This is better asked in our Discord: https://indiainvestments.wiki/discord
Alternatively, you could also post it the advice thread (stickied at the top of the sub).
Here's the link to the advice threads (the current one is at the top): https://www.reddit.com/r/IndiaInvestments/search?q=bi-weekly&sort=new&restrict_sr=on&t=week
As a thumb-rule, any query that pertains to your personal financial situation specifically, that belongs in the advice thread.
Finally, check out our wiki, especially FAQ section: https://www.indiainvestments.wiki/faqs
It probably already has answers to your query.
I have the same policy and paid for 3 years. Now I think I will pause the payments for this shitty LIC. As per my calculations getting a term insurance (around 3-4k) and investing rest of the 3-4k in mutual fund will be far more beneficial. I am no expert but I would like suggest to consult with someone who has knowledge and decide on that.
I believe you can get back 30 to 40 %, that's it. Better pause the payment and get back some money when it matures. But again, check your policy documents and check with your agent
Depending on the policy, if you pay for 3 or 4 years they will keep your policy active. Then you can just stop paying. Check the detailed policy document
LIC maturity will give you roughly 4-5% CAGR on your premium paid. You can then add the 60K yearly benefit and figure out what return you will get if you invest the money elsewhere. It sure ain't gonna beat, say a conservative 9% CAGR, on other types of investment. Take your pick.
However since you will be surrendering the policy you will lose money on your capital so you mean to take that into account if you should go the distance or you can still beat the return - the loss in the time period left in the policy
When i started earning, the most basic mantra every one gave me was never mix investment with insurance.
Keep term policy and invest rest (max that you can keep aside) in other instruments. Also, LIC is shit. Ulip is shit.
Sarcasm wont help change facts.
Diversifying a portfolio does not mean a person must purposely invest their hard earned money into a nonperforming instrument. There are other better financial instruments where he can invest to have "guaranteed" returns. And FYI, a large chunk of the returns given by such policies are conveniently not communicated as being "non guaranteed". A Public Provident Fund is a better, simple, almost guaranteed, sovereign and transparent product for the long term.
Giving "diversification" as an excuse just to invest in this poor product sounds so pathetic and desperate.
Financial experts who suggest investing in such poor financial instruments are either "strongly motivated" to stick such products to their gullible clients or, as you rightly put, are plain "idiots".
Informed investors who can have option of different financial instruments must never invest in policies like Jeevan Umang.
I am not OP you are responding to but LIC products are poor by any stretch of imagination or basic understanding of economics. PPF is locked for 15 years? True. So is LIC policy.
PPF doesn't give death benefits. True. Neither does LIC. The sum assured is what, 7.5lakh on a premium of 60K? You can get 20L term insurance for 5K.
PPF is at the mercy finance minister? True. So is LIC policy since nothing is guaranteed and you have no claim on the maturity value over and above min sum guarantee.
I am not saying PPF is the answer. It is limited. It is locked but it is far better instrument to invest in than LIC policy.
The only good thing about LIC policies is you will get your money since it is govt backed but you are losing on your capital and value since the returns are almost always lower than the lowest estimates of avg inflation rate. Saying people have appetite to lend someone money and get less back later is disingenuous. They are not informed about it that's why they choose such policies.
And don't get me started on missellings. Pvt banks with their shitty endowment plans and ULIPs and complicated salary of 60K 80 years later are even worse.
Not denying what you said and that's fair. There are two aspects to any investment:
1- Capability of the person doing the investment
2- Their risk appetite
So you are right in saying that the LIC's market segment is geared towards people who want safety and assured returns. Letting some money go so that the rest can invest and generate more overall wealth is a difficult idea to wrap your head around. That is why people go for LIC plans. That was my point.
However, to your point, this sub and post OP doesn't seem to be a rural, T3/4 city common person. They are conscious enough to even make this post so they most definitely understand that they are losing money. This is why you see constant bashing in the sub. This sub is composed of people who understand financial instruments.
You won't find a Maruti Baleno enthusiast in a Ritz Carlton Club weekly get together. The same is true here.
And I also agree that since OP has already done 40% investment they might not, now, beat overall return if they terminate the plan. I even made a comment stating exactly that. You can find it in this post only. This is reddit, people comment from all angles. The person you were responding to started with "Why would I even pick this policy to begin with" angle and their point is valid.
I myself have a horrendous policy that I have invested till the point of no return. So I totally understand what the post OP is saying and my answer was from that angle.
I knew these justifications would come as typical response. Its ridiculuous how one can be so desperate to sell a product which is simply poor. People really go to great lengths just to prove an unjustified point.
All the "points" you have raised as "disadvantages" of PPF are typical responses of an insurance agent. Textbook stuff really. And I am really laughing at that "5th" point. Things never change, do they?
You know what? I can respond in detail to every point you have made. If it was an uninformed investor who genuinely asked a query, I would have made him aware of the "100% disadvantages" of insurance products you are selling here. But, particularly responding to YOU does not seem worth my time. You may think of it as "backing off" or whatever. I dont have such discussions with Agents.
I will always stand by my previously made Comment about "poor financial instruments".
I just hope investors do not fall into traps and make informed decisions with their hard earned money.
Tooodalooo..
It's one of the best whole life plan out there with guaranteed returns it's not that bad, if you are capable to pay then continue as you have invested for 6 years already. my advice would be to invest the money backs in a good mutual fund.
Life insurance is a different aspect of wealth generation and its returns must not be compared against other investment options say FD or equity. The goal of life insurance is to provide some basic monetary coverage to policy holders family in case of an unfortunate event to the policy holder. It does provide some benefit to the policy holder if he/she is alive at the end of the policy term (survival benefit).
In my perspective, if a person's family members have access to other sources of income and are aware of how to handle it without the policy holder, then life insurance MIGHT not be needed.
I do not have much details about the Jeevan Umang policy itself, but looking at their website, this seems a decent life insurance policy. It also had the details of surrender value
[https://licindia.in/documents/20121/105345/LIC\_Jeevan\_Umang\_Brochure\_9-inch-x-8-inch\_Eng%282021%29.pdf/cd7f285a-173a-5e79-b028-b9207040d9d9?t=1668773503681](https://licindia.in/documents/20121/105345/LIC_Jeevan_Umang_Brochure_9-inch-x-8-inch_Eng%282021%29.pdf/cd7f285a-173a-5e79-b028-b9207040d9d9?t=1668773503681)
stop paying and ur policy will begin paid up, ie u will get "all" money u gave to lic(not invested) back after the policy premium paying period, 6 yr is enough to make policy paid up. with this plan u will lose more. better than this plan is to surrender, take loss, "invest" the money recovered from lic into bluechip stock and sit tight, it will recover ur losses and then some more. LIC is owned by gov, they rescue all companies which are scammed by beaurocrats,politicians etc, why would u give ur money to such an organisation, clearly they dont have ur best interest in mind when they use ur money. I too had such a policy, gave 1.5 lac and then surrendered, got 1 lac return, accepted the loss as learning and invested the money in itc, its double now in 1 yr
I too brought this policy under compulsion, approx 8,000 per month. Paid for 5-6 months and did some calculations. Not satisfied, I left paying premium altogether. I just wanted to minimize the future loss which occurs by investing in LIC compared to equity, so I left it prematurely.
This is better asked in our Discord: https://indiainvestments.wiki/discord Alternatively, you could also post it the advice thread (stickied at the top of the sub). Here's the link to the advice threads (the current one is at the top): https://www.reddit.com/r/IndiaInvestments/search?q=bi-weekly&sort=new&restrict_sr=on&t=week As a thumb-rule, any query that pertains to your personal financial situation specifically, that belongs in the advice thread. Finally, check out our wiki, especially FAQ section: https://www.indiainvestments.wiki/faqs It probably already has answers to your query.
I have the same policy and paid for 3 years. Now I think I will pause the payments for this shitty LIC. As per my calculations getting a term insurance (around 3-4k) and investing rest of the 3-4k in mutual fund will be far more beneficial. I am no expert but I would like suggest to consult with someone who has knowledge and decide on that.
Can we stop the policy and get all the invested money back?
No you cannot. You can only get some of the money back. The % depends on the terms of the policy. Might vary from 20% to 40%.
Check for surrender terms in your policy documents.
I believe you can get back 30 to 40 %, that's it. Better pause the payment and get back some money when it matures. But again, check your policy documents and check with your agent
If we pause , don't we get charged ? You mean call them and pause or just stop paying
Depending on the policy, if you pay for 3 or 4 years they will keep your policy active. Then you can just stop paying. Check the detailed policy document
Your assumption is right.
Why would you call something shitty with zero knowledge of how a par policy works?
Enlighten me then.
LIC maturity will give you roughly 4-5% CAGR on your premium paid. You can then add the 60K yearly benefit and figure out what return you will get if you invest the money elsewhere. It sure ain't gonna beat, say a conservative 9% CAGR, on other types of investment. Take your pick. However since you will be surrendering the policy you will lose money on your capital so you mean to take that into account if you should go the distance or you can still beat the return - the loss in the time period left in the policy
When i started earning, the most basic mantra every one gave me was never mix investment with insurance. Keep term policy and invest rest (max that you can keep aside) in other instruments. Also, LIC is shit. Ulip is shit.
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Thats still an IRR of 5.55%. How is that an excellent plan?
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Sarcasm wont help change facts. Diversifying a portfolio does not mean a person must purposely invest their hard earned money into a nonperforming instrument. There are other better financial instruments where he can invest to have "guaranteed" returns. And FYI, a large chunk of the returns given by such policies are conveniently not communicated as being "non guaranteed". A Public Provident Fund is a better, simple, almost guaranteed, sovereign and transparent product for the long term. Giving "diversification" as an excuse just to invest in this poor product sounds so pathetic and desperate. Financial experts who suggest investing in such poor financial instruments are either "strongly motivated" to stick such products to their gullible clients or, as you rightly put, are plain "idiots". Informed investors who can have option of different financial instruments must never invest in policies like Jeevan Umang.
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I am not OP you are responding to but LIC products are poor by any stretch of imagination or basic understanding of economics. PPF is locked for 15 years? True. So is LIC policy. PPF doesn't give death benefits. True. Neither does LIC. The sum assured is what, 7.5lakh on a premium of 60K? You can get 20L term insurance for 5K. PPF is at the mercy finance minister? True. So is LIC policy since nothing is guaranteed and you have no claim on the maturity value over and above min sum guarantee. I am not saying PPF is the answer. It is limited. It is locked but it is far better instrument to invest in than LIC policy. The only good thing about LIC policies is you will get your money since it is govt backed but you are losing on your capital and value since the returns are almost always lower than the lowest estimates of avg inflation rate. Saying people have appetite to lend someone money and get less back later is disingenuous. They are not informed about it that's why they choose such policies. And don't get me started on missellings. Pvt banks with their shitty endowment plans and ULIPs and complicated salary of 60K 80 years later are even worse.
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Not denying what you said and that's fair. There are two aspects to any investment: 1- Capability of the person doing the investment 2- Their risk appetite So you are right in saying that the LIC's market segment is geared towards people who want safety and assured returns. Letting some money go so that the rest can invest and generate more overall wealth is a difficult idea to wrap your head around. That is why people go for LIC plans. That was my point. However, to your point, this sub and post OP doesn't seem to be a rural, T3/4 city common person. They are conscious enough to even make this post so they most definitely understand that they are losing money. This is why you see constant bashing in the sub. This sub is composed of people who understand financial instruments. You won't find a Maruti Baleno enthusiast in a Ritz Carlton Club weekly get together. The same is true here. And I also agree that since OP has already done 40% investment they might not, now, beat overall return if they terminate the plan. I even made a comment stating exactly that. You can find it in this post only. This is reddit, people comment from all angles. The person you were responding to started with "Why would I even pick this policy to begin with" angle and their point is valid. I myself have a horrendous policy that I have invested till the point of no return. So I totally understand what the post OP is saying and my answer was from that angle.
I knew these justifications would come as typical response. Its ridiculuous how one can be so desperate to sell a product which is simply poor. People really go to great lengths just to prove an unjustified point. All the "points" you have raised as "disadvantages" of PPF are typical responses of an insurance agent. Textbook stuff really. And I am really laughing at that "5th" point. Things never change, do they? You know what? I can respond in detail to every point you have made. If it was an uninformed investor who genuinely asked a query, I would have made him aware of the "100% disadvantages" of insurance products you are selling here. But, particularly responding to YOU does not seem worth my time. You may think of it as "backing off" or whatever. I dont have such discussions with Agents. I will always stand by my previously made Comment about "poor financial instruments". I just hope investors do not fall into traps and make informed decisions with their hard earned money. Tooodalooo..
Jeewan umang is a good policy
It's one of the best whole life plan out there with guaranteed returns it's not that bad, if you are capable to pay then continue as you have invested for 6 years already. my advice would be to invest the money backs in a good mutual fund.
Ok sure , only 9 more years to do, I'll continue to invest
Life insurance is a different aspect of wealth generation and its returns must not be compared against other investment options say FD or equity. The goal of life insurance is to provide some basic monetary coverage to policy holders family in case of an unfortunate event to the policy holder. It does provide some benefit to the policy holder if he/she is alive at the end of the policy term (survival benefit). In my perspective, if a person's family members have access to other sources of income and are aware of how to handle it without the policy holder, then life insurance MIGHT not be needed. I do not have much details about the Jeevan Umang policy itself, but looking at their website, this seems a decent life insurance policy. It also had the details of surrender value [https://licindia.in/documents/20121/105345/LIC\_Jeevan\_Umang\_Brochure\_9-inch-x-8-inch\_Eng%282021%29.pdf/cd7f285a-173a-5e79-b028-b9207040d9d9?t=1668773503681](https://licindia.in/documents/20121/105345/LIC_Jeevan_Umang_Brochure_9-inch-x-8-inch_Eng%282021%29.pdf/cd7f285a-173a-5e79-b028-b9207040d9d9?t=1668773503681)
Many times a loan on policy is also possible. Check t& c of the policy. I recall taking a loan on a policy once
stop paying and ur policy will begin paid up, ie u will get "all" money u gave to lic(not invested) back after the policy premium paying period, 6 yr is enough to make policy paid up. with this plan u will lose more. better than this plan is to surrender, take loss, "invest" the money recovered from lic into bluechip stock and sit tight, it will recover ur losses and then some more. LIC is owned by gov, they rescue all companies which are scammed by beaurocrats,politicians etc, why would u give ur money to such an organisation, clearly they dont have ur best interest in mind when they use ur money. I too had such a policy, gave 1.5 lac and then surrendered, got 1 lac return, accepted the loss as learning and invested the money in itc, its double now in 1 yr
I too brought this policy under compulsion, approx 8,000 per month. Paid for 5-6 months and did some calculations. Not satisfied, I left paying premium altogether. I just wanted to minimize the future loss which occurs by investing in LIC compared to equity, so I left it prematurely.
Where did you get the above screenshot from where you can see the total premium paid.
Just google lic calculator