LIC Jeevan Ankur (Plan 807) is introduced by the LIC on January 2012. The timing of the new policy is to attract the investments from the tax payers. Who are looking for the tax savings investments that too in middle class always prefer to think of buying an insurance policy is the good source for investments. Unfortunately, every companies including LIC would sell the policies by marketing gimmicks. By looking into the details of the Jeevan Ankur, it of one of the low returns policy offered by LIC and there is not clear objective why one should invest in the Jeevan Ankur.
In LIC’s words “Jeevan Ankur is a conventional with profit plan, specially designed to meet the educational and other needs of your child”. Some of the key points about the Jeevan Ankur:
- It is an endowment plan
- There is option of regular premium payment and Single Premium (one time)
- The life assured is the parent and not the child.
- There are riders ( Accidental and Critical Illness) associated with the basic policy.
- The maximum age of policy holder at maturity has to be 75 yrs.
- The maximum policy term is 25 minus age of the child.
- No loan facility will be available under this plan.
- Minimum and Maximum age of the policy holder at the time of taking the policy has to be between 18-50 yrs and minimum and maximum age of child has to be 0-17 yrs.
Death of the Policy Holder or Child
As mentioned in the above points, the life assured is the parents who are the policy holders. If there is unexpected death of the policy holder, sum assured will be payable immediately and 10% of the sum assured on each year till the policy maturity period. The premiums of the policy will be waived off by the company in case death of the policy holder happens before the maturity.
In case, the nominee of the policy (child) is died before the maturity, policy holder has the option to nominate another child and continue the policy. If there is no other child then, the benefits will continue and the maturity proceeds will go to legal heirs.
Illustration of LIC Ankur Jeevan
- Age at entry: 35 years
- Policy term: 25 years
- Mode of premium payment: Yearly
- Amount of annual premium: Rs.3587/-
- Sum Assured : Rs. 100,000 /-
Returns on Ankur Jeevan
The problem with most of the endowment plan is that it provides very less return compare to many other investment categories. Also insurance can never fight with the high inflation what we are seeing in our country. If you consider the inflation, the inflation in education sector is around 12-15%. Needless to say, how much we are spending for our kids in these days to get admission in the colleges. These huge expenses can not be matched with the returns offered by policies like Jeevan Ankur.
If you look into the above example, the final returns offered by the policy is less than the 5%. When comparing to the inflation, your investment would carry the negative value.
Our Rating
Don’t ever plan to buy Jeevan Ankur and it would surely will not satisfy your needs. If you are willing to invest for the tax savings, there are many other good policies and investment options available in the market. Fixed Deposit would give you more returns than this policy. Please share this with your friends if anyone planning to buy this policy.
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July 22, 2012 at 5:06 pm
Excellent Article Sir !!
Insurance Agents and Insurance Companies just want to capitalise on peoples emotions.
Whenever people ask, what investments they should do for their children, someone comes up with a so-called “Child Plan”. And just because the name is child plan, people ignore all the other negative factors it has.
You are doing a really good job by making people aware about this.
Regards
Prof. Bajaj
July 29, 2012 at 7:56 pm
Thank you for your comments
-krishna
July 29, 2012 at 12:07 pm
It is horrible to see such posts from people who do not know what insurance is for. insurance is not for investment sir, it is for life coverage. it is for people who love their family and want their children to study even if they are no longer on earth. Jeevan ankur gives ONE SA on life assured’s death and also gives 10% of sum assured to child every year till end of policy term. again the child gets another SA + bonus at end of policy year to the child. this can take care of the child’s edu expenses. moreover the payments are made over along term and not lumpsum as in bank investments. How then did the author get such terrible returns %. pls do not make such posts if u really dont know anything about insurance and may be prof? Bajaj is an agent of BAJAJ ALLIANCE!
July 29, 2012 at 7:55 pm
Hello sajit menon,
Have you read the complete article?
I am not recommending this policy. Return is very low.
Thanks,
Krishna
September 24, 2012 at 2:12 am
Hello Krishnas,
Please don’t misguide people by writing such reviews without understanding the policy well. My dear friend this policy is not for returns if you want returns then please invest in MF/Gold/equity. This policy is for your child’s future in case something happens to you and I guess you didn’t read Sajit’s comment properly. He is recommending the policy.
Thanks
September 24, 2012 at 10:35 am
I feel like laughing on the comments made by Mr. Sajit Menon !! He seems to unsolicitedly display his mental vacuum by making such comments.
Someone sharing a common name would be from that company ?? By that logic, you would say that Narendra Modi is MD of Modi Continental, and comedian Bharti is from Bharti Airtel ?? So much for your level of intellect ?? And just for your information, I have no relation with Bajaj Allianz and I have same opinion about the child plans from Bajaj Allianz as well (or from any insurance company, for that matter).
I am very much aware about insurance and if you want to have an idea, you may refer to my articles published at http://www.caclubindia.com/articles/why-is-insurance-mis-sold-in-india–12452.asp , http://www.caclubindia.com/articles/do-we-really-understand-the-meaning-of-risk–12671.asp .
The only sensible statement that I could see in your comments is, “Insurance is not for investment, it is for life coverage”. When you know this sir, you might also be knowing that one can get a good life risk coverage with a term plan that too at a small premium. So why one needs to go for a “Jeevan Ankur” or any such stupid child plan ?? The premium saved can safely be invested and earn much higher return. However, this would deprive the “mis-selling agents” from earning commissions. Thus, a resistance from them is expected.
I am sorry if my comments look offensive to you. But if you dont like them, you should also refrain from making personal remarks on anyone. Krishna is doing a good job by awakening people, and I fully support him.
September 26, 2012 at 5:48 am
Hi Balaj,
Thank you for the comment. Yes. The personal remark must be avoided while commenting on the blogs.
Thanks,
Krishna
March 6, 2013 at 10:32 pm
Basic mistake one which most of the people do is that they think LIC policy is investment. They mix up the Investment and Insurance. Basically if you see returns of the LIC policy they are very low as compare to the other investment plans. Now if you look policy as insurance one should take it positively that you are getting a security of some amount by just paying 5 or 10% of that amount. Now for one who is starting his career and have too much responsibility then he/she should secure himself/herself and LIC provides best option for doing the same within budget. Now returns and Income Tax saving are secondary benefits. Be clear about your goal before investment. Do ask everybody, listen to everyone, read, decide and then only go for it.
March 7, 2013 at 5:02 am
Hello Devendra,
Thank you for the valuable answer. This will help the readers.
Keep reading our blogs!!
Thanks,
Krishna