Any advantage of Investing money in LIC policy

[R2K]

One of my relative is nagging me to take a LIC investment policy. I'm in my 20s and he said it will be really beneficial considering my premium amount will be considerably less compared to people in age group of 30s and 40s.

I'm a noob when it comes to investment. I basically only save and invest money in Bank Fixed deposits which offers around 9 % to 9.5% compound interest annually. I have not much details about the LIC plans but he did mention about investing it for upto 15 years or something.

So any of you guys have any tips about the cons and pros of investing money in LIC plans.
Is there any advantage of these LIC thing over Fixed Savings Bank deposits ?

 

[beingGamer]

It's a regular way of finding customers for LIC agents.. Of curse because they get profit for any new member registering for LIC policy.
LIC policies are basically the amount you invested which your family will get in case of your death.
I am not sure how beneficial it is, but you might think to invest in it if you are very concerned about your family members after in case of your death.

It's the LIC agent's policy to nag you till you get frustrated and register for one of the policies.
I have 2 relatives and a ex-colleague who nagged me for much of the time, i just said I am not interested as of yet, if i will be i will contact you by myself. since then its peace from their side

(correct me if i have mistaken anything in my first para)

 

[R2K]

It's a regular way of finding customers for LIC agents.. Of curse because they get profit for any new member registering for LIC policy.
LIC policies are basically the amount you invested which your family will get in case of your death.
I am not sure how beneficial it is, but you might think to invest in it if you are very concerned about your family members after in case of your death.

It's the LIC agent's policy to nag you till you get frustrated and register for one of the policies.
I have 2 relatives and a ex-colleague who nagged me for much of the time, i just said I am not interested as of yet, if i will be i will contact you by myself. since then its peace from their side

(correct me if i have mistaken anything in my first para)

I googled about this and most of them explains it same as you did.
I would just say that I'm not interested but this person is my Uncle . He even made my dad to join and he literally has no idea other than the amount he paying for it.

 

[beingGamer]

Yes, you are his relative and they try to emotionally blackmail you
my both relatives are my cousins. one is small cousin sister & other one is elder cousin brother.
the cousin brother even harasses(izzat utarna) the investor to make him do the investment
he asks like what is your salary, dont you care about your family? why cant you make a small investment per month for your family? etc etc..

Just stand to your decision whatever they say, if of curse you dont want to invest in it.

 

[anirbandd]

actually its a very good way to invest in long term.

plus you get exemption from taxes invested in LIC..

when you get the amount after a long period, it will be a huge amount. i do believe in it, and im not an LIC agent

 

[Gen.Libeb]

One of my relative is nagging me to take a LIC investment policy. I'm in my 20s and he said it will be really beneficial considering my premium amount will be considerably less compared to people in age group of 30s and 40s.

I'm a noob when it comes to investment. I basically only save and invest money in Bank Fixed deposits which offers around 9 % to 9.5% compound interest annually. I have not much details about the LIC plans but he did mention about investing it for upto 15 years or something.

So any of you guys have any tips about the cons and pros of investing money in LIC plans.
Is there any advantage of these LIC thing over Fixed Savings Bank deposits ?

If you don't have any LIC policy & just Fixed Deposits then I think its a good way to invest the money as you won't have to pay tax on it (upto 100000).

Anyways after 15 years (or whatever period the policy is) you'll get the invested money back (or more money to your family in case of your death).
The bad thing is unlike Fixed Deposits
- your money is locked for those 15 years & you can't get it back even if you need it.
- you have to keep paying that premium amount every every year/month, so you have to plan that acc to your income/expenditure. (Not sure what happens if you skip one time)

I'd recommend before saving to Fixed Deposits, save to a PPF account as that has tax exemption upto 100000 I think. After that any you save you can save it to regular Fixed Deposits.

 

[beingGamer]

If you don't have any LIC policy & just Fixed Deposits then I think its a good way to invest the money as you won't have to pay tax on it (upto 100000).

Anyways after 15 years (or whatever period the policy is) you'll get the invested money back (or more money to your family in case of your death).
The bad thing is unlike Fixed Deposits
- your money is locked for those 15 years & you can't get it back even if you need it.
- you have to keep paying that premium amount every every year/month, so you have to plan that acc to your income/expenditure. (Not sure what happens if you skip one time)

I'd recommend before saving to Fixed Deposits, save to a PPF account as that has tax exemption upto 100000 I think. After that any you save you can save it to regular Fixed Deposits.

Are you sure you get money after 15 years in LIC? it's PPF i think, not LIC.

and PPF amount is increased to 1.5 lakh from 1 lakh now.

 

[Vyom]

One of my relative is nagging me to take a LIC investment policy. I'm in my 20s and he said it will be really beneficial considering my premium amount will be considerably less compared to people in age group of 30s and 40s.

I'm a noob when it comes to investment. I basically only save and invest money in Bank Fixed deposits which offers around 9 % to 9.5% compound interest annually. I have not much details about the LIC plans but he did mention about investing it for upto 15 years or something.

So any of you guys have any tips about the cons and pros of investing money in LIC plans.
Is there any advantage of these LIC thing over Fixed Savings Bank deposits ?

Everyone must have atleast one policy that ensures your family get some amount in case something happens to you. I think this should be mandatory by the government for everyone who earns.
Anyway, so I am guessing you are not working yet, else you would have come to realize the need for insurance from somewhere. When you get employment the company automatically insures you for a fixed amount, but that is health insurance. Not sure whether death benefit is included in it. So atleast one LIC policy is a must. I known my TL have multiple LIC policies. Big and small. My dad have multiple too. I have two of them. I pay around Rs 2100 yearly for one policy.

Also, more important then having a policy is making sure your family knows that you have one. Lots of people don't claim the insurance money since they are just not aware that their family member (who passed away) had an insurance.

Besides an LIC policy, one must also have an accidental policy and an health policy. There are many renowned companies who provide good accidental policy. Where you pay a small amount per year (depending on your age, and health and whether you smoke or drink). Which is valid for a period you specify. During this period if you happen to be in any accident that affected any of your body parts you get good amount of money. One finger got chopped of? You get money in lakhs. One hand badly affected in the accident? You get multiple lakhs. But if nothing happens to you for the period, you get *nothing*. Zero. Now it may seem that this is very bad policy where you get nothing, but actually that's why the premium each year is very low, but it also pays a lot if god forbid, anything happens to you. It makes sense to invest in accidental and health policy while you are in your 20s, since as age increases so does the premium.

I myself have to take an accidental policy and health policy. I will do further research before getting any. Though, in LIC policy you loose nothing in the long run.

 

[Gen.Libeb]

Are you sure you get money after 15 years in LIC? it's PPF i think, not LIC.
and PPF amount is increased to 1.5 lakh from 1 lakh now.

Of course in PPF you get all your money back.
With my LIC policy will get all money back after the period. Someone I know has a LIC where they get a part of the money and instead they get a certain small amount every month (like a pension) , Now if they live longer this one turns out to be better than getting all money together. Please make sure to get more details from the person if and before you get the policy

 

[ithehappy]

If you really wanna make the maximum out of your investment then invest in stock market.
I have loads of LIC by the way, I find most of the policies better for old aged people.

 

[sling-shot]

The ones most beneficial to the LIC agent are probably endowment plans. These are the plans where you pay a fixed amount for a fixed duration and get back the money with some bonus. Generally the returns are very bad compared to other investment options.

There are pure life policies where you only need to pay a small amount per year to get a high cover but won't get any money back.

 

[Zangetsu]

[MENTION=51849]R2K[/MENTION]: LIC policy is a must for every citizen
Reason: because we are not immortals

and as u r in 20's so u have a good time to invest in long term plan (invest some but do invest)
u won't understand the power of LIC now...but after maturity u will for sure and will advise everyone to do the same

 

[$hadow]

You should totally get one since it is important. The earlier you can invest the earlier you will get the money. Plus in thus year budget the finance minister has also increased the amount exempted to 1.5 lac so invest in it to get your money saved.

 

[R2K]

This thread had so many replies and I didn't even notice. So bumping
I just want to see maximum returns on my saved money or investment and LIC policy doesn't really seem to give as much as the FD interests offered by most banks after the mentioned time frame. I don't really care about money that comes after I'm dead as its one of the reasons (other than retirement life )I'm actually saving the money in the first place, so that my dependents don't have worry about money.

 

[Zangetsu]

This thread had so many replies and I didn't even notice. So bumping
I just want to see maximum returns on my saved money or investment and LIC policy doesn't really seem to give as much as the FD interests offered by most banks after the mentioned time frame. I don't really care about money that comes after I'm dead as its one of the reasons (other than retirement life )I'm actually saving the money in the first place, so that my dependents don't have worry about money.

checkout LIC's pension plans as it has major benefits over FD

 

[Vyom]

Between my last reply and current status, I now have greater understanding about the worthiness of LIC policies. I now believe Mutual Funds are a way more wise decision if you want money to invest.

More on this later.

 

[R2K]

checkout LIC's pension plans as it has major benefits over FD

Min age is 30 for that. And could you explain how exactly is it better ?

- - - Updated - - -

Between my last reply and current status, I now have greater understanding about the worthiness of LIC policies. I now believe Mutual Funds are a way more wise decision if you want money to invest.

More on this later.

Please do provide more info

 

[Zangetsu]

Min age is 30 for that. And could you explain how exactly is it better ?

FD will have Tax deduction
and LIC is Tax Free

LIC is long term and FD has to be renewed after some years

LIC pension plan has maturity date but will give you benefits even after the maturity dates (e.g: Jeevan Anand Policy)

FD is over after maturity date

and better Accidental Insurance in LIC....
FD has no accidental insurance I guess (check with the bank)

 

[deb007]

It depends up on what is your need and perception. If you are really interested to get a good return form your investment, then why to invest in an insurance policy? I have reviewed many lic policies in my blog and all of them are failed to beat the inflation in long term. You can have a look at the review of their latest Jeevan tarun policy here LIC’s Jeevan Labh Plan Review - Is It Best Tax Saving Option In India? - MoneyGyaa