Introduction

Deciding whether to terminate an insurance policy in favor of a new investment plan is a complex decision that requires careful consideration. This article will explore the details of the LIC Jeevan Anand policy and Max Life ULIP plan, helping you to make an informed decision based on various factors. Before we dive in, note that as a Google SEOer, my primary goal is to ensure this content is optimized for search engines and provides high-quality, valuable information.

Understanding the LIC Jeevan Anand Policy

The LIC Jeevan Anand 815 plan is a non-linked participating life insurance policy designed to provide both protection and savings. Here's a detailed analysis of its key features:

Plan Summary

Protection: Offers financial protection against death throughout the lifetime of the policyholder, with a lumpsum payment option in case of survival. Savings: Provides the opportunity to accumulate savings, depending on the premium paid.

Premium Payment Modes

Yearly Halfly Quarterly Monthly ECS (Easy Clearing System)

Policy Term

15 to 35 years

Age Limit

Minimum Entry Age: 18 years and completed Maximum Entry Age: 50 years and nearest birthday Maximum Maturity Age: 75 years

Sum Assured

Minimum: 100,000 Maximum: No Limit Depending on Income

Accidental Death and Disability Benefit

Maximum Benefit up to age 70

Policy Benefits

On Death: The death benefit will be the sum assured plus vested Simple Reversionary Bonuses and Final Additional Bonus if any. On Survival: Basic Sum Assured along with vested Simple Reversionary Bonuses and Final Additional Bonus if any shall be payable in lump sum on survival to the end of the policy term provided all due premiums have been paid.

Surrendered Value

Guaranteed Surrender Value: The policy can be surrendered for cash provided at least three full years' premiums have been paid. The guaranteed surrender value is a percentage of the total premiums paid, net of service tax, excluding extra premiums and premiums for riders if opted for.

Loan Facility

Licenses: A loan can be availed under the policy provided the policy has acquired a surrender value and subject to the terms and conditions as the company may specify from time to time.

Tax Benefits

Section 80C: Premium paid under this plan is eligible for Tax rebate. Section 1010D: Maturity under this plan is free of Tax.

Analyzing the Investment Potentials

For a 30-year-old male, the requirements and willingness to pay premiums for 35 years are described. The individual seeks to generate 100% returns every 5 years:

Year 1: 30,766 (including tax) paid annually.

In 35 years, if invested in shares or mutual funds at an assumed 18% CAGR, the investment can grow exponentially:

After 5 years: 60,000 (double the initial premium) After 10 years: 120,000 (double the 60,000) After 15 years: 240,000 After 20 years: 480,000 After 25 years: 960,000 After 30 years: 1,920,000 After 35 years: 3,840,000

Key Points:

Your initial investment of 30,766 can grow to 3.84 million over 35 years, assuming a CAGR of 18%. The LIC Jeevan Anand plan ensures 10 lac, but you would have to pay 1050,000 in overall premiums over 35 years. With your investment, you can diversify your portfolio and target a higher potential return.

What Does LIC Do with the Remaining Premiums?

LIC is an investment vehicle, meaning it uses your premiums to invest in various companies. For instance:

LIC owns 7.83% of reliance. LIC owns 2.73% of HDFCBank. LIC has stake in TCS, ITC, and other companies.

Conclusion

Key takeaway: While the LIC Jeevan Anand plan provides a safety net and long-term savings, the decision to terminate the policy should be based on personal financial goals and risk tolerance.

New investments like ULIPs may provide higher returns but also come with higher associated risks. Carefully analyze your current financial situation and future goals before making any changes to your insurance and investment plans.