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.
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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