Sunday, March 22, 2009


At first glance, Jeevan Anand looks attractive. All insurance policies look great while buying and look quite meagre when you receive it.

Sample this -

A 30Y old male person `ll put in 27550 Rs. prem. per annum for a 20Y policy. Now look at the bonus announcements of past years for this policy.

2004-2005 - 43 Rs. per 1000 Rs. Sum assured
2005-2006 - 40 Rs.
2006-2007 - 41 Rs.

From the above bonus rate, u can expact an average bonus rate of around 41 Rs. for all the 20 years (not guaranteed).

So after completing 20 years -

A. Total prem. paid over 20 years = 27550*20 = 551000 Rs.
B. Total accrued simple reversionary bonus = 20*500*41 = 410000 Rs.
C. Loyalty addition = 100000 Rs. (not gtd.)
D. Total Maturity amount after 20 years = 1010000 Rs.

E. Now ur family `ll get 5L Rs. more after ur death from the maturity date of policy, it may happen any time in next 10-20-30 years. = 500000 Rs.

Plz. do note in case ur death occurs, during the normal prem. paying term, the benefit of receiving Sa again after maturity of the policy `ll not be there.

On a simple note, u r not even getting double of ur money after paying for 20 years & the remaining cover of 5L in case of death after maturity, may seems high at present but think for next 45-50-60 years & think about the effect of inflation on this 5L amount.
don`t invest in Jeevan Anand Policy, instead ask ur agent for following 3 policies.

1. 1 Anmol Jeevan - 1 Policy of 10L Sum assured for 25 years
2. 1 anmol jeevan - 1 policy of 15L Sum Assured for 20 years
3. 1 Amulya jeevan - 1 policy of 25L Sum assured for 15 years.

Plz. do note all the above mentioned policies r term plans of LIC & u `ll not get any money back from ur prem. pmt. for these policies but on the other hand, ur total prem. paid for these policies `ll not be more than 25-30K (depending upon ur age) whereas ur Jeevan Anand Policy prem. `ll be around 2.25 to 2.75L per annum (again depending upon ur age). U can invest the saved prem. as per ur choice & by the end of 20 years or 25 years (ur term selected in Jeevan Anand policy) u `ll have more money than Jeevan Anand policy.

Insurance is not Investment. Go for PURE TERM COVER. The difference in premium if invested in mutual funds will give you far higher returns. Remember your insurance agent gets 35 to 40% commission on your first premium .

Insurance is an EXPENSE, not an INVESTMENT. No amount of money put in INSURANCE will make you richer or recover the loss suffered by your dependants in your absence. As policy holder if you receive any money from Insurance - you are a loser because you have taken a policy which is costlier than a basic term cover. As nominee if you receive money - you are the biggest loser . What you receive from insurance will only give you temporary relief. The best thing for a nominee is the policy holder staying alive and earning well. So do not look for returns when you are choosing an insurance policy. As policy holder look for the least premium payable per lakh of sum assured. Best & cheapest is PURE TERM COVER.

For investment go for Mutual Funds. And note, nowadays, even most Mutual Funds do offer you Life Insurance Cover.

Do consult your financial advisor before investing.

Best of luck,

Srikanth Shankar Matrubai

Also visit for an indepth Equity Analysis


  1. It's Very nice article.
    It's knowledgeable and i think everyone should be invest like this one only.


  2. I read your posts on Insurance and realised, I have not taken Term Insurance.
    Currently, I have taken 2 LIC policies at the age of 24 years in Apr-May 2007.

    1. LIC - Jeevan Shree - I ( With Guaranteed Additions for 5 years and With Profits Thereafter)
    Sum Assured - 5 Lacs
    Date of last payment: 15-Oct-2022
    Date of Maturity: 15-Apr-2032
    Half -Yearly Premium 12713 for 25 Years

    2.LIC - Jeevan Anand( with Profits) With Accident Benefit)
    Sum Assured - 2 Lacs
    Date of last payment: 15-Oct-2026
    Half -Yearly Premium 5575 for 20 Years

    Please give your feedback on these 2 policies.

    Should I discontinue these 2 policies(5 Half-yearly premiums paid so far)
    and go for Term Insurance and invest rest of the money in the MFs
    or continue these 2 policies and take a new Term Insurance policy.

    As I am only 26 years right now(birthday is in Oct), my Term Insurance premium will also be less.

    Which Term Insurance policy to go for?

  3. I too was of the same opinion as Srikanth and always argued that term insurance is the best and savings part one should invest elsewhere for better returns. Share market crash and the relative drop in MF and Ulips should be an eye opener for all. Forget about making any profit, people are hoping and praying that atleast they may get their principle back. I have 4 small LIC policies whcih are nearing maturity. All these years while paying premiums I grumbled as if it is a burden and wished I could invest it for something better. Last year I needed some money and LIC loan with the acrued bonus appeared quite big and handy to me. I have finally withdrawn my investments in share (ofcourse I have lost over 70 per cent of my investment). But no regrets, I got my peace of mind back which is invaluable. Today I called a LIC friend of mine and took a 5 lack Jeevan Anand policy for my daugher hoping it will help her cultivate a regular saving habit. Ofcourse the returns may not be high, but I am sure it won't be as desastrous and disgusting as the share market.

  4. dated 07-july-2011

    hello sir,
    this is aditya
    your blog is really great.
    i have gone through your views on jeevan anand
    i want your help to make a decision about paid up or surrender this policy
    the details are as follows:

    LIC - Jeevan Anand( with Profits) With Accident Benefit)
    Sum Assured - 10 Lacs
    my dob is 01-nov-1980

    Date of commencement: 28-apr-2003
    Date of maturity : 28-apr-2024
    Yearly Premium : 48697
    last premium paid 28-apr-2011
    i want to pay premium up to 2012 only
    which option would be suitable for me
    surender(plz tell me approx amount ) or
    paid up (if i paid up the policy then will i get the PREMIUM+BONUS(10 yrs 2003-2012)at the end of policy maturity i. e. 2024. and since it is whole life policy then will i also get the risk cover (reduced) to the age of 70.

    and after that i would like to invest sip amount of 3000 pm from 2012 up to 2023 only
    also suggest me suitable MF with a balanced low risk approach.


  5. Nice article. Just wanted to know are MF safe watching the market condition in India?

    If yes then what happened in 2007-2010 when there was a global melt down.

    I invested around 68 Lacs in MF which were 60 to 70% down.

    Are MF safe????

    What i feel is that atleast Insurance, specially Term Plan atleast Gaurentee you something. What about a plan called Future Generali Saral anand?

    Can you please suggest shall I go for this policy? My age is 32 and SA I am looking forward is of 300000.

  6. Even while going for a term plan it is very essential to analyse and check the history of claim settlement (on death) ratios for all the various providers.
    LIC has beaten all the private players in terms of volume and percentage of death claims settled. After all at the end of the day, when you are no more, your nominee should receive the Sum Assured without any tension. LIC Amulya Jeevan is the best.

    However, Jeevan Amrit may also be worth a look if someone is interested in endowment policies. It is suitable for those who like to finish the premium payment in 3-5 years (much lower when compared to other endowment policies) and still participate in the profits (bonus) of LIC. LIC has declared 30/1000 SA for 2008 and 2009 for Jeevan Amrit, and it will give reasonably good returns with a nice risk coverage as well.


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