LIC Policy – Worth taking?

POSTED BY Rishi Bhatia ON July 15, 2013 10:52 am COMMENTS (8)

Hi, I have got a mail from one of the agents, who is selling the following policy.
Invest with LIC: Rs 2042/-every month till 15 year and get Rs 8,88,792.00 at maturity.
Basic insurance cover – Rs 5,00000.00
Accidental insurance cover – Rs 10,00000.00
Avail tax benefit US 80 C
Tax Free Returns u/s 10(10)D

From the first look, it looks good to me. What are your suggestions (Assuming, these returns are guaranteed, and this is the only detail that I have as of now).

PS – I have requested more details from the agent, like the type of policy etc. Will post here once I have more details.

8 replies on this article “LIC Policy – Worth taking?”

  1. Dear Rishi, thanks you picked the point. 🙂



  2. Dear Rishi, do not listen to anybody. This ios the best product for the Family of ………………..




    Whose family are you thinking here? it’s not your family my dear friend. It’s your agent’s family who ‘ll reap the reward of this policy in the form of commission earning. We (Manish, Ramesh, Ashal, Pattu, Kirti…..) all are useless & meaningless fellows who know nothing about LIC & it’s tricks. This is a must purchase for you. Please purchase it right now. This is the GOD (your LIC agent) sent gift for you. Grab it with both hands. Any delay ‘ll prove costly to your agent’s financial well being.

    Should I say more or Idea is clear to you. 🙂



    1. Rishi Bhatia says:

      Haha. This is by far the best response I have received.
      I understand that there might have been some hidden things as soon as I had got a mail from that agent, and wanted to cross check if such policy really exists. From the answers I think this looks to good to be true, and raises a flag.

      I have not yet got any details from that agent after mailing him twice, so this confirms my doubts!!!

  3. bemoneyaware says:

    Try to Answer the question – do I need the life insurance policy?
    It is important for you to know answers to a few crucial questions before buying an insurance policy.

    Ask yourself what it is you want the insurance to do. For example, do you want to have coverage that will:

    Pay the outstanding balance owing on a mortgage and other debts?
    Offset the loss of your income? For how long?
    Contribute to the future education of your children?
    A combination of all or part of the above?

    How long will you need life insurance?
    Do you understand the plan? : Before you purchase an insurance plan, be very clear about the benefits it offers,its features such as the tenure, payouts, premium amount and surrender rules, and how it fits in with your needs.
    Lock-in period and Surrender Charges
    What are the exclusions? Enquire about the exclusions in the policy while buying it, and read the policy document in detail to have complete clarity. But there are some common exclusions to payout, such as suicide within a year of buying the policy, death during war, death due to drug abuse etc.
    Our article Checklist for buying life insurance discusses it in detail.

    Remember no one solution fits all!

  4. Rishi Bhatia says:

    Thanks Ramesh/ Manish.
    My first reaction was that of scam, but will wait for the agent to provide me further details of this policy. Even I think it would be better than a RD, considering the returns they are giving (assuming what is mentioned here is correct).

    1. Ramesh says:

      It cannot be correct.
      Even the accomodative IRDA allows for a fixed 6% and 10% CAGR data (with data of all other costs so as to arrive at a net projected rate of investment). So, anything beside that value is illegal.
      It is not even worth bothering about illegal projections, imo.

  5. If LIC can give it all in writing in your agreement with them , you can think about it considering the IRR is great !

  6. Ramesh says:

    1. Scam
    2. Actual returns of 10.4% CAGR. (2042 pm for 15 years > 8.8 lakhs).
    3. LIC does not guarantee results. Check their websites.
    4. Liquidity will always be an issue. You can never come out of it without incurring significant loss of principal (do not even think of returns). Check tonnes and tonnes of other queries on this forum itself.
    5. 80C tax benefits requires at least a 10x premium of insurance.

    in one word, NO.

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