line?

    1. Any mode is fine ,just make sure you give all information authentic

      1. lav chauhan says:

        thanks alot

  99. Priyank says:

    Hi Manish,
    Thank you very much for the informative article. Had I read it 2 years back, I would have not invested in LIC endowment policy Table 14. I am paying 67288 annual premium. Now I understand that “keep your insurance and investment seperate”.
    Now I want to buy Term Plan. Online term plan from Aviva for 50 Lacs is available for INR 4473. I am confused between LIC term plan or online term plane of Aviva.


    1. Go for Aviva and make sure you give all the information properly !

  100. DK SINGH says:

    dear manish,
    At the outset i must sincerely thank ppl like u for uploading such valuable info on otherwise misleading insurance policies..However, i got to know this a tad too late..If i can seek ur advice on e one of my policies with ICICI that shows fund value equivalent to 2 times the premium but i have already paid 3 premiums..I was assured by the agent that minimum lock-in period would be 3 yrs but it seems to betray that.
    My policy name : ICICI Pru assure Wealth Plus
    Premium = 30000
    started in Jul 2010
    Current fund value = 60000

    Is this policy worth continuing..
    Please suggest way ahead ??

    thanks and rgds
    DK Singh

  101. Sam says:

    What would be the maturity amount for the Endowment Assurance policy Plan T.14 which is started on Sep 2003 for a 10 years term (both premium and maturity). Quraterly premium is Rs.13269 (total of Rs.5,30,760 for ten years) and sum assured is Rs.5,00,000.

    1. For that you need to look into your policy documents, whats written there

  102. Balaji says:

    Very Nice article Manish, one question for you are “Term life with return of premium” policies better option than the traditional “Term insurance” policies?

      1. Balaji says:

        Thanks Manish…….Planning to go for a combination LIC + HDFC term policies. As of now, thinking of a 60% (HDFC Click 2 Protect ) + 40% (LIC Amulya Jeevan) split, any comments/suggestions on this?

  103. Chikoo says:

    Hello Mr. Manish,

    First of all Congratulations!! Its a great blog. It made many things clear. Well i have a small earning but in taxable bracket. I need to make a small investment to save tax and also for some future security. I know nothing about investment, but after going through certain web pages i came to know about MF, Term + PPF, Term + MF. I have also studied about endowment plan (48) of LIC. I am very much confused of what exactly i need to do. Can you guide me please? You can also suggest me some product which i can consider without any further thinking. Because more i think more I’ll get confused.

    Regards & thanks,
    Ms. Chikoo Rawani
    Age : 30yrs.

    1. If you dont wnt to put thinking and dont want to learn , I am not sure if this is the right platform , You will have to read and leanr and take actions only after that !

  104. Suresh says:

    Hi Manish,
    What is your view on ICICI smartkid policy ? I have taken it 4 years ago and paying the premiums annually. is worth continuing ?

    1. Its a ULIP , whats the return you have got till now

  105. Santosh says:

    Hi Manish, Thanks for great blog.

    I have taken 5 Lac END policy in 2003 with LIC table 48 plan. Maturity is 25 years and term to pay for 15 years. its almost 9 years i am paying 25k per year.

    Kindly suggest me, should i go for termination of policy and invest the amount in other policies. also can you please let me know if i surrender now how much amount can i expect from LIC.

    Thanks in advance.

    Santosh Kumar

    1. If I were you , I would have just make this policy paid up !

  106. d.chakraborty says:

    This article served to me as a true eye-opener.I didn’t believe my endowment policy was this bad.
    I have already paid my two premiums for the endowment policy worth Rs 62000/- (30961 * 2).I have just started working and this money was what i saved for the last year.Last night after reading this article,i couldn’t sleep by thinking of losing this money by surrendering the plan.
    But, i guess i don’t have any other choice.Shall i go ahead with the surrender, or is there a option of switching to term plan of say Rs10000/ or atleast minimise the loss by some other way?
    The rest of my yearly premiums (30961 – 10000) i am looking to invest in ELSS (just thinking about this).
    Also cud u tell about two good long term ELSS SIP plans of 1000/- p.m. in each ?

    Waiting for your reply.

    1. The endowkment plans will not return you anything now , as you must be knowing that before 3 yrs they do not acquire any surrender value .

      ELSS option are HDFC TaxSaver , Canara Robeco Tax saver .

  107. Ravindra says:

    Hi Manish. Appreciate your informative & patient responses to so many queries. Here’s one from me. 🙂

    Your blog reassures my commitment towards term plans.

    I want to invest in LIC Anmol Jeevan. (Single premium for SA: Rs. 10lacs – Period: 25 years). I do understand that the SA is no-where close to the thumb rule for the cover required…. but the intent here is only to cover the sudden shock for atleast a couple of years, in case i am not around.
    The other point why I am inclined towards LIC is purely looking at the claim settlement ratio. Whereas I know that the Aegon Religaire could get me this cover for a much better deal.

    Would like your views on my plans.


    1. At the end you have to be comfortable and have a good sleep each day , so I suggest you go with LIC .

      1. Ravindra says:

        Thanks Manish.

  108. Vicky says:

    Thanks for the above information.


  109. Vicky Tulshan says:

    Hi Manish

    I really found this info to be useful & interesting , Can you please suggest any particular plan and company for Term Insurance.

    If possible give 2 to 3 plans or company.

    Thanks & Regards,

    1. Aviva , HDFC , Kotak

  110. Prasanjit says:

    Is ELSS better than infra funds? I have heard that return on infra funds are better than ELSS, just that infra funds dont have tax benefits.. is it true?

    1. You cant judge like that . ELSS is a equity fund , Infra is a secure fund, so the volatility in return is the main differentiator .

  111. Prasanjit says:

    Is the amount invested in any ELSS plan completely exempt from tax? What about the interest earned – is that too tax free?

    1. Pransanjit

      What you earn from ELSS is not INTEREST , its the capital appreciation and is exempt from tax after 1 yrs , but the amount invested is exempt only upto 1 lac under 80C

      1. Prasanjit says:

        Thanks for your reply Manish. Could you kindly help me regarding which bank’s term plan should i opt for? I hear Kotak and HDFC are offering better deals.

        1. Both are equally ok .

  112. Anupam says:

    I had enrolled in this Jeevan Saral policy this year in January 2012. I am somehow now not interested in this policy and just want to get rid of it.

    Request advice on what could be my options::
    1) Surrender? how much would be the returned amount (if any ?)
    2) Just not pay any more premiums.. what would be my loss ? Any affect on CIBIL credit ratings?
    3) or continue (dealing with govt type departments are such a pain). For everything and anything i am told to go the branch office.

    Appreciate any suggestions.

    1. Anupam

      1. NOthing .. surrender before 3 yrs payment means you get ZERO

      2. No , it will not affect CIBIL

      3. I dont suggest continue, just take the loss

  113. Anonymous says:

    I want to apply for Term insurance what are options what about LIC Amulya Jeevan?

    1. Yea its a poilicy from LIC !

  114. Chandra says:


    Today one of the LIC agent approached me for LIC Jeevan Anand Endowment product.
    Sum assured: 1L
    years: 20
    premium: 5K

    on maturity you ll let 1.20L bonus + 1L(Premium paid).

    please suggest is this good policy?


  115. Manjit Singh says:

    Hi, I had taken HDFC Clasic Assurance plan last month. I want to know whether it is right choice or not??

    1. Its a low return plan , if you wanted that, then its a right choice !

  116. Bharath says:


    The premiums on following policies are paid upto date. Is it advisable to surrender these policies now? is there any other options other than surrendering? Please let me know. Thanks in advance.

    Commencement date Prem Amount Sum Assured Year
    2000 2445 100000 20 endowment
    2001 1210 75000 20 money back
    2002 2777 100000 25 jeevan sanchay
    2006 8504 500000 20 bima gold
    2006 2696 100000 21 jeevan anand


    1. If its just starting of policies, better surrender , if you are in second half , then make them paid up !

  117. santosh says:

    Actually I have 2 Endowment assurance LIC policy , and already paid 4 years premium , so now I like to switch in term plan of LIC , so its possible? if yes then how to?

    1. Santosh

      Its not possible like that .. you need to close your endowment plans and take a new term plan !

      1. santosh says:

        Can i use this below option ?.i not understand clearly below clause,so can you simplify?

        “Premium Stoppage:
        If payment of premiums ceases after at least THREE years’ premiums have been paid , a free paid-up policy for a reduced sum assured will be automatically secured provided the reduced sum assured, exclusive of any attached bonus, is not less than Rs. 250/-. The reduced sum assured will become payable on the event as stipulated in the policy.”

        1. Which plan is this ?

          1. santosh says:

            Endowment assurance LIC policy

            1. Thats just a PAID Up option !

  118. Shailendra says:

    Hi Manish
    Recently my agent has given me endowment policy table no. 14 towards my requirement as I need Rs. 11 lakes in next 15 years. my policy premium is Rs. 30098.

    Please advice me I should continue with this policy or not. if not what is your advice. My age is now 45 years.



    1. I dont think you will be able to get that much return from that policy , Is the promise made with you for how mcuh money you will get ?

      1. Shailendra says:

        Hi Manish,
        Thanks for your swift reply.
        My agent has promissed me you will be get around 11 laks on maturity.

        1. Where is the promise written ? What if he promise 34 lacs ? Will you still just listen to him and just assume he is saying true , where is the legal document ?

  119. Swetank Saroj says:

    Hi Manish,

    It is a great article.

    And an eye-opener not only in the term of endowment policy but also to understand that the so called GOD is not actually a GOD rather a very cunning businessman.

    Somehow I never fall for an endowment policy (but cant save my self from ULIPS).

    Have gone through 1/3 of comments and found that every one has been cheated by the GOD. As IRDA have forced to withdraw MaxNewYork their initial policies its time, for the same for our GOD.

    Also there should be a compulsory list of question first answered by the investors and then they need to invest, the same general question you or many others suggest to ask. The moment IRDA start doing this their will not be a problem like this, but it really difficult to implement.

    Coz someones loss is someones gain.


    1. The issue is that GOD is under govt itself and bails out govt at times, so they wont anything on this 🙂

  120. Sonal Revankar says:

    Hi Manish,
    I m very much impressed with the advices u hav given abt systematic financial planning. Im a lecturer for MBA in finance subjects & unfortunaltely an LIC agent also. To start with i hav decided to take a policy for my own self but confused which one to opt for. Whether it should be Jeevan anand of plain term policy. I wan to pay low premiums as my income is not too good to start investing still. (180,000 pa) i feel tat jeevan anand with a cover of 2,00000(just for start ) will b fine for me as i will get sum assured after 25 yrs & the life cover continues till death. the free life cover would be an added advantage for me , may be for next 20 yrs( if i survive till 70 yrs). so dont u think its a good option. right now im not thinking of saving… its just an attempt to cover a small sum( may be not enough for future i know ) but later my earnings will be better. wat u feel abt this??

    1. Sonal

      Is 2 lacs good enough cover for you ? Is 5% return good for you ? If yes , then take LIC policy !

  121. Sunil Mondal says:

    Dear Manish,
    I have already invested 70K in PPF A/C.
    i want to invest more 50K, could you suggest me where should i diposit this money with tax benefit under 80C?

    1. You can now invest upto 1 lac in PPF

      1. Sunil Mondal says:

        rest of 20k where should i invest? which interest is completely tax free like PPF

        1. Life insurance products would be , or invest in non-tax mutual fund which are pure equity funds , anyways after 1 yr they are tax free

  122. Mugunth says:

    I have taken a few policies from my landlord (LIC agent). I am not sure, whether these will be yeilding any advantage after the term period. Please confirm whether I can change the policy to any other better plan. If yes, kindly suggest the plan too. Currently i am paying on Quarterly basis. All are effective May 2006

    Policy Name No SA Prm Amnt Pre Term Policy Term
    Jeevan Kishore T 102 100000 1,277.00 19 19
    Endw. Ass. Policy T 14 600000 7,642.00 20 20
    Endw. Ass. Policy T 14 150000 2,286.00 17 17
    Jeev Kishore T 102 200000 2,781.00 18 18
    New Jana RakPlan T 91 30000 510.00 16 16
    Endw. Ass. Policy T 14 50000 659.00 20 20

    1. They are just crap , truely speaking just stop them

    2. Swetank Saroj says:

      Hi Mugunth,

      Taking Manish’s advice, I hope you must have surrendered your policy by now.

      Anyways after reading your case I got tempted enough to write.

      Are you paying any rent to your landlord? If yes, then you have the right to sue him..because he is earning twice for the same house. One by direct rent and another from the policy premiums.

      Now I understand, how come these LIC agent have become house owners.

      The moment I read your case first thing which came to my mind is to kill your landlord.

      Hope you learn from your mistake and now understand the value of good investment.. at least you need to know what you are getting into.

      I myself have done mistakes by investing in 4 ULIPS..but at least I was knowing what I was getting into. I believe that in 12-15 years time I will definitely make good money from them (using the switch options and max equity exposure).


  123. Gomathy says:

    Hi Manish,

    I took Lic ‘s money back policy in the year 2008 , i pay around 17.5K a year.Now i feel that this policy is not useful, this policy is for 20 years , i get 50k every 4 years once , for 4 times and atlast the maturity amount is 5k .I feel this is waste now.Can i surrender this policy and get a new one ? If so please suggest me a good policy.I’m 29 years old. i can pay around 20k for a year .

    1. Gomathy

      Did you recently got that 50k once ? If you have got , then just surrender the policy and go through the mutual funds route now . Dont go for “policies”

  124. pari says:

    Hi Manish.. I am 26 yr old working in gov. company. I recently started investing in PPF assuming I would put aside 60k per year for the next fifteen years. I do not plan to leave my job or change it. I need to take whole life policy purely for protection purpose. LIC is the best company according to claim settlement ration. However most of the policies are for a limited period. Whole life with limited payment is a great option but according to premium calculator I would pay around 16lac for a 20 lac sum assured (in case of death) for premium paying term of 30 years. Is that a good policy? I am little apprehensice about it but canot find any other polict that fits the bill of “Whole Life” perfectly.

    In the end I would like to sat that I read this blog like a hungry person seeking food…your viewpoints give an in depth knowledge into the topic. thanks for enlighting us with your expert comments. 🙂

    1. Jeevan Tarang is one policy which covers you till 99 yrs age .. But the returns would be extremlly low .

      You would like to take a normal term plan from company which are giving it for a big tenure . You anyways dont need it once you stop earning

      1. pari says:

        Dear Manish

        Thanks a lot for your reply. I found one plan that suits my requirement.
        Plan-Kotak Eternal Life Plan
        covers till 99 years, sum assured -30 lac, premium paying term -30 years, premium paid-around 16 lac
        Now thats the same amount I pay for sum assured of 20 lac in LIC whole life life policy.
        I like Kotak Plan . Would you suggest this plan to be a good one? As far as I know claim settlement ratio of the company is quite good.

        1. Whats the problem with a term plan + SIP in balanced funds

          1. pari says:

            Term plan covers me till 60/70 years of age only! I am not much comfortable with SIP. 🙁

            1. What exactly is your requirement ?

              1. In Insurance ?
              2. In investment ?

            2. pari says:

              My financial position is this-My salary is 29k gross. I am living in a house on rent (rent is paid by the company so I do not get HRA). I get hill station allowance .Pf is deducted, mediclaim is deducted (its a company mediclaim policy, presently I have taken for 3k sum assured which I will increase to 5k which is the maximum sum assured). I am also member of cooperative society of my company and a group insurance scheme of my company as well.My net income comes to 24.5k.

              Presently I have a money back LIC policy for which I pay premium of 10k in a year (It is not a good policy still much time has passed so I would let it run).

              I have recently deposited 10k in my newly opened PPF account and I plan to deposit as much as possible in that.

              For insurance I need a pure protection plan preferably for whole life.

              For investment I need good returns prefrably tax free as in now.

              I am not married till now and my mother is also working. Even if I invest 1lac under 80C still around 6000 rupees will be deducted as tax in a year. In future I plan to invest in FDs as well (good option even if they are not tax saving). I had invested money in ULIP (SBI) around 5 years back but they have been giving real low return as on date therefore I am apprehensive about them.

              Pheww!! that was a lot to tell 🙂

              Please give your valuable suggestions on the same.

            3. Pary please ask open ended questions point wise or use our forum : http://jagoinvestor.dev.diginnovators.site/forum

            4. Swetank Saroj says:

              Hi Pari,

              Its a lot of personal financial detail.

              Anyways, after going through your questions, I came to following conclusions:
              1. You are confused. You want to try or say have tried different financial product and not very happy with the result.
              2. You want best or say MF return with less risk..not possible.
              3. You want to get you financial planning done, that too free of cost…:P… from one of the best planner…:).
              If you want it free, its difficult…you have to work a lot and as suggested better use the forum..

              Always keep in mind nothing comes for free.


  125. Manish Varshney says:

    Manish ji… Thanks for the reply..
    Can u plz suggest the best possible scenario for the PPF investment?
    I m also ready to keep the maturity amount in the PPF a/c during 5 years of extension period..


    1. Just invest maximum at the start of a financial year before 5th

  126. Manish Varshney says:

    Hello Manish ji,

    As in the case of PPF investment one should also aware of that “Interest is calculated on lowest balance between the 5th and last day of the month.” So for the better interest qualification we should invest on the 1st four days of the month…
    Please correct me if i m not wrong…


    1. Yes , that is correct

  127. kalpeshk says:

    thanks manishbhai, you have helped me without any conversation.

  128. Uday says:

    Hi Manish,

    I have 5 policies from LIC 🙁

    Sum term (yrs) Policy name DOC premium
    200000 20 Jeevan Nidhi (T No 169) 2001 10349
    50000 15 Endowment (T No 14) 2001 3472
    100000 20 Endowment (T No 14) 2003 4866
    50000 20 Money Back – 20 yrs (T No 75) 2004 3275
    100000 20 Money Back – 20 yrs (T No 75) 2007 6450

    should i surrender all of them or should i continue….should i invest in ppf if i surrender these LIC….what will be the loss if i surrender these LIC….

    1. Uday

      Yes we generally recommened surrendering , but ultimately you need to do some homework on both situation when you surrender and not surrender what happens !

  129. Sunder says:

    Our Endowment policy under Table-14 for Rs.1Lakh & Premium was Rs 3600 x 4 pay = 14,000 P.A, Payment for 8 years after paying for 8 Y finally at the time of Maturity LIC is paying us RS 1, 27,000 Only But We have Made payment of Rs 1,12,000 + Rs 6,000 as Late Pay an Ect Rs 1,12,000 + 6,000 + 700 fr submit = Total of Rs 1,18,000 Our LIC Returns at Maturity is Rs 1,27,000 – T,Pay Rs 1,18,000 = Rs 8,300 Bal in Hand after 8 .3 Years. I really ask any one is Rs 8,300 is really worth for 8years fu Questions

    1. Why Lic is Not Giving Clear cut Information in The Policy Document

    2. Thar is No proof for what LIC Agents Says at time of insuring nothing is given in written form

    3. Be Aware Of LIC & ITS AGENTS……

  130. Mayur Jain says:

    Hello Manish,
    I have HDFC Endowment Assurance Policy. I have paid 3 years premium i.e Rs.25,000. After reading your article i have realised its not worth putting more money in it. When i called my agent he said pay 2 more years premium and you will receive money what you have invested i.e Rs.25,000 X 5 = 1,25,000. Is it true i will get my money back 1,25,000 as it is nowhere mentioned in the policy???
    As it is traditional plan he refused to tell me its Fund Value.
    What do i do pay 2 years of premium or discontinue the policy???

  131. prasanna says:

    hi Manish,

    I agree with your calculationa and analysis of of an insurance plan and the advantages of term life insurance. I also agree with your outlook of PPF scheme. What is fail is to understand is the advantages of mutual funds or SIP. Having invested in mutual funds for a period of 5 years, i have burnt my finger and lost 25% of the principal amount that I invested. Mutual funds always have market risk and returns are not guranteed. Is there any mutual fund which can write on paper with guaranteed returns of 12% per annum(cumulative) and protect our principal from any losses. The so called returns of these funds are based on historic assessment and doesn’t guarantee our future returns. The relaince of of the funds choice for long term also has to be thought of as any single fund does not perform consistently for a longer period. If we want to diversify our risk and choice multiple funds then the returns are impacts(probably 8%). Do we have a better choice where returns are assured (12%)

    1. Prassanna

      If you had invested in 2002 , you must be sitting on a huge returns like 40-50% CAGR return , would you complain that time that the returns from mutual funds are 12-15% and not 40% CAGR ? In the same way its all about timing , the last 5 yrs returns are very rare occcasiions .. It does not happen generally , we are all unlucky , nothing else ..

      Wait for few more years and overall you will see better returns . What you are facing are obvious risks of equity investing .

      1. Amit says:

        with complete agreement with MF+Term insurace strategy (i already hv proper financial plan in place)………

        but just a cynical thought…. due to the fact that now India have trillion Rupee MF industry … but at the end of the day this money goes into Equity market – secondary market (where someone loss is someones gain and viceversa)… please note i m only talking about PURE EQUITY MF…..
        so defintely where is the assurity, even if somebody hv moderate risk appetite, i would comletely give.. same RISK rating as that of stocks market for Equity MF…(there are very few MF who hv outperformed Index in past yrs)…

        for people with age 25-35…its always advisable (from financial experts) to invest till 70-80% in equity to get advantage of compounding. who can assure u that…one may not face same kind of “Unlucky” situation during redemption…..

        possibly this looks bit skeptical.. but with due respect to Fund mangers of AMC’s, averaging of investment due to SIP, power of compouding….etc …I would still prefer equity investment not more than 40-50% in my portfolio.
        … Amit

        1. Amit

          Actually I am not 100% clear on what you want to say , but regarding the liquidating your money from equity , even that has to be done in SWP way , not waiting till end date , that unlucky thing can definately happen

  132. Dhamo says:

    Hi all,

    I planned to invest in Kotak Money Back Plan as a Monthly Premium 1.8k for 20 Years. They have assured minimum maturity amount is around 6 lakhs apart from they offer Medical Surgery Claim upto 1.5 lakhs/year and 60,000k on 5th, 10th an 15th year. Shall i opt this plan or anyother better plan avail in market.

    Pls suggest to help me to get rid of this confusion?

  133. Girish says:

    Dear Manish,
    Adding to the above comment,
    Could you please suggest me a policy where I can get maximum returns at maturity.
    I have a daughter now who is new born, am also planning to take a policy for her which policy do you recommend.
    Waiting for your reply.

  134. Girish says:

    Hi Manish,
    Looking at the blog, I think you are one of the master in this and are really doing a great work by giving advice on Insurance. So need your advice please.
    I already have LIC Jeevan Anand and am paying an yearly premium of 24k, which is for 15 yrs and have already payed 5 yrs as of now.
    I am planning to buy a new Insurance policy for around 36k.
    I am in touch with LIC agent and he suggested me to take endowment policy. Looking at your blog I have decided I will not go for it. Please suggest me some very good policy in LIC or SBI where I can invest.
    Waiting to hear from you.

    1. Girisho

      If you want to invest money only from invstments point of view , then please never go for traditional plans . Go for MF


  135. Kishore says:

    Please give some advantages and disadvantages of LIC new bima gold policy as I am thinking to invest here.

    1. Kishore

      It would give you returns of not more than 6% on long term basis and not even cover you properly . what is your requirement ?

  136. KRIPA S SAHU says:

    the break down of my policy is as follows ……..
    SUM ASSURED 450000
    POLICY TERM 30yrs
    SURVIVAL BENEFIT -16000 ——–(25000-9000)

    1. KRIPA S SAHU says:

      DEAR MANISH ..
      What are the various hidden charges in the ulip policies like mortality charge ????
      exactly what amount of our premium is allocated to the funds ???
      are these refundable or one time charges ???
      which company charges are minimum in the insurance market?????

      1. Kripa

        First permium allocation charge is deducted, then mortality charges are cut , then otehr charges are cut and then whatever is left is allocated to fund


  137. KRIPA S SAHU says:

    dear manish,
    thank you for your valuable suggestion,, as u suggested i have started two sips ,, but pls suggest me a good investment plan for a term of 15-20 years…shall i go for fd or bonds or any other product????

    1. Kripa

      Your MF investments are them selves a investments plan , dont look at a specific bundled policy .


      1. KRIPA S SAHU says:

        shall i buy gold or a gold fund…and what is gold etf and gold fund of fund????

  138. KRIPA S SAHU says:

    i want to invest in bharti axa monthly income plan…features of plan are:

    premium of 25000 pa for seven years only
    9000 i will get return back to my account on the third month of every premium paying month i.e i am paying rs 16000 only per year.

    from 8th year onwards tilltil 22ndth year i will get guaranteed 2500 pm .
    after 22ndth year i will get my 175000 invested back .
    or if i keep it for 8 more years i will get 595000 back at the end of 30th year.

    is it a good plan pls help me out ?
    shall i go for it or shall i invest in other plan….

    1. Kripa

      You should use IRR method to find out the potential return of this plan : use this and let us know what was the IRR : http://jagoinvestor.dev.diginnovators.site/2011/02/calculate-insurance-policies-returns-video.html

      1. KRIPA S SAHU says:

        the irr as per your video is coming 16% am i correct pls confirm???

        1. Kripa

          Is it , that looks wrong to me ,Can you list down, year and the outflow money here ? Please copy paste it here


          1. KRIPA S SAHU says:

            SUM ASSURED 450000
            PREMIUM AMOUNT 25000
            PREMIUM PAYIN TERM 7years
            POLICY TERM 30yrs
            SURVIVAL BENEFIT -16000 ——–(25000-9000)—-2011
            -16000 ————————–2013
            -16000 ————————2017
            30000 ——————-2025
            IRR ——– 16%

            in the first 07 years i have to pay 25000 but i will get cash of rs 9000/- back every third month after the premium paying month.so it makes 16000/-

            1. Kripa

              I looked at the plan : http://www.bharti-axalife.com/pdf/Monthly_Income_Plan_Brochure.pdf

              There is some huge misunderstanding on your side , it seems .

              Who told you all these numbers which you have put in comments ? I think they are wrong , please look at your policy and reconfirm the things .. Because as per my understanding you will have to pay the premijm for first 7 yrs, then you start getting monthly income till maturity and at teh end you just get the bonus and nothing else


            2. KRIPA S SAHU says:


            3. Kripa

              Just ignore that ..


            4. KRIPA S SAHU says:

              how can i check the truth behind it should i go for it ??

  139. KRIPA S SAHU says:


    1. KRIPA S SAHU says:

      please sugeest me a good insurance plan with good return for a premium of 25-30000 pa…..

      1. Kripa

        What is your requirement ?

    2. Kripa

      You can go for a term plan for insurance form Aviva or Kotak and for investments go with SIP in Mujtual funds


  140. Jagannath says:

    Hi Manish,
    Kindly request you to advise me on below concern.
    I’m planning to open a PPF account primarily as part of retirement planning. But with DTC in the horizon, I’m not able to decide whether it is still a good option to go for PPF? (mainly i do not know how it impacts…) Because if I start now and DTC is enacted then, except few all my contributions will come under DTC tax bracket. Currently my 80c quota stands exhausted (total Rs 1.3L against max 1.0L). What would be your suggestion here, to go for PPF? but i’m not looking any investments subject to markect conditins…
    Kindly advise.
    Thanks and Regards

    1. Jaganathh

      If your 80C is exhauseted , then dont go for PPF , just keep investing in Debt funds or equity funds for long term .. Why to lock in for long when you dont need to .


      1. Jagannath says:

        HI Manish,

        Thanks for your kind advise.
        As communicated earlier, i have submitted my LIC Saral policy for cancellation (during free look period), and awaiting for my premium amount refund…. meanwhile i’m in search of good Term Insurance policies… the one i found with least premium is “Aviva -i Life” term insuranc.. and i need your suggestion on this whether this term insurance is advisable to have one and its merits/demerits…
        Looking forward to your kind assistence….

        Thanks abd Regards

        1. Jagannath says:

          one more query to add is …
          the premium amount for 1Crore Sum Assured for Aviva i-Life term insurance is Rs. 9,588/- for 35 years term and i’m 33 year old now…
          My concerns are ..
          1. why the premium is too low where as LIC’s premium is about Rs. 47,300/- for the same policy (Amulya Jeevan)
          2. Is this premium genuine? Is there any harmful disadvantages in this policy/company?
          3. Need your suggestation whether to go for this policy from Aviva i-life term policy?
          Desperately need your advise on this…
          Kindly reply…

          1. Jagannath

            there are several reasons for high premium of LIC, but I would like to assure you that there is nothing wrong in going with AVIVA .. go for it ..


  141. Jagannath says:

    Hello Manish, Thanks for the information. I would like to speak to you…. Request you to share your contact number at jagannath.honnakatti@gmail.com

  142. Jagannath says:

    Hi Manish,

    Just a month back i have taken a Jeevan Saral policy with annual premium of 1,20,000/-
    But looking at your illustration of Term Insurance + PPF, i have really got disappointed for the mistake…

    Kindly request you to advise whether i can cancel the Jeevan saral and go for Term+PPF?
    Kindly advise… your swift reply would be much appreciated.

    Thanks and Regards

    1. Jagannath

      You can give back your policy only with 15 days of recieveing it which is called “freelook up period” , I am afraid that you might have crosses it , if thats the case .. welcome to the world of mis-bought and mis-sold policies 🙂 ..


  143. Varun gupta says:


    I am earning 1.5 lacs/month & my age is 25 yrs. I wanted to seek professional advise from you. so could you please forward me the details about it. such as your email id.


    Varun Gupta

    1. Varun

      Sent a mail to you .


  144. Deepak Bhardwaj says:

    Hello Manish.

    I have just joined job. And I am unaware of how to save or invest money.
    I was searching for some policy (insurace) and investment, and I saw your
    article. It was really amazing.

    Dear, I can invest Rs. 36,000 per year. Can you please tell me how to get maximum benefit for it. I think PPF rate is also down to 8%.

    Can you please guide me.

    1. Deepak

      As you are starter , just start few SIP’s in Balanced mutual funds like HDFC Prudence and DSPBR Balanaced funds ,and learn more about all this in next few months


  145. Gayathri says:

    Came accross this site accidentaly…. and now it has completely changed my perception about investment and insuarance…
    Its surprising that even someone, as me, who would get into details before investing could not see through the fine prints..
    Thanks for this eye opening blog!!

    1. Gayathri

      Good to hear that 🙂 . I would invite you to take part in Action month and take some actions : http://jagoinvestor.dev.diginnovators.site/2011/08/action-month.html

  146. sanju says:

    Hi Manish,

    I am 32 and I wanted to take Amulya Jeevan of 50L. When I checked in the LIC calculator, the premium for this for 28 years term ,came as 200150 p.a. I met the LIC agent and asked him how much it would be for me. He said that as I am visually impaired, the premium would be 17,900. I didn’t get it and asked him how much it would be for a normal person of my age for 50L lic, he told it would be 14K. But this is different from what is shown on the website. In any case, considering his logic, if I have to pay extra for premium, then perhaps I might end up paying 26,000 or so for 50L. Is this correct or is that agent trying to fool me? Why would I end up paying that much? Am I doing the right thing? Please help

    1. Sanju

      50 lacs should not cost more than 14-15k from LIC .. looks like that is correct . for you if you are visually imparied , still it should not increase considerably .. anything below 20k looks ok .


      1. sanju says:

        hi manish,

        Thanks for the reply. I am thinking of reducing the cover if I am not able to get a cover of 50L within 20k.

  147. Pradipta says:

    Hi Manish,

    Curious to know how Gold ETF works? Does the bank have physical gold again the ETFs they sell? What are the chances of the price of these ETFs deviateing from the price of gold?

    Also is there any silver ETF? Or is any bank planning to launch one in the near future?

    Thanks in Advance.

  148. Jayavardhan says:

    Hello Manish,

    Really nice article. I am following your articles but this one i missed earlier. Thanks for that.

    My query is, will HDFC SL Crest (Highest NAV guarantee fund) will come under Endowment policy ? please clarify me.


  149. sanju says:

    Hi Manish,

    The ppf 8% rate can come down in future , the way it had in past from 12% so I was wondering if taking PPF is a good choice?

    On the other hand , agents assure that the 6-7% interrest on Endwments will not come down assuming I take a policy now.

    1. Sanju

      Yes , PPF interest can go up or down ,thats you call if you want to take it or not .

      In endowment , the returns are assured, only the bonus part can go up and down . But still see both and decide which one makes sense


  150. RPK says:

    Hi Manish,

    Great Article and please suggest me how to go with the following :

    I have Jeevan anand policy with prm 25,464/ annum and i have paid for 6 years. what would be the ideal thing to do ..to just surrender and take what ever it comes or to look for paid up ?

    Also please suggest me where to invest as i already started investing in PPF and started 10 K / month in MF by reading your articles and thanks to one my frend who has pointed to me your site.

    thanks well in advance.

    1. RPK says:

      Also please provide me details of amount i will recieve in case of surrender and what would be the consequences of taking a loan ( on policy) and discontinuing the repayment ?

      1. RPK

        You will get around 80k-1 lac in case of surrender . I think you can do that and reinvest that money for long term in equiyt


  151. sanju says:

    Hi Manish,

    Eversince, i came across this page, a few months ago, i keep coming back to check latest posts…Thanks for providing all these details. I met an LIC agent and asked for a term insurance, he tried to sell me some endowment scheme but I refused. At the last he showed some “portfolio” in which he said that he has “reverse engineered” the endowment polices to get maximum returns keeping inflation a point too. He told that I would have to invest in 15 endowment polices in this portfolio and that after 60 years , i would be getting monthly returns uptil the age of 75. Further more there is also life insurance and loan policy. It looks nice to me but I wanted to send it you for your opinion. Please do send me a blank mail so that i can forward the portfolio. Kindly have a look at it and reply.

    if i invested in this portfolio which he managed, he could give

    1. Sanju

      Those reversed enginerred way is nothing but a concept called laddering , which is taught to agents in workshops which costs 20k-30k for them !


      1. sanju says:

        Hi Manish,

        I had a doubt.
        In ppf, currently the interest is 8%, but this can also go down in future. Several years back it was around 12% and then it went on decreasing. So I was thinking if a person invests in PPF + Term +MF is it good? Endowment , according to agents is assured rate of interest , maybe at 6 to 7, sothis may not come down in near future if a person takes a policy now

  152. ankit kumar says:

    hi manish,
    thankyou for the insights you have provided about investment and insurance. i want to know your views about postal life insurance. my age is 24 years and i have recently joined a state owned company. through some research, i found out that PLI is a good option for gov. employees. i did some calculation and found that the return rate in endowment plan of PLI is more then 9%. the bonus rate given in PLI is rs 70 in EA plan, which is much higher then any LIC policy. but as all the knowledge i have of insurance and investment is not older then 4-5 months, would u please help me with this??

  153. smgupta says:


    I have an elementary question regarding ‘Life Insurance” for my knowledge & keeping my insurance benefits intact throughout its tenure/ validity.

    Is life insurance a renewable contract i.e?
    • Once a policy has been issued,
    • It remains enforceable throughout its validity?

    Can an insurer:
    1. Cancel the policy,
    2. Charge a higher premium thereafter,
    3. Modify the terms & conditions,
    4. Restrict or reduce the benefits subsequent to the issue of the policy.

    The policy may have been issued with or without medical, based upon the proposal form or other underwriting considerations.

    The question had assumed importance because of the fact that one of the executive of an insurance co. had advised that claim would be repudiated (policy has already been issued) even if the proposer was a non smoker at the time of ‘Term Insurance’ (the medical has also been carried out because the sum insured was Rs. 1 cr.) & subsequently it is found out that the proposer becomes a smoker. How they would find out? May be the cause of death was smoke induced conditions/ post mortem report etc.

    Is he right & if he is, than is the proposer under obligation to disclose all material facts effecting the mortality, subsequent to the issue of the policy, like diabetes, hyper tension, change in the physical conditions which are resulting from advancement of age or accelerated due to an accident (amputation of leg or arm, deafness, loss of sight) etc.

    There could be numerous other reasons which were not there at the time of insurance like smoking. Is the premium not taking care of all such adverse factors, which may be there or bound to be there?

    If the insured is bound to disclose all these factors subsequent to the issue of the policy, the question assumes importance i.e.


    1. Smgupta

      No , your friend is wrong . Insurance policies are long term contacts . the terms and conditions cant be changed in between , You can cancel the policy by stopping the premiums any time .

      However health insurance is a yearly contract nad things can change in betweemn , like premium and terms .

      Also you dont have to disclose those facts which change after taking the term plan


  154. Amit says:

    Hello Manish,
    Firstly I have to say you are doing Fab,Superb,excellent…. JOB, Your Forum really talks about many facts which we “so called” educated people are not aware of…..
    Anyway My question is I am also been victim of this Endowment Policy… (before i was thinking I am doing great financial planning 🙁
    I have following Policy
    1) jeevan Mitra (2 lac) = Prem 10300 / yearly (From 2005)
    2) jeevan Anand (1 lac) = Prem 5553 / yearly (From 2007)
    3) jeevan Anand (2 lac) = Prem 11400 / yearly (From 2009)
    4) jeevan mitra (2 lac) = Prem 11226 / yearly (From 2009)
    5) jeevan saral (2.5 lac) = Prem 12300 / yearly (from 2011)
    6) Wealth Plus = One Time 50000 (In 2009)
    7) Samruddhi Plus = Prem 20000 / yearly (from 2010)
    8) Kotak Mahindra Flexi II (ULIP) = Prem 16000 / (from 2007)

    Approx. I am paying 70k as a premium, Now if I think about your case study (term plan + ppf + ELSS)…. then this portfolio looks completely stupid
    Could you please guide me, how should i proceed, Shall I surrender this policy or keep some and Paid-up some…..:-(


    1. Amit

      Before doing anything , you should first take care of your cover , take a term plan first and get your self adequately insured. After that think about anything .

      You can surrerder your policies or make it paid up depeneding on if you need money now or later. Take each policy at a time and take a decision .


  155. SK patil says:

    Hi, manish, I checked up with BSIL company regarding stopping of just one year ulip, they were telling that if i stop the premium payment i am not elligible for fund value after 3years.

    pls. suggest

    1. SK pati;

      what is the name of the ULIP exactly ? If you pay 1 yrs premium , generally you can stop paying the premiums and get your money after 3 yrs of lock in , but incase its a new ULIP , i am not sure then


  156. Saurabh Sharma says:

    Hi Manish,

    I hope you got my last message.


  157. Saurabh Sharma says:

    Thanks Manish for your help to all of us. It has been wonderful reading your blog.

    I got married last month and shifted out of my parent’s place. Hence, the expenses have increased drastically. My annual income is 5.5 Lac with approx. 32-35K expenses per month inclusive of rent (15K per month). Consequently, i have limited money for investment approx. 4000 per month

    Currently, i have only invested in one ULIP i.e. 24K p.a. Please find below my investment plan going forward and I look forward for your suggestions:
    1. Discontinue ULIP (I took it in 2007, markets were high then)
    2. Invest the same amount (2000) in two different ELSS MF @ 1K each; looking for high/medium returns
    3. One more Debt MF @ 1000K per month or do you suggest PPF?
    4. Take a term insurance for 20 yrs: Sum assured 30 Lacs

    Goal: I would like to diversify my investments in such a way that i get:
    A. Continuous supply of money at fixed intervals (very important)
    B. Tax benefit

    I look forward for your suggestions.

    Best regards

    1. Saurabh

      Let me prioratize the points which you should take into account in your life .

      1. Take term insurance ( do it asap , write down how those 30 lacs will take care of EVERYTHING from monthly income , to child goals to retirement etc for your spouse , in case you shift your base to heaven) . If you have nothing with you as property or bank balance etc , then your life insurance might be mch higher than 30 lacs . check it again

      2. Re-study your ULIP , see what the charges in future after the new ULIP gidelines . It might happen that you can continue the ULIP , if you are ready to effectively use it .

      3. You want generate monthy income for you , but your have some good amount of money to invest in lumpsum to generate some respectable income every month or quarter . So for now you can invest in MIP’s with quarterly dividend option , but i am not sure how much it can provide you


  158. Sandeep says:

    Hi Manish,

    Thank u very much for guiding & educating me (a novice in the financial, insurance & investment industry) in just one single day. My Sunday became very fruitful.

    1. Sandeep

      nice to hear that .. keep reading

  159. B says:

    This is a fantastic effort in educating the masses. For years I have been avoiding ULIPS and Moneyback/Endowment plans for their pathetic IRR. Good job and keep it up

    1. Good to hear that 🙂


  160. Gokul says:

    Could you please tell me about jeevan saral T B 165

    1. Gokul

      At the moment I have not written any review on that . It will come soon . Find on net for now


  161. babu says:

    dear manish,
    i feel you are going overboard with your views and comments. ofcourse, that is what is called democracy. while there are so many regulations and code of conduct for intermediaries, there is none for blogs and opinions. So, anybody can say anything as far as there is someone to listen.
    Your views on LIC/Endowment policies are totally biased. I will tell you one thing. You are young and dont join the bunch of personal finance gurus who term all old things as bad and avoidable. It might be fanciful to say that but the truth is not that. Not all endowment policy holders are fools and idiots.
    Just to enlighten yourself and the f0llowers of this blog, take an online opinion poll from people who have saved for say 15 – 20 years and 20 -25 years and the total accumulation. The winner will be LIC policy proceeds. Reason is just simple. With all other redeemable products with easy exit options, investors take out for either building a house, or car or marriage, etc…but they stick to their LIC policy….and creating long term return akin to bank FD with tax benefits is no joke.
    I really like you and appreciate your blog for all its fresh thinking. But dont become one of those modern pundits and fall into that trap of calling all established old things as crap.

    1. Babu

      You got it wrong , Its not about LIC , its about product, these products endowments plans are not bad , but they are unsuitable for majority of investors if you judge them on parameters of liquidity, returns and complexity. The investors who have takes Endowment plans have lost so much in opportunity costs (returns which they didnt make by not investing in equity linked products) .

      Regarding the poll or survey which you are talking about , it will definetely be in LIC favor as most of the investors do not have any idea about returns , liquidity . In a way they are so ignorant that they have no idea what they are doing in their financial life .

      As a agent/advisors/educators its our responsibility to eduacte others, which part of my argument above does not look right to you ?

      Also to prove your point, can you give me an analysis or comparision of endowment plan investments vs Term + ETF/Equity-MF for last 15-20 yrs and see how both fare in different parameters ?


      1. babu says:

        Dear Manish,
        Endowment plans are not for liquidity and returns. The concept is very simple. Long term product with life cover /returns and safety matching bank fd / less liquidity / plus tax savings and tax efficiency . These are the tenets that endowment plans in India are built upon. I am sure we are not talking about mis selling here, since that is a common evil for any product / advice.
        So, there is room for such a product in any investors financial plan. That is the point. You are not considering the long term accumulation effect of such products. That is what i said about the poll results. Think this way. Today LIC/ Life insurance companies are the biggest players in the stock market and the biggest available counterweight [even though very small in comparison, relatively] for the FII investments in stock markets. But for these institutions the volatality in stock markets would be much more. And talk of nation building, where these are significant contributors.
        So, what is request of you is not to fall trap to cheap and uninitiated bunch of critics who really dont know what they are talking about.
        Please dont compare endowment savings products with equity / linked products as they are totally different animals. And as such the opportunity cost comparison does not hold water.
        Just by the views of your website comments, it should not be judged that most of the endowment product buyers dont have any idea about financial literacy. There are such a lot of brilliant financial geniuses who are patrons of such products. Albeit to the extent required in their overall financial plan under the debt allocation. Coming to debt allocation, PPF is one of the best product but a max of only 70k p.a can be stashed out there. 8% tax free long term returns [PPF rate is floating, current at 8%] is quite a good return by any standard. Again EPF and VPF also comes in the picture, which are good allocations to debt. Next comes these endowment, whole life and other products.[You have also commented that it is not a good idea to invest in PPF]

        1. Babu

          Ok , I accept that there can be a class of investors for whom it might be a good product and also endowment plans helps in building the discipline.


  162. shiv pal patel says:

    dear sir,
    i am investing in jivan shree from jan.2002 my premium is 24326/ and sa is 5 lacs i have paid 9 year premium its premium paying term is 16 year and maturity is after 25 years. today my age 27 years. what is surrendetr value. if i pay another 1 premium means total 10 premium then how much amount i can get (may be loyalty additionis given). also i want know the guaranty addition is given for premium paying term 16 years or full term 25 years.

    thanks and regards
    shiv pal patel
    korba (c.g.)

    1. Shiv

      You should look at policy illustration for understanding this or ask your agent , he will help you in understanding this .


  163. Ambica Prasad says:

    Hi Manish,

    Wanted to know if ICICI Prudential iProtect is a good plan. The premiums for this plan is very low and seems to be very exciting. Since its a new one, I want to be doubly sure. What is your opinion on this? Can you suggest any alternatives?

    Ambica Prasad

  164. Sunil says:

    I accidently happen to see this site and now regret my decisions to buy 3 LIC policies purely because of requests (read as emotional blackmail) from relatives 🙁
    Now I have decided to surrender 2 of my policies (Jeevan Anand+Jeevan Nidhi) for which I have paid premium for 6 years. However, there is one policy (Jeevan Shree 1-Plan 162) for which I have been paying 25K premium from past 8 years and am thinking to continue. The reason is that I can get loans at 9% without any hassles. I used it twice when I needed it on urgency. Is that sensible?

    1. Sunil

      You have already paid 6 premiums , now when you retire you have to see how much you will get , I dont think you will get more than what you have paid at this point . Check with you agent and also documents . Yes , LIC policies come handy at the time of urgency when you need loan , but you have to see if it makes sense at the cost of returns you get.


      1. Sunil says:

        Thanks for your quick response.

        Just started having that sinking feeling….

      2. Jayesh says:

        Hi Manish,
        I have Lic policy of Jeevan sathi which i discontinued after 5 years . My question is i have not paid up it? Am i need to paid up it or it will automatically paid up after five years if somebody not pays the premium . Pls clarify it.

        1. Jayesh

          LIC policies becomes paid up if you stop your premium , but it would be a good idea to just notify them that you are stopping it . Doesnt take much 🙂


  165. Prasad says:

    Hi Manish,

    Great job. A must read article for every one!!!
    Meanwhile, I have a 2 questions about LIC’s term insurance plans. Requesting you to provide some information.

    1. LIC’s Amulya Jeevan policy provides an option of making a single down payment of complete premium amount, in addition to other options of yearly and half-yearly payments. Is there any downside in purchasing the policy with this single payment mode. Also this single down payment is lot cheaper compared to (yearly premium amount * policy term). Is there any specific reason can you think of for this huge difference.

    2. One of the comments above mentioned that “LIC will not issue a fresh policy for at least 3 years in case an earlier policy of yours stands lapsed or was converted into a paid-up one.” Is this true ?


    1. Prasad

      1) this is very simple , If you pay me Rs 10 each year for next 100 yrs , you will pay 1000 , is it same as paying me 1000 today itself ? No !!

      The Rs 10 you pay me next year would be worth Rs 9 approx today , Rs 10 you pay me 10 yrs from today , will be worth Rs 1-2 today , So if you pay in advance everything , you should be paying much lesser as you have to see what is the current value of those future premiums , read more on this at http://jagoinvestor.dev.diginnovators.site/2009/05/importance-of-net-present-value-and-how.html

      2) I remeber someone told me this , It should be true 🙂


  166. Monika Raheja says:


    I am having 4000 per month saving. I need to invest to get gud returns in future. As my age is 32 and I would invest upto the age of 50 (18 years). How do i invest this money to get gud pension in future.

    Please reply

    1. Monika

      You mainly should look at equity as your option . 18 yrs is a good time, do a SIP in two equity funds for long term . thats all you need . Review them each year . How to find the funds ? You should choose any good long term winner like HDFC top 200 , HDFC equity , DSPBR top 100 or Birla front line . Check my archives section to learn more on how to choose a good mutual funds .


  167. Karthik says:

    Hi Manish,

    How can we convert an existing policy to paid up?


    1. Yes , if you have paid 3 premiums , just stop paying premiums and it will become paid up


  168. Sumeet says:

    Hi Manish,

    You are doing a terrific job with your blog, especially for people like me who have no or little knowledge of how to invest money properly. I had a few queries for myself, hope you get time to respond.

    1. I am 29, earning about 50000 p.m. I am a very risk-averse person (owing to little knowledge about market). I have a 7-month old daughter. What do you suggest my portfolio should be, keeping in mind a time frame of 20 years? At present, I invest almost 60000 p.a. in PPF, which i opened 6 years back. The rest are 2 policies from LIC – an endowment policy and a pension policy, with premiums of 15000 and 10000 p.a. So basically, no equity, no MF. Can you please provide me suggestions to use my money more efficiently and effectively.

    2. Looking at the i-term plan of Aegon-Religare, i see that for a cover of 50 lakhs, their premium is very less (infact almost 3 times lesser) than those of say Amulya Jeevan of LIC. The skeptic in me thinks something is fishy here, or is it? I mean, why would a company give you something at one-third? Should i go for Aegon-Religare?


    1. Sumeet

      Your equity exposure if very less , your being risk averse can be a result of less knowledge about equity , so better lean about equity .

      iTerm does not have agents in between so that makes premium very cheap , better avoid it as of now .


  169. Chandra says:

    Hi Manish

    I have a doubt.

    I have a LIC Money back policy for 5Lacs amount. After 5years completion, I have received 1 Lac amount. is this receipt taxable during that financial year?

    Please let me know.


  170. Harikrishnan says:

    Hi manish,

    You are doing a great job. I am a fan of your blog. Your patience of replying each and every comment is really great. I didnt see this kind of dedication no other blogs so far.

    I am having few clarifications on term insurance. My age is 31. Two years back I got term insurance in Kotak life insuance. For 30 years i am paying 15,600 for 50 lakhs. Is this amount reasonable ? Or do i need to shift to LIC/SBI ?
    Can i go to another term insurance in Aegon ?


    1. Harikishan

      15.6k looks reasonable for 31 yrs old . A little up and down premium will is fine. What are the rates from SBI and LIC ? AR is ok , wont recommend it at this point .


  171. Sachin says:

    I have Jeevan Saral Policy and paying premium of 24500 per year…what is the maturity amount will i get after 20 years…

    1. Sachin

      The details will be there with your agents , also it should be there on LIC website .


      1. Sudi Halder says:

        Hi Sachin,
        It will be approximately Rs. 16,02,960.

        1. Sudi

          Would appreciate if you can also tell how you got that figure ?


  172. Pingback: How much does Mutual Funds Agents earns in commission ?
  173. Ram Kumar says:

    I am a software Eng. My family includes wife(house wife, 27 Years), My Son (1 year).
    My goal is Child Education and marriage.
    I went thru your blog and I feel i am too much insured. Pl find details below:

    1. HDFC Children’s Double Benifit Plan :
    S.A. 4 Lacs
    Annual Premium 21702/-
    Commencement of Policy – Dec2009

    2. LIC Jeevan Tarang at my child’s name:
    S.A. 5 Lacs
    Annual Premium 24000/-
    Commencement of Policy – Dec2009

    3. LIC Jeevan saral for my Wife
    S.A. 5 Lacs
    Annual Premium 24000/-
    Commencement of Policy – Dec2009

    4. LIC Jeevan Anand for myself
    S.A. 5 Lacs
    Quarterly Premium 5294/-
    Commencement of Policy – Apr2007

    5. LIC Jeevan Amulya for
    S.A. 25 Lacs
    Annual Premium 6170/-
    Commencement of Policy – Dec2009

    6. PPF savings : Nearly 1.3 Lacs total.

    Now i am planning to buy one flat in some other city and for that i will be taking around 15 Lac of Home loan for a tenure of 15Years. The EMI expected to be 17000/- per month as on today.
    Take home salary is nearly 42000/-
    Monthly expense nearly 16000/-
    Any Loan : Nil

    Should i stop paying premium for Jeevan Anand and request it to be a paid up policy.
    Should i stop paying premium for any or all of 1,2,3 from this year onwards and suffer loss ?
    While taking policies i did not had idea of buying home.
    I can take medium risk and ready to invest in mutual fund to achieve long term goals for child. I am ready to bear temporary losses for long term benefit.

    Pl suggest.


    1. Ram

      You cant say you have “lot of Insurance” . I feel you are still on lower side if you are the sole earner of the family . your total insurance at the moment is 44 lacs , once you take the home loan , by no chance 44 lacs is adequate . read more on http://jagoinvestor.dev.diginnovators.site/2009/11/how-much-insurance-cover-is-enough.html and http://jagoinvestor.dev.diginnovators.site/2009/10/what-to-get-rid-of-your-junk-insurance.html


      1. Ram Kumar says:

        Thanks Manish,

        I went through both the links. I am the only earner in family. I am having few concerns :

        1. The LIC Jeevan Tarang is for my Child and LIC Jeevan Saral for my wife. Do they need these ? Do you feel i should continue these two policies ? or stop paying premium and should forget 1st year premium paid for these ?

        2. Should i stop paying premium for Jeevan Anand from now ? or Should i pay for 2 more years so that i can get advantage of accrued bonus as well ? or i continue pay premium for 25 years ?

        3. Should i take one more term plan? If yes then, How much it should be ? Should i prefer other than LIC this time ?

        4. At last but not least, Do you mean to say i should continue pay premium for all the existing policies and along with these should take one more term plan?

        Pl reply.

        1. Ram Kumar

          1) If the policy is on their name , then NO . Do you need the money if they are not there tomm ? If you have paid less than 3 premiums you will loose all if you stop, this might make sense

          2) depends on how long you have been paying , you can make it paid up , should you stop after 2 yrs ? calculate the opportunity cost .

          3) Calculate your requirement using the way i have suggested in the articles (see archives) , you can thing about other companies also

          4) yes , the first aim is to cover your self , so take term insurnce no matter what you do with other policies .


  174. mac says:


    I need your advice desperately.

    I had taken the below policies from my LIC agent w/o knowing much facts abt it. Even today i’m not fully aware of the policy and my agent says these are very good policies and will give very good returns in the long term. However its difficult to trust him after reading the above Qs.

    Start date is 14-Oct-06 for all the below policies. I have been paying the premiums regularly till date. I have opted for yearly premium.
    Policy No – Premium Amt – Period – SA
    902840924 – 10,979.00 – 12 12 – 130,000.00
    902840925 – 19,847.00 -12 12 – 235,000.00
    902840926 – 48,493.00 – 14 14 – 680,000.00
    902840928 – 16,889.00 – 24 24 – 425,000.00
    902840930 – 8,914.00 – 34 34 – 320,000.00
    902840931 – 4,572.00 – 44 44 – 200,000.00

    Please suggest wht should be my future course of action
    1. Surrender it and repay home loan (loan of 19,00,000)
    2. Make it fully paid up
    3. Continue with these policies.

    1. Mac

      You should find out how much will you get from your Insurance policies if you surrender them ? the first action should be to forget this whole thing and cover yourself adequtely using a term insurance , if your loan is heavy burden then better pay off that .


      1. mac says:

        Hi Manish,

        Thanks a lot for your quick response.

        The surrender value is 241,159.00
        Premium piad till date 438,776.00
        Loss of 197617.

        Also the loan is not a burden as such. We manage to pay the installments in time.

        Awaiting a quick response once again.

        1. mac says:

          Hi Manish,

          Awaiting your reply 🙂

        2. mac

          Its tough to suggest what you should do without understanding your whole financial situation , I would say that if you are near your maturity period then your can just make it paid up or continue , however if you have just started and its just 3-5 yrs you have paid the premiums , you can consider surrender .


  175. Jairaj says:

    Hi Manish,

    I and my friends were impressed by your article. Till now we had never herd about Term Insurance from our Insurance agent. After reading your blog I have a small query to ask,
    We all (6 of us) have a Jeevan Anand Policy with SA of 1.5 laks, and 5 installment of premium of @ 9363/- yearly have been paid amounting to 46815/- .
    What should we do :
    a) Surrender It and invest the proceeds in Term Insurance Anmol Jeevan with a single premium of 37170 for SA of 10 Lac for a period of 20 yrs. And Invest the same regular amount of premium in MFs as SIP from this year till 20 yrs. (will it fetch better returns then the policy?)

    b) Convert it to a paidup Policy. if that’s the case what will be the benefit.

    We are desparate to get a reply as its already time to pay the 6th installment.
    Can you plz help us out.


    1. Jairaj

      Option a) looks good . However I would suggest you go for a yearly premium option . Also the first thing in your mind should be to cover your self appropriately , how do you guys justify that Rs 10 lacs will take care of all the things in your dependents life once you are dead ?

      option B) is also fine , just that you will get just 30-40% of your money back , which is again a fine option .


      1. Jairaj says:

        Thank you manish for your prompt reply,

        I know Rs. 10 lacs SA is not sufficient, It was just gave an indicative figure. My insurance agent told me i would get back 30k to 31k if i surrender my policy. So we decided to invest the proceeds in either LIC or SBI life Shield policy for the said 10 lacs term policy.

        I want to know as why did you suggest for Yearly premium rather then Single premium.
        In LIC’s Jeevan Anmol for a 31 yr old, SA 10 lacs for 20 yrs
        Single Prm: 37170/-
        Yearly Prm: 3435 * 20 = 68700
        I think, i stand to benefit : 68700-37170 = 31530/-
        Plz educate me on this.

        Thanks once again

        1. Jairaj

          Yearly investments give you flexibility of stopping it later or change to someone else , one time investment means that you are commited to them forever . Why not put the money in FD and then pay yearly premium from the interest .


  176. Kunal says:

    This is truly awesome article.
    After reading this i feel very educative about Insurance + Investment
    I want to tell u that this is the first time i am reading some buddy’s blog with so eager.
    As a decided to make a financial plan for me and my family.

    Hi manish
    i have some Queries here

    i have 2 money back LIC Bima Gold (plan 174) policies (Started in 2006)
    1) 16 year term with sum Assured 2 lakh
    premium : QTY Rs. 1672/- (Annual Total : 6688)
    2) 20 year term with sum Assured 2 lakh
    premium : QTY Rs. 2432/- (Annual Total : 9728)

    i have received Rs. 50000/- in Mar 2010 as Survival Benefit.
    i am waiting eagerly for your expert comments. should i surrender these and opt a PPF+MF option or continue these.

    ref : http://www.onlyinsurances.com/Policy_plans/Plan174.htm

    II) I want to purchase a term plan
    for which i need to make sure that i should not be over insured as well as under insured.
    how should i calculate the sum assured.

    i have referred following article for this calculation.

    Here is my calculation :
    1. Do it straight : 12800000
    2. Do it meticulously : 12000000
    3. insurance companies way : 4000000

    first two look me over insured. waiting for your expert comments

    My Details are

    Age 26 Yr.
    Having a 10 month old son
    Annual Income : Rs. 4 lakh.

    1. Kunal

      Great that you recieved that Money back , you should now surrender the policy and take whatever you are getting .

      You should go for term insurance , the way you calculate is simple, its called need based .

      read : http://jagoinvestor.dev.diginnovators.site/2008/09/how-to-calculate-insurance-requirement.html


      1. Kunal says:

        Thank for an early reply

  177. SB says:

    Hi Manish,

    In the link provided by Roop5 they have mentioned that :

    “LIC will not issue a fresh policy for at least 3 years in case an earlier policy of yours stands lapsed or was converted into a paid-up one.”

    So does that mean that we can’t take LIC’s term plan once we surrender or make our existing policies paid-up?

    Thanks & regards,

  178. sunny says:

    In 2006 i had taken a LIC endowment policy (T14) for sum assured of 500000. Premium is 18851, payable yearly. I have paid 4 premiums till date and the next is due at 26th March 2010. I checked the policy details online and here goes the details–

    Commencement date: 26/03/2006
    Sum assured : Rs 500000
    POlicy term: 25 years
    Accrued Bonus till date: Rs 95000

    Now i am in doubt about the Rs 95000. The figure seems decent to me. Should i continue this or surrender the policy. The surrender value is coming at Rs 37000. The policy is paid up (showing 80000). Please help.

  179. ikonos says:


    Great forum and very informative. Thanks for your contribution to this topic. I just paid my 4th yearly premium (out of 16 yearly installments) for the Jeevan Anand policy with a Sum Assured of 24,50,000 + whatever additional bonus on maturity and again the SA on death i believe. As I realized I was only getting a maximum average return of 6.5%, I decided to get out of paying further premiums. I paid close to 1.75 lakhs annual premium for the last 4 years and I dont want to lose 70% of its value by surrendering the policy. So my next best alternative is to convert it to a paid up one. For the last 3 yrs the avg bonus payment was about 41/1000. I understand since i paid 25% of the total payments my SA will be reduced to 25% of 24.5 lakhs. So at the end of maturity what will be my payout? Will the payout include any bonus and other components? Will my beneficiaries still get the second payment on my death (hopefully its not for a long while). Appreciate your comments.

    PS: I will make other arrangements for my life insurance and investments.

  180. Roop5 says:

    nice FAQ page

    also found how to calculate paid up value of my policy

  181. Roop5 says:

    I have also got insurance cover via my employer . It includes health as well as accident insurance . Does this mean I should not go in for a term insurance of my own ?

    1. Roop5

      You should go for term insurance , your employer only covers for health and accidental , what if you are dead tomm 🙂

      make sure you have financial dependents 🙂


      1. Roop5 says:

        I have dependents ( parents + wife ) . May be a kid in next 1-2 yrs 🙂
        Otherwise my company gives following insurances
        1) Group Term Life Insurance (Employee Deposit Linked Insurance ) (1.4 lakh)
        2) Group Personal Accident Insurance (Roughly 60 lakh ) :B
        3) Group Term Life Insurance (future service liability) (3.5 lakh)
        4) Group Mediclaim Insurance ( 4 lakh family floater)
        What is the difference between above no.1 and no.3. Does this exclude general insurance ?

        1. Roop5 says:

          also you did not tell about accural bonus of 83k . What is this ?

        2. No idea on this ..

          anyone ?

  182. Roop5 says:

    Hi Manish
    Thanks for the enlightment 🙂
    A small query………I had taken LIC Endowment assurance policy ( T. no. 14) for 20 yrs period in 2005. After reading ur views I have made my mind to stop payment of premium. I have so far paid 1.1 lakh Rs for this policy so far but I am not exactly sure about what happens to this existing “investment” done.
    My policy commencement date : 28th Aug’2005
    Sum assured : 5,00,000
    Premium : 12,247 ( Half yearly ) ie 24,494 yearly

    Also I see something called as Accurred bonus of Rs 83,000 in policy details. What is this ?
    LIC website says the following regarding Premium Stoppage:
    “If payment of premiums ceases after at least THREE years’ premiums have been paid , a free paid-up policy for a reduced sum assured will be automatically secured provided the reduced sum assured, exclusive of any attached bonus, is not less than Rs. 250/-. The reduced sum assured will become payable on the event as stipulated in the policy. ”
    What does the above staement mean ? Does this mean I can now stop payment of premium without worry and invest the money in better instruments ?

    1. Roop5

      Making it paid up means , you will get insurance cover for 1 more year and what ever is your current value of investment (after making it paid up , there is a way to calculate it) , you will get it at maturity . Surrendering means getting the money now !! . but it would be very less .. This is the problem with endowment plans ,the trap factor is pretty strong !!


      1. Roop5 says:

        how do i calculate the paid up value of the policy ?
        basically I am wondering should I continue paying the premium or not. Whats ur advice ?
        Decision would be basis the return on 1.1 lakh that I have invested

  183. Krishna says:

    Hi Manish, Happy Holi

    First of all Hats Off to you! 🙂

    1) My age is 29, i want to take Term insurance Amulya jeevan 25 lacs (35 yrs), at what
    age i should go for 30, 35, etc.. ? to get max advantage.
    2) As you have already said 2 term insurance diversified, what is the advantage ?
    when compared to my first point.
    3) I want to invest 2-3 MF-SIP diversified of 1000/month, can you please throw some
    light on this. Can i invest those SIP’s blindly for 15 years ? or it should be less say
    3/5/10 years.
    4) I have plans to take jeevan anand 5 lacs S.A 20 years , on maturity will i get 15 Lacs,
    i.e 10 Lacs more (bonus + Loyalty), can you please confirm whether the agent is
    5) Can you please guide me on Medical Insurance.

    1. Krishna

      thanks for your comment 🙂

      1) Take it NOW !! , you never wait for Life insurance if you NEED it . Just imagine if you wait for some time to get “MAX ADVANTAGE” and in between you are dead , then ?
      2) We divide the insurance in 2 so that we have flexibility to reduce it later : http://jagoinvestor.dev.diginnovators.site/2008/11/we-will-today-discuss-some-of-best.html
      3) invest in funds from http://jagoinvestor.dev.diginnovators.site/2009/08/list-of-best-equity-diversified-mutual.html , you never invest “blindly” ever . But you can invest with a long term horizon in mind and do less work , do an yearly review and see how the funds are performing at that time , if they are not , get rid of them and add new .
      4) Dont take it , you have better choices , invest in MF + ETF + Index Funds + PPF + NPS , no endowment policies please : http://jagoinvestor.dev.diginnovators.site/2008/10/why-endowment-policy-are-never-best_08.html
      5) What kind of Guidance are you looking for ? see : http://jagoinvestor.dev.diginnovators.site/2010/01/introduction-to-health-insurance-in-india.html


  184. Rocky says:

    I follow your blog via email subscription.
    Is there a risk in investing all money with one fund house. I have often wondered and I like to ask your view. What if I take term insurance from say LIC and invest all money with say HDFC MF( 50% in Top200, 25% in Prudence and 25% in Mid-cap)?
    I have heard something like FUND HOUSE risk but what is it really? And incase of the New Pension Scheme (NPS) you actually have to opt for one fund house!!

    1. Rocky

      Thanks 🙂

      Investing all in a single fund does not have much risk , but from the view of diversification in risk , we can invest in more than 1 fund house , here the risk is not about return , its about secure hands .


  185. sandeep says:

    just amazing sincerity with which you are responding to people’s queries….i recently read the forbes india dec 09 issue, where they had a good article about all these fundas and just amazed how beautifully you have explained with data that term policy is a must have in one’s portfolio and rest of the money you can invest in better plans….

    1. Sandeep

      Thanks 🙂 , are you following this strategy of Term + MF ?


  186. Krishna says:


    What about Chit funds.How profitable are they if you go with Govt Organised Chit companies.

    1. Krishna

      I dont think chit funds are of much use and worth . They are mainly a convinience tool rahter than growth tool .


  187. Nag says:

    Can you help?
    I am investing 14k per annum in LIC jeevan anand….it is for 16 yrs…….and i would get 4Lakh at the end of tenure….plus a life long coverage of 2 lakh…is it right option?
    Jeevan anand

    1. Nag

      Your IRR comes to around 6.5%

      >>> r=.065
      >>> 14000 * (1+r)* ((1+r) ** 16 – 1)/r

      Is it the right option ? Its you , who have to answer if you are satisfied with 6.5% return in 16 yrs in a environment where 16 yrs return come out to be in range of 12-20% from equity , which would have made your 14k payment per year into anywhere from 7-14 lacs range instead of 4 lacs .


  188. Mohan K says:

    Hi Manish,

    Your articles are excellent, i do read all of your articles without missing anyone.

    I would like to ask you one thing.

    I am just started investing 25K per year for 5 years in ICICI Prudential Life (LifeStage Assure Pension Plan), in this as ICICI executive told me that 5 years is the locking period.

    Could you please suggest on this whether it is good or not

    Right now i dont have any kind of insurance, So I am planning to take Term Life Insurance by reading all of your articles.

    I am earning 30000 per month and my age is 23

    Could you please suggest me which is Term Polocy suits to me.

    I will be waiting for your reply.
    Mohan K

    1. manish says:


      regarding the policy from ICICI , its the same kind of ULIP like other . I dont think if it fits you . Regarding 5 yrs lockin did you check the policy document ?

      term insurance you can take anyone which is the cheapest one . See apnainsurance.com


  189. Ningthem says:

    Hi Manish,
    Just a little confusion on the Term Insurance claim and eligibility.
    When I inquire about eligibility for religare iTerm policy here is what they say:

    =====My Mail================

    Hi Sir/Madam,
    I am looking for an iTerm term policy and wanted to buy online. However before proceeding , I would like to know your answers for the following question I have.

    1. I am from Imphal and my parents and other family members are in Manipur state. I am currently staying at Bangalore (which is covered location in your website) and working as software professional.

    Can I take this policy though I am basically from Manipur state, which is not listed as of now for this policy in your website ?

    2. In case of claim , how is going to be dealt?. Won’t you need my permanent address . If so where do I mentioned that while buying this product?
    Please let me know your answers.

    Thanks and regards
    ==================This is what they reply=========
    Dear Mr. Ningthem,

    Thank you for writing to AEGON Religare life insurance.

    Currently ITERM Plan can be opted by the customer who resides in the cities which are listed on the website. We would like to inform you that our services are only available for the list of cities that are mentioned in the website. In case we launch the same in your city (Manipur) you will be intimated.

    We are looking forward to be operational at other cities as well in the near future and would update the same in website when functional.

    Incase of any further information required please feel free to call on our Toll Free number 1-800-209-9090 Monday to Sunday between 08:00 am till 08:30pm OR write to us at customer.care@aegonreligare.com or visit our website at http://www.aegonreligare.com.


    Executive- Service Delivery
    AEGON Religare Life Insurance Company Limited
    “We are committed to provide the best customer service experience in Insurance Industry”


    This means that I can not get this policy as my state is not listed/covered.

    Doe this apply to other Insurance also? If so, I already have 2-3 ULIPs from ICICI which has some insurance cover. neither they (Agents) ask my native state nor do I. How are these insurance dealt with this scenario?

    Comment please manish!


    1. manish says:


      Regarding other insurance policies , Its not like that . Most of the other companies have wide cover . AR is a new one and is totally online so it cant cover all the cities . Regarding your case , its still not clear if you will get it or not , because they said that only people who are residing in the cities they cover are covered .

      So you are residing in the city which they cover . So you should get it .


      1. Murugesh says:

        Hi Manish,

        i become a fan of you, thanks for doing some good job. i have started my career with IT industry bit late. now i am 33. i have start investing from this jan 11, my policy is LIC Jeevan Anand 3 Lac Policy,15 yrs. QY Rs.5300/- i paid two installments till now. i am planning to invest Rs 3000 to 5000 every month from next month onwards, what would you suggest for me. which policy should i select? please guide me i am already started very late.

        1. Murugesh

          Dont buy insurance policies for investment . Just put money each month in a equity funds or an index fund to be less volatile


  190. Shetty says:


    premium is quarterly 15,920/- not 63,800/- as mentioned in previous comment


    1. manish says:


      In 10 years you will pay 6.38 lacs and considering you get 10 lacs return , its not more than 5-6% return in 10 yrs . So from return point , its not a good choice .

      Regarding EET of PPF , LIC and all , i would not like to comment right now as its still not confirmed and yet to become a law


  191. Shetty says:

    Hi Manish,

    I have invested in endowment policy for term 10 years, plan 14. SA= 600000, premium quarterly = 63800/- I started in Nov’2000 and Nov’2010 is maturity. i know its too late to decide for closure and better wait for maturity. But quetion is how much i can get returns?

    What ploicy is the best to invest the return amount. Also, effective apr,2011 all returns from LIC, PPF will be considered as EET i.e. return will be taxed after maturity. `


  192. manish says:


    You should surrender the policies and try to invest the money in equities for long term , see http://jagoinvestor.dev.diginnovators.site/2009/10/what-to-get-rid-of-your-junk-insurance.html


  193. Bhaskar says:

    dear manish,
    I have 2 policies-Jeevan Shri &Money back(both 20 years).The premia are 10,868 & 5,667.Policies are about 9 years old.My age is 54 yrs.Should I continue these policies or go for a surrender ?Pl advise me with illustrations because my earnings are uncertain and like others mine is a agent-trap case.

  194. Krishna says:


    Also what about Kisan Vikas Patra from Post office which works about 8.4% p.a and money doubles on 8 years and 7 months. I feel this is better than PPF also less lockin period about 2 and half years. Comments on this ………

    1. manish says:


      KVP has other issues like interest in taxable and no partial maturity . With PPF you can withdraw partially atleast. money doubling in 8 yr and 7 month is not a big deal .. it does not even translate to 6-7% return .


  195. Kiran says:

    Hi Manish, Just came across this blog and found it very informative and making me re-think just as am about to sign up a LIC policy. I hope to seek your advice if am making the right decision.
    Plan – Jeevan Shree 1
    Sum Assured – 50Lakhs
    Yearly premium – Rs 4.87 Lakhs
    Number of years to Pay: 10 years
    Maturity of policy at the end of 15 years
    Maturity amount: Rs 1.24 Cr

    Compounding on a year on year basis, its seems to pay off at approx 9% PA. Would you recommend this policy? Or do you think there any short comings?

    There are other choices for timelines including a 10 year, 20 year and a 25 year maturity times. Would any one be better than another ? I’m 30 yrs old.

    1. manish says:


      the first point is regarding Maturity amount of 1.24 crores , Is it indicative or is it guaranteed ? Check the documents and ask the agent . I am not sure if its guaranteed . They give illustrations on different interest rates of 6% and 10% .

      You can look at mutual funds as options or ETF’s . Mainly it should be equity , LIC returns generally do not go past 6% . check your policy numbers and the promises once again .

      Better look for your life cover once again .


      1. Kiran says:

        You are right. Its variable and can change. The agent misguided with bloated figures until I verified it with documentation. Guarenteed figures are much lower. About 80 Lakh maturity on a 50 Lakh policy at the end of 15 years.
        Now you recommend MF and ETF. I do not live in India. Could you please suggest a way for me to do this ? Could it be done online ? Do you do financial counselling ?

        1. Kiran

          I knew it .. 80 lacs maturity on 50 lacs policy is not a big deal , even Bank FD will beat it . . Do you have any trading account with Bank like ICICI or HDFC who deal in mutual funds , you can buy them online . Not an issue 🙂 .

          Or next time when you come india , open one or start an SIP with ECS to bank where you have an indian account .

          I do financial planning , mail me .


  196. Krishna says:

    Please give ur reviews on Jeevan Surabhi of LIC which is mone back plan from LIC

    1. Krishna

      Right now its not possible to give full review , but if its endowment or money back plan then mostly its return would be in range of 5-6% max . You can try to calculate the IRR of the policy and see .


      1. Krishna says:

        Jeevan Surabhi is money back plan i have paid the 1st premium 32161/year. Do you advice me to stick with it for 3 more years ? beforfe surrendering it

        1. manish says:


          You will get 30% of the amount after 3 yrs , so loosing 32k now or paying 96k and getting back 32k back after 3 yrs .. What do you think is a better choice 🙂


          1. Krishna says:

            Again the Money may be taxed after the new tax code.I am confused how to build the corpus for my daughters education, marriage , and also for my retirement. I have two ELSS Funds HDFC TAX Saver and Canara Robeco. Are they good funds.Can you please guide me

            1. manish says:


              Both of them are good funds .. regarding New tax code .. its better that let it get confirmed and then think about it .. for now just go with the flow . Even if it comes into the action , you will save more money every year in tax and have more investible surplus .


  197. Sunil says:

    Hi Manish ,

    This is my first query need your help to check if i have invested rightly.
    1. HDFC young star 30000/annum for my 2yr old baby
    2. SBI Shield :9500/annum for 25lac coverage for myself, @ 5%increase/annum scheme
    3. SBI ULIP III in my spouse name – @24K/yr lockin 5yrs which gives 480000 insurance cover.
    4. Also i had invested around 30k in 4 different company SIP’s which i have stopped.
    5. Reliance natural resources & Diversified petroleum : 15k + 15k around 3yrs back.
    6. Reliance power IPO around 4k which not going anywhere.

    Please advise if i need to change any othese.


    1. manish says:


      1. As far as you can manage your ULIP well and do switching at right time, you will good condition . If you just want to sit back and do nothing then its not a right product , in that case a simple SIP in MF was a better choice .

      2. Good one .

      3. Same as 1

      4. You mean different MF’s ?

      5. Check your returns if its more than 20% , get out and better invest in diversified funds .. These are sectoral funds .. Are you ok with them ?

      6. Investing in IPO does not mean sticking with it . I also bought this same thing , now I am out . If one does not know stock trading , there is no reason to trade in short term . there are better stocks for long term .


  198. Ningthem says:

    Hi Manish,
    I am a new user here. I just have basic doubt :Please clarify:
    My LIC Endowment policy detail:
    Tenure 15:
    SA: 3Lacs
    Premium: 20303
    With the assumption of 48/1000 bonus and FAB of 500/1000, my maturity value come around 6.6Lacs: {48*(300000/1000)*15+3Lacs(SA)+(500/1000)*3Lacs} : i.e 216000+3Lacs+150000=6.66Lacs
    However, If I put the same amount (premium of 20300) for 15 years in pure PPF,at the end of 15 years, I could get an amount of Rs 595,283. i.e 5.95 Lacs which is less than LIC’s maturity value.

    I used the PPF online calculator in this link (http://www.personalfn.com/tax/calc/ppf.asp).

    Where am I wrong here?. Do I need to calculate using Anuity formula?

    If not, surrendering endowment policy and then taking new term policy and PPF combination may not be better option.I can just add another term policy instead of surrendering this LIC policy.Please guide me.

    1. Ningthem

      Who gave you the assumptions of 48/1000 and 500/1000 . Are they average cases ? If yes , then ya , It would beat plain PPF .

      But , having said that You also have to look at other things . not just returns . With PPF option . you have other advantages like

      1. Early partical withdrawals (in LIC you can take just loan anf you have to pay interest)
      2. You can reduce your contribution and pay just 500 . incase some day you dont have much money . With LIC policy it will be missing .

      You have to consider liquidity and flexibity too with your investment product .

      Apart from this , because the term is 15 yrs . Just plain PPF is not recommended . you should be using Equity for 15 yrs and you can assume 12% return from it at the minimum . In that case you will have 8.47 lacs .

      >>> 20300 * (1.12)*((1.12)**15 -1)/.12

      Comments ?


      1. Ningthem says:

        Hi Manish,
        Thanks for your explaination and pointing out the benefits of PPF.

        I was using Bhargav comment dated “October 31, 2008 at 10:31 pm” in this article for bunus (48/1000) and FAB (500/1000). Assuming bonus of 48/1000 was wrong for my case (term 15 years).When I see the bonus information from LIC website http://www.licindia.in/bonus_info.htm#5 , the average bonus for 11-to-15 years term is Rs 38/1000 for past 3-4 years. Not sure about the FAB( could not open the link).

        So, if I take bonus of 38/1000 and FAB 500/1000, it still comes around 6.21 Lacs at the end of 15 Year which is still above PPF value (5.95Lacs).

        If I can get the average FAB for 11-15 yrs term , I could get the right calculation.

        Coming beck to the question “Does it make sense to discontinue my policy (details mentioned above)and go for PPF +Term “, I am still confused.

        I am not considering the Term+MF (“Equity for 15 yrs” as you mentioned) at this time.
        With the above calculation I am still feeling that ,instead of surrendering the existing LIC policy,taking another term insurance above this LIC policy would be better option for me.
        Manish, I need your comment.

        1. manish says:


          Lets take that the calculation you have done are final .

          You will get 26k more in LIC policy than a PPF plan . From return potential you are correct . But now, you are exposed to some risks which you should understand and accept .

          1. You dont have much flexibility to withdraw from money from your LIC policy in between (PPF also has issues)
          2. You cant reduce the contribution in LIC (PPF you can)
          3. If you go with PPF , even the rate for that can come down or go up .

          So , once you know and understand all of these , then you can take the decision which suits you . Your idea of taking a term plan over LIC looks good .


          1. Ningthem says:

            Hi Manish,

            This helps.
            Thanks a ton for helping so many people including me like this.
            Please keep doing good work. I really like many articles you wrote and really appreciate. I will come beck with some more queries on different/similar topics seeking your help. For the time being -bye.

            1. manish says:


              Sure .. just mail me or start a thread on forum 🙂


  199. Excellent analysis, Manish. As usual, I must add.
    Your clear cut explanations and patient answering makes me feel ‘small’ about my knowledge on Insurance.
    I have been always against ULIPs since time immemorial. But I never guessed that Endowment policies too are such rip-offs.
    Thanks for enlightening and keep up the good work
    .-= Srikanth Matrubai´s last blog ..QATAR NEWSPAPER PUBLISHES MY VIEW ON DEBT FUNDS =-.

    1. Great ..

      Nice to know you like it so much 🙂

      I saw your blog , are you advicing in bangalore ? We can catch up sometimes , I hope you will answer other teaders and help them in future .. great to have you here .


  200. vivek chowdhry says:

    Its realy disturbing to know that what i did in the past was totaly wrong.
    You r so inteligent, surely you have done some course in finance or financial planning,
    but i m a doctor, recently startd earning and for obvious reason i did’nt have any damn knowledge abt the commerce, finance and similar things like these,even i dont knw the names. There are a number of people like me who dont know abt the financial planning, abt how to invest, where to invest but still putting their money into these futile products. I m damn sure anybody who has invested in these products when they would know the bitter truth of these products would get dishearten. I m very thankfull to you for letting us know the facts. but tell me wat should i do now. i have an 5 yrs old LIC’s endowment policy (48) which is getting matured after a total of 25 yrs i hv to pay the premium for a total of 20 yrs, the sum assured is 7 lakh.now wat is ur expert opinion abt this plan how much is i m supposed to get after 25 yrs is it useful or simply trash. wat shold i do now . if i surrender it wat would i get in return.please tell……..

    1. manish says:


      I am glad you finally realised what you have to do in future . Regarding your LIC policy , you will get SA + Bonus at the end .. which would be 7 lacs + Bonus

      lets take Bonus being 100% of SA , you will still get 14 lacs at the end inthe best case .. How what are your yearly expenses today (consider you are married) . I assume 3-3.5 lacs a year (25-30k per month) . With 6% inflation your yearly expenses will jump to 11 lacs a year and you will recieve almost a year worth of expenses of money from your Endowment policy . Now its upon you how you interpret it .. Is it good or is it bad .. that i would leave on you .


  201. SB says:

    Hi Manish,

    First let me thank you for this excellent article. You are doing a great job educating people like us who knows nothing about investment.

    I am also a victim of endowment+money back policies. I have two LIC Jeevan Anand policies(5660 Y , 8050 HY) and one LIC Money Back policy (6600 HY).

    First policy is 3 years old and 2nd and 3rd policies are one year old each. I just need your kind advice to get rid of these policies in such a way that it don’t hurt me much.



    1. manish says:


      Thanks for being a member of Jagoinvestor .

      Truly Speaking , its going to hurt you badly . There cant be a best option , the options are limited here .. Here is the best thing you can do

      – The one which has completed 3 yrs , Surrender it
      – The other two which have completed just 1 yrs . Forget it and make a new start

      Mainly contact your LIC agent and tell him you want to do this , Just see what is his reaction and his support . Dont forget for notice how well he tries to brain wash you for not closing the policy , Ask Him two questions

      1 . what is the IRR or CAGR return of the policies and how it will help you acheive your financial goal , does the return provided by your LIC policy fight inflation
      2. How does the Insurance provided by the Policies help your Dependends after you are gone ? Can it ? go into detail , create a situation and see how that amount is helping you , can it provide current montly income to your family , can it take care of your child education , marriage etc , can it help incase some ciritical emergency happens ?

      IF you continue them just because you dont loose out on what you already paid ,, then you will have to stick to it forever and that would be the worst case 🙁


      1. SB says:

        Thanks a lot Manish for your quick reply.

        You are very right here and I have to take this tough decision.

        I have few more questions and hope you don’t mind answering them.

        Now as I need to opt for a Term policy, which one do you think will be a better option from the below two policies listed at LIC website, if I need a cover of 25L ?

        1) Anmol Jeevan-I (Minimum Sum Assured – Rs.5,00,000/- , Note : The policy would be issued in multiples of Rs. one lakh for Sum Assured above Rs. five lakh.)
        2) Amulya Jeevan-I (Minimum Sum Assured – Rs.25,00,000/- )

        Can I discontinue paying premium to these policies anytime I want ?

        How about taking 5 Anmol Jeevan policies instead of one Amulya Jeevan policy ? Will this give me more control over my investment ?

        Thanks in advance.


        1. Manish says:

          I dont mind answering any questions ever 🙂 . thats the reason this blog has close to 2,000 comments and half are my reply 🙂

          So I can see that you are die hard fan of LIC 🙂 . I say thing because your set of choices are LIC Term Insurance only . I would like to tell you that if you feel that safety is a concern in Insurance sector , get that feeling out of mind, IRDA is doing great job there to make sure every company is Financially sound to make the payments . So issues there ..

          LIC premiums are high compared to other alternatives like SBI , Aegon Religare etc . I would recommend you to buy a New Term Insurnace policy from Aegon Religare called “iTerm” . It can be only bought Online . Calculate your Insurance Requirement : http://jagoinvestor.dev.diginnovators.site/2008/09/how-to-calculate-insurance-requirement.html

          After you calculate your insurance requirement split it into 2 polices and take two seperate term insurance from different companies .

          Feel free to ask questions any number of times, just make sure they less than a million qustion .

          .-= Manish´s last blog ..What happens if you stop your ULIPs before 3 years =-.

  202. Manish Chauhan says:


    You need to look for appropriate policyu as per your needs . try apnainsurance.com


    I am glad you feel so good .

    choosing sbi over lic will not create any issue as per my knowledge . LIC is still the most trusted for claim settlement .. For term insurance , every some company is same .


  203. naz says:

    hiya manish!! hope you are enjoying your vaccations.. happy diwali.I love the way you break down all the details into tiny little digestible bits. after reading your articles i feel so "knowledgable" and ready to conquer the financial world…but i still need your help in deciding if the 50% increment wala sbi shield policy is any good and also is there any risk if i choose sbi over lic?

  204. srinivas says:

    hi manish,
    according to u which is the best health insurance policy with returns for family

  205. Manish Chauhan says:

    @S Champakara

    OMG !! .. This is exactly what NRI's do !! .. I suspect you are also working in outside country and have taken these polices for your Child Education/Marriage needs

    This was exactly the case of one of my clients . The biggest problem with these polices are that they do not provide required rate of return which you need . Its true that its totally 100% secure , because it comes from GOD company .. But then what do you if it does not meet your expenses at the end when you need .

    There may be two issues

    – Insurance Cover : You might be underinsured and dont even know how to find out if you really are . Better take pure Term covers and secure your Family future incase you are missing .

    – Future Goals : You need to generate good returns on your long term goals without investing in Mutual funds or Equity . So get out of "FD" and those GOD Company "Endowment policies" .. They do dont even beat inflation in long term .

    I think your should do your Insurance planning, but full financial planning is advisable . Contact me offline on my email incase you need professional services .


  206. Anonymous says:

    Hi Manish,

    I accidently bumped into your blog and after reading this is deeply distressed.

    I have 14 Marriage/Education endowment policies having total annual premium of Rs.3,90,000. I have paid first year premium and now (October) 2nd year premium is due.

    So having already Rs.390,000 paid ,please suggest what would be a wise course of action ?

    Thanks in advance
    S Champakara

  207. Manish Chauhan says:


    oops.. that little old polices .. 🙂

    I am not sure how much tenure is left .. but still you can make them paid up and let the money go in some thing useful from here .


  208. Chaks says:

    Hi Manish,

    Absolutely great website you have put up. All info is so simply and meaningfully put up.

    I agree that endowment policies are a drain on our returns. Needless to say that I have also taken a plunge into the same drain in my earlier days of investing. I have a Jeevan Shree, Jeevan Suraksha (Jun 2002) and one Money back (1996). My annual outgo is around 44K. Have been wondering if I should just close these as money already put in kind of sunk and I need to plan better to maxmise my future returns.

    Thanks and Regards

  209. Manish Chauhan says:


    investing in PPF and MF with term insurance is always advisable .

    You can for sure do that . The first 2 you mentioned do not excite me , but the kotak one is ok . You can consider it for long term , but at the end take your call .

    Make sure you check the surrender value of your policies 🙂


  210. arunwave says:


    I have took 3 ULIPs during 2006.
    HDFC Endowment plan with 4.5k quarterly,
    METLIFE smart plus with 19.9k per annum,
    and Kotak Smart invenstment plan with 2k monthly.

    But after after going through one of you article
    I am thinking of closing all/some of them &
    invest the same in PPF/MF.
    And as for as insursance, planning to go for Term Insurance.

    Please give your suggestion for the same.

    Arun Kumar U S

  211. Manish Chauhan says:


    Hi Arun , you commented after long time. There are many new articles now .
    You are totally correct about checking things before we invest . Buyers Beware is the mantra which will drive the indian finance system in next some years .


    You need to go for plain term cover + SIP in mutual funds + Health Insurance . Also you should invest in FD's and a small part in balanced funds to fund your MBA in next 3 yrs .

  212. Arun says:

    Hi Manish,

    Long time!
    Another awesome article and your calculations are spot on.

    Its a matter of awareness. If we do not check before we invest, we will be taken for a ride.

  213. Vivek says:

    @ mansh
    this really is an eye-opener kudos to you manish.
    i would request you to give me some suggeston regarding investng my savings
    i have just joined my first job after graduating from engg. college. salary 4.5 lacs pa, age-23years
    i need to invest somewhere around 60k this year. my requirementss-insurance cover+moderate-high return+some plan taking care of mishaps such as accidents or disability

    i am nt willing to pay high sums of money as insurance premiums in the endowment policy.
    the other thing is, i would go for an MBA degree in 2-3 yrs. so need to fund my education (to some extent). my father is to retire in 2 years

  214. Manish Chauhan says:


    I understand your point , I will accept some of your points like :

    – Endowment plans are very safe investments
    – people should diversify there investment s.

    I accept and support both the points , but END policies are not the best thing one can invest for long term DEBT . I would say , investing in PPF is always better than investing in END plans , because of the flexibility PPF would provide.

    PPF would score above Endowment in every respect , if its comes to insurance , a TERM plan + PPF combo will still be better than Endowment plan .

    anyways .. i understand your point of diversification and investing in Debt .. that is true .

    – Manish

    1. Nikhil Naik says:

      Dear Manish
      I completely agree with you for Term + SIP
      but with TERM + PPF i have some reservations
      PPF used to pay 12% interest at one point of time, but now its paying 8% so it would have been incorrect to assume 8% tax free returns year on year.
      Now with the direct tax proposal we may have Two PPF accounts
      PPF 1 paying taxfree 8% for subscriptions upto 2011 and then PPF 2 paying taxable returns for subscriptions after 2011.

      i am not too sure about this but if table 14 pays 6 % + taxfree returns, wouldnt it be prudent to take a policy right now for next 20-25 years and get 6 % tax free returns for all the next 20 years of subscription ?
      Would love to have your comments on this

      1. manish says:


        Is table 14 returns going to be tax free ? I dont think so .. all the maturity benefits would be taxable i guess . Anyways . PPF is mainly used for Debt component so that you have some debt exposure with your Equity , IT should not be seen as primary instrument for saving for long term goals .


        1. Manish says:

          Hi Manish,
          As per the current tax laws ,maturity from an insurance policy is tax free as in PPF.
          Here i am not suggesting that endowment policies are good,but just an information.


          1. manish says:

            Yup ..

            thats the reason why it can be compared to PPF and Equity funds right now , else they might be more bad .


      2. Manish says:

        I am also holding table 14 from LIC with Anuual premium of 13.5 K,

        Problems with Table 14 are
        1)As pointed by you it provides a returnof 6%,this is pathetic by any standard.Why not go for PPF which is both sax saving and provides 8%.Even a 2% higher rate can make a huge difference in long term.

        2)You have to continiously invest on the fixed date for years,whether or not you have surplus funds to invest.

        3)Generally term is 20-30 yrs,which is a VERY high lockin period.Even if you are dying of hunger and you have 2-3 lacs with LIC(having paid LIC hefty premiums for a small coverage) you cannot use that money.And to top it all LIC gives your own money to you on loan at 9% .How ridiculous.

        Never ever advocate ANY insurance policy other than TERM to any body.
        Insurance shall be taken purely for life coverage needs and not for investment.
        Its an incorrect and worst investment product.



        1. manish says:

          Wow .. I like your attitude 😉 … Angry young man 🙂 . its good


  215. Bhargav says:

    Fantastic work Manish,

    To answer your comment, only thing I can repeat here is

    “it is always a gr8 thing to diversify your saving and distribute your money toward risk free and high return instrument.”

    No person can ignore the return generated by MF in long term but at the same time they are risky and by risky it menas that its value can become zero as well(Althogh historically we don’t have such instances yet this is not enough to rule out its possibilities)so always diversify your saving.

    the only purpose of my comment is to show my little disagreement toward your view against END plans as when it comes to risk free long term saving investment instrument END plans are also one of the good option.

  216. Manish Chauhan says:


    Hi Bhargav , Thanks for your comments .

    The example which i gave in my article was for one of my frinds who took some policy 5-6 yrs ago .

    Lets leave that example aside and take your example and discuss it .


    Tenure : 25 yrs
    yearly premium = 38820
    Maturity benefit = 30 lacs

    Some questions for you .

    1. Please let me and and readers know why do you consider this plan returns are good . I calculated the returns of this policy and it came out to be 6.25% CAGR . Is that a good return ?

    2. Is the Cover provided by this Plan (Rs 10 lacs) enough for a average person . I assume the person who pays an yearly premium of Rs 38820/year , must be earning 4-5 lacs year ,DO you think 2 times him yearly income is enough for this person’s family for whole life ?

    3. You feel that Term + MF is risky (may be they are) , in that case what do you think about Term + PPF ?

    If this 30 yr old person take a term insurance of 30 lacs for 25 yrs , the cheapest premium i can see are around 7,000 , He can invest 38820 in a year in this way .

    Term (7,000) + PPF (31820)

    In that case , from start to end , he will be covered for 30 lacs and at the end he will get 30 lacs.

    Annuity Formula : (31820 * 1.08 * (1.08)**25 )/.08 = 2941899.4900399372 (Almost 30 lacs)

    Even if he dies within 5 yrs , he will get 30 lacs , but in the plan 14 , he wont , Dont you think life is uncertain and anything can happen anytime , so better idea is to consider worst case.

    4. Why do you feel that Term + MF is not a good idea? Dont you expect Indian markets to return even 12% in next 25 yrs , i beleive it will return 15% + atleast …

    Dont you agree or trust Historical data for Equity returns ? (India and Global)
    Do you know any year Y , where Y+25 yrs returns have been less than 12% ?

    I beleive 12% returns in Equity in next 25 yrs is an understatement . It should be more than 14-15% . i know its not guaranteed and not 100% sure, but what shoulnt we trust 99.99% probability ?

    5. As per my assumption in question 2 , where i assumed the annual income of a person as 4-5 lacs , what do you expect his/her monthly expenses to be ? I beleive atleast 20k , 30 yr person will be married and will have kids probably , if not now than after some years . Atleast then his/her monthly income will shoot up to 25k per month , which means 3 lacs/year .

    If we expect inflation to be 7% per annum and do a simple calculation , we can see that his future expenses after 25 yrs would be

    3 lacs * (1+.07)^ 25 = 16.28229 lacs/year

    Which means that the money he gets out from his Policy will be good enough for his next 2 years (just monthly expenses) .

    Is he saving for 25 yrs of his life just to live 2 yrs of good retirement ?

    Bhargav , Please share your comments on all these questions asked ? May be we have missed some point you were trying to put.

    Disclaimer : All the figures are just to give an idea about the situation and should not be taken as the words on Rock . Things can change according to situations .


  217. Anand says:

    Good one bro… People are not so aware of the returns % that an endowment policy would give them.

    The main reason for the same is the commission we pay to the agent who sold us the policy.

    The same story was what I was explaining a teammate of mine who took an insurance policy for investment.

    Good work 🙂 Keep it up..

  218. Bhargav says:

    I don’t know how you get the maturity figure of 23 L.
    If you go for plan no 14 (http://lifeinsureinfo.blogspot.com/2008/07/endowment-with-profitplan-no-14.html)and consider the bonus amount of 48 /1000(which lic has declared for prev fin year and FAB of 500/1000 S.A. it comes to
    10 L + 1440000 + 500000= nearly 30 L which is nothing but a very good return and amount is tax free as well.

    No doubt that term + PPF as you have pointed out is a good bet but in no circumstances term + mF is good ,many financial planner are fooling just to increase the selling of SIP’s and ULIP of their fav companies and they are no way secure, current market condition are the best eg. However it is always a gr8 thing to diversify your saving and distribute your money toward risk free and high return instrument.

    The good thing of PPF is only 15 years lock in and partial withdrawal.
    And if you talk of longer horizon End are one of the best to generate good return the only worst thing is you end up paying heavily if you surrender in between.


      folks here too much emphasis is given to investments in MF or equity markets.If one studies the world markets for last couple of decades the returns are not that spectacular.Does equity markets all the time keep going up? Look at Japan-last 30 years returns are negative.Dow Jones negative returns , most of the European markets are giving -ve returns.I have reason to believe that in the long run MF or equity markets don’t perform!!!

      1. Milan

        It has happened in India also , from 1992 – 2002 , the returns are 0% . But the point is if not equity , then what, I understand that we have chances of negative returns but it depends from economy to economy , and it will happen in India too some day , but I dont think it has to happen in next couple of decades .


  219. Bhargav says:

    I don’t know how you get the maturity figure of 23 L.
    If you go for plan no 14 and consider the bonus amount of 48 /1000(which lic has declared for prev fin year and FAB of 500/1000 S.A. it comes to
    10 L + 1440000 + 500000= nearly 30 L which is nothing but a very good return and amount is tax free as well.

    No doubt that term + PPF as you have pointed out is a good bet but in no circumstances term + mF is good ,many financial planner are fooling just to increase the selling of SIP’s and ULIP of their fav companies and they are no way secure, current market condition are the best eg. However it is always a gr8 thing to diversify your saving and distribute your money toward risk free and high return instrument.

    The good thing of PPF is only 15 years lock in and partial withdrawal.
    And if you talk of longer horizon End are one of the best to generate good return the only worst thing is you end up paying heavily if you surrender in between.

  220. Manish Chauhan says:

    I was wrong at that point , 12% is the pre-tax returns , Actually if you consider Bank FD , they provide 9% returns but for a person in 30% bracket , it comes to be around 9 * .7 = 6.3% return (post tax) .

    Using the same thinking because PPF provides 8% post tax return . Its said that it provides 8/.7 = 11.42 (approx 12%) returns pre-tax (just an assumption that tax will be cut from it , like other debt products) .

    So the correction fro my side is that you must assume that you will be paying tax on PPF part of your investments , which will bring down its reuturns a bit .

    As indian Tax laws are getting better for investors year by year . i truly feel that after 15-20 yrs the tax figures will look so good to investors that it will conme to be 12% returns for sure in long run 🙂

    Thanks for the correction

    – manish

  221. Anonymous says:


    You are just awesome in your thinking, you have truly enlighten me. Now that I know this I can surely spread this knowledge to my friends. Infact I had forwarded your blog link to few of my friends so that they are benefitted from this.

    Had a question about PPF where you said the return are 12%. I understand its 8%, are you also adding the the tax benefit to come to 12% Or am I missing something here ?

    Nitin Pillai

  222. Manish Chauhan says:

    If you ask a person who has his living associated with LIC agentship , he will obviously give you all sort of reasons why its good or Bad, its a same like a company taking your advice in whether to use JAVA or .NET or just C++ ? U will give reasons to him which will look obvious 🙂

    Anyways … lets look at the subject .

    you are paying 23k for 1st and 130k for second policy . which is total of 150k per year , this is a great outgo as i told you already .

    Let us do some analysis of this maturity value . The first thing is that you will get 50 Lacs after 18 years . i am considering that you are retired by then and want to enjoy like with this money , what kind of monthly income will this provide ?

    50 lacs today provides 35k per month (risk free) or max 45k . i am sure today your expenses must be 20-30k per month (india) and after you are married and once you have children , your monthly expenses will go to 35-40k . This is your projected monthly expenses from todays startdards . If you calculate your monthly expenses after 18 yrs considering 6% infation . It should be 1.1 – 1.2 Lacs atleast . Which is way above what that 50 Lacs could provide at that time . Which means that this LIC policy maturity value is not at all sufficient for you , and for this insufficiency you are paying so hefty money for under insuring your self 🙂 .

    Why would you pay another 1.3 lacs and then get 1.2 Lacs back (30% of 4 lacs) after 1 years . If you leave it now , you will get loss of what you already paid . If you leave that policyg now you will get 2.6 lacs loss , if you leave it after 1 year , your loss will be 2.7 Lacs . Better to get out now 🙂

    This will look like a big loss now (2.6 lacs , a big sum) . But if you keep putting that money for another 15 years , you will put 15 * 1.3 lacs = 19.5 lacs .
    If you divert all your 1.5 lacs from today in PPF + MF + Term Insurance , it will look like

    For each year (for 18 years)

    20k : For 80 Lacs Term Insurance for 30 years (25k for LIC Amulya Jeevan)
    30k : PPF (Debt) @12%
    1 Lacs : Equity DIversified Mutual Funds , returns assumed at 15% (pessimistic view)

    PPF will return : 12.5 Lacs
    Mutual Funds will return : 87 Lacs

    Total = 1 Crore at the end of 18 yrs from Now , even this money will not be able to give you what you want at retirement , but its certainly better than what you are getting currently with your Endowment policy.

    Also , better not to commit so high expenses to Endowment policies , there can be risk of Job or any thing else , from where will you pay to them if your Job is in danger or anything of that sort . IN PPF or MUTUAL FUNDS no one will say anything to you .

    Make sure you evaluate what i said to you and re-plan your stuff .. please understand that you are laible for your decisions and no one else .

  223. Anonymous says:

    After reading this post which was an eye opener for me, I spoke to my LIC agent, he was just trying to convince me to stick to the policies, his reasoning was we should always have debt investment. But after reading your article I was enlighten about what I need to do. He sent me all the details about my policies, the figures are as under:

    1) Endowment policy 1 (03/2004): Premium paid: 99500, Surrender value:48500/- (21 years)

    2) Endowment policy 2 (02/2007): Premium paid: 263000, Surrender value:0/- (17 years)

    Endowment policy 1 projected maturity amount is 1405000/-

    Endowment policy 2 projected maturity amount is 3574000/-

    I took a annuity for both policies it gives a return of 5% at the end of said term.

    If I surrender both my policies I will take a loss of 214500/-, I want you frank suggestion:

    1) What would you think here in terms of numbers and what decision would you take ?

    2) Will you continue the 2nd policy for another year and take a surrender value of 30% or end it now?

    3) Another scenario is If I decide to surrender my 2nd policy now I take a loss, I am left another 15 years and if I take an annuity for 15 years term its 7% returns. So is it worth taking the loss or continuing further. This is what my LIC agent asked me, I told him if I continue further I will not think 15 years but 17 years so its still 5% returns.

    I would appreciate your response.

    Nitin Pillai

    1. Sudeep Singh says:

      Hi Nitin,

      I know its too late to reply to this mail, hopefully you have not surrendered your policy. Their is a way where in you can save your investment.

      Share your mail id, will send you the option.



      1. Krishna says:


        Can you send it to my mail id krish_5203@yahoo.co.in. I have an endowment policy Jeevan Anand which has nt been surrendered.


      2. PREM KAMAL says:

        Hi Sudeep,

        I have a LIC endowment policy and I have completed 3 years of payment.
        Total 34000 rs i am payinmg for the policy every year.Pls let me know how can I can caluculate the surrender amount.Would it be a good option for me to surrender.Pls suggest.

        Prem Kamal

        1. abhishek singh says:

          Not a great idea to surrender those policies. Endowments are the best.
          ENDOWMENT + TERM + PPF can go like this.

          For endowment plas instead of taking on single policy of 15 lakhs or 20 lakhs.
          Take policies of 1 lakhs each of tenure 23 – 35 years. So each year your one policy matures and you get those benefits. Hypothecially in the 24th if you dont have money to pay the premium amounts you can always pay withyour matured money which u get in 23rd years.

          for 1 lakh policy u get near to 2.5-3 lakhs approx. or you can get a pension fund with this money too.

          This covers your risk. life cover safe investement, and upon maturity benfit too.

          If a 30 year person takes only term for 30 years. He has to die at the age of 30 to get the benefits.
          PPFs are good and can supported with endowment policies and Term Insurance (which is very cheap in premium) which covers your family for a limited number of years.

          PS: I AM NOT A LIC AGENT.
          I am an individual and have those lic endowment plans with term insurances.


      3. vikas says:

        please send me the options as i am also trapped in the same situaion

  224. Manish Chauhan says:


    Religare Aegon is new one but its not a unknown name in World market . One of the things you can do is Break your insurance into 2 policies . One in LIC and other in SBI or Aegon Religare . This will have two advantages :

    1. It will diversify the risk .
    2. It can help you later when you want to decrease your insurance cover , in which case you can just stop on of the policies . If you take just 1 policy you will have to stop it later and take new one , which will be costly at that time because of high age factor .

    So better go for 2 policies in different company .

    – Manish

  225. Anonymous says:

    I liked what is read about “Aegon Religare Life Insurace”, but as its a new venture a bit hesistant. Also really like SBI shield so will compare LIC and SBI and will make a decision.

    Thanks again Mainsh

  226. Manish Chauhan says:


    Jeevan Amulya is a good term insurance policy , the biggest advantage is that its from LIC which is most trusted and respected and i would also say “safe” Insurance company . The claim rate is the best . so incase of any cliam , its almost sure that it will be paid .

    Other Insurance companies you can look at are SBI life Insurance and a new one called “Aegon Religare Life Insurace” . as far as i know they are one of the cheapest in market .



    1. abhishek singh says:

      what an eye opener just remember to die before maturity date to get the benefits…

  227. Anonymous says:

    Can you please suggest an LIC term assurance policy.

    I read about Anmol Jeevan and Amulya Jeevan. It looks good to me.
    But just wanted your view on it

    Nitin Pillai

  228. Anonymous says:

    This is an eye opener, I must have read this for 3 times for me to believe it. I am paying 150000 on an endowment policy and in my third year. I will definetely Q my LIC agent and ask him his reasoning. It is really helpful thanks a lot, please keep it coming you are doing really good for the society and you will be benefited by spreading such knowledge it gods own way.


Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

FREE Financial Health Checkup

Take up a detailed 25 questions financial health checkup to find out how much you score out of 100?