LIC declared it’s bonus rate on 1st September 2012 for the year 2012. Let us see how much are they and compare with last 5 years bonus rates.
Above Bonus rates for 2012 will be applicable for policies entered during the inter valuation period (01-04-2011 to 31-0302012) and in force for full SA as on 31-03-2012. It also apply for the policies whose death, maturity or surrender occurs on or after 01-01-2013. Also above 2012 bonus rate applicable who entered after 31-03-2012 and result into claims, maturity or surrender during the period commencing from 01-01-2013 and ending 9 months from the date of next valuation.
I considered only the plans which are currently offering by LIC. You notice from above table that Bonus rates are not changed to what it was previous year. Positive point is, it maintained the same increased rate of bonus rate for Jeevan Anand (which was raised previous year for all tenures). I mentioned here Jeevan Anand because it is one of the highest selling insurance plan.
Below are Loyalty Addition rates for few selected policies. I considered Bima Nivesh, Komal Jeevan and Jeevan Saral.
For Jeevan Saral if the policy is in force for atleast 10 years and full premium paid for all 10 years then loyalty addition is payable or due to earlier death for complete duration for which the premiums have been paid.
Also if death claim occurs in the 10th year of the policy and the policy is in full force then loyalty addition is payable.
If policy surrendered after completion of 10 years, provided 10 full years premiums have been paid under the policy, loyalty addition will be payable for the complete duration for which premiums paid.
Hope this information will helpful for policy holders.
Related Post-LIC Policies-How to calculate returns?
so 165 loyalty will be 3% p.a. (Rs.30 per 1000) ?
Dheeraj-Loyalty addition will not be paid on yearly base. Also what you quoted 165 is not the loyalty amount but plan number for Jeevan Saral.
BASU, I M AWARE OF PLAN NO. LA IS RS.300 PER MSA.
Dheeraj-I think I resolved your doubts about returns from Jeevan Saral.
LA will be paid on MSA
Exactly
Dheeraj-I changed Loyalty Addition from SA to MSA as we discussed during our FB chat. Thanks for pointing that doubt.
THANX.
NICE INFORMATION,THANKS,
I WANT KNOW SOURCE OF THIS INFORMATION,AS IT IS NOT YET UPDATED IN LIC’S SITE,
I WANT TO KNOW ABOUT LOYALTY ADDITION FOR OTHER PLANS.
PLEASE REPLY
Manish-Thanks for your comment. Yes it is not yet updated on LIC site. I got the soft copy of LIC circular. Sure, I can provide you if you give me your mail id.
THANKS FOR YOUR REPLY,PLEASE SEND ME SOFT COPY AT man_yog@yahoo.co.in
Done Manish
can u give me a copy at my email adress pl. my email adress is
jain_annie@yahoo.co.in
Jain-Done
please send me a soft copy at my email addr. pkumars.1792@gmail.com
Pradeep-Done.
can u please give me a copy at my email adress pl. my email adress is
meenarajkumar94@yahoo.in
Rajkumarmeena-Done.
pls send me a soft copy at my email
” bhawnareddy@gmail.com “
Bhawna-Done.
Hi Basu,
Srinivas from bangalore, i want to know the LA and my premium per month 2000 for 16 years , completed 6 years
Srinivas-Please let me know for what plan you are asking for, are you asking of LA you will get after policy completion or now, your age when you took policy and whether you want to know only LA or MSA+LA?
NICE INFORMATION,THANKS,
I WANT KNOW SOURCE OF THIS INFORMATION,AS IT IS NOT YET UPDATED IN LIC’S SITE,
I WANT TO KNOW ABOUT LOYALTY ADDITION FOR OTHER PLANS.
PLEASE REPLY
Prakash-It is from LIC circular. Yes it is not yet updated in LIC site.
PLEASE SEND ME THE SOFT COPY OF THAT CIRCULAR REGARDING LA
Robin-Done
Hi gr8 info .Mr. Basu Can i get d soft copy on explode@in.com.
Nik-Done
Hi please send me a soft copy at my email ID kalpanasudhir.2013@rediffmail.com
Mrs.Kalpana-Done.
can u send me the circular on LA OF JEEVAN SARAL
Rohilla-Will send you soon.
can u send me the circular on LA OF JEEVAN SARAL ON MY ID bhuvan2007@gmail.com
Bhuvaneshwar-Sorry for the delayed reply as I was out of city. Yes done.
Can u send me the circular on LA of jeevan saral on my id raj_g1987@yahoo.in
Rajesh-Done
thanks for info
what do u think about our saral plan?
i think j saral is highest selling plan, what will be LA after 10 years?
Sanjay-As of now it looks very pathetic return. You just calculate, it shows low returns (around 3% for tenure of 10 years). If in coming days LIC improves it’s Jeevan Saral Loyalty Addition then we can see some improvement. Let us see how LIC will show it’s results in coming years.
Can you please let me know the comparitive bonus rates offered by all the 24 different insurance companies just like how you have given for LIC.
Balagopal-It is impossible to publish such high data comparison. Because each company have atleast 20 to 25 insurance schemes. So compare all companies all schemes bonus rates means cumbersome. Hope you understand the difficulty. But I am sure that LIC have bit higher bonus rates compare to other private players.
Thanks for your prompt reply. I understand some private companies give compounded bonus. Which are those companies? Have all companies started declaring bonuses? Will the bonus rates be available on the websites of the respective companies? Does the IRDA have any such facility for the benefit of customers by way of educating the customers?
Balagopal-Let us verify. But in my view they need to declare. I think you may get info on their respective sites.
Can you send me the LIC circular to my email?
My email id is rathnakumar1984 at gmail dot com
Thanks!
Rathna Kumar-Will send you soon.
GOod Hard WOrk DOne………..
Ashutosh Sharma-Thanks for your comment
Can you please send me bonus circular on my mail id mukeshnvora@gmail.com
Thanks in advance
Mukesh Vora-Check ur mail.
I must say you are doing remarkable Job. I have invested in New Beema Gold. Could you please tell me let me know how much LA is declared in this policy? Also like In jeevan saral the differ between 10yrs and 11yrs is 50(300-250) assuming if a person as term of 20yrs at maturity he would receive MSA+ LA(750/1000 of MSA). Please clarify.
Aalok-Thanks for your appreciation. I didnt find New Bima Gold Loyalty Addition from the circular page. You may wait for publish of LIC all these data on their site. Yes including yearly bonus rate and loyalty addition depends on the term of the policy. As term increases, both benefits too will increase. But I am unable to calculate and tell you the exact loyalty addition for this plan.
HI, FOUND THE ARTICLE REL INTERESTING ND INFORMATIVE. PLS BE KIND ENOUGH TO SEND A COPY OF LIC CICULAR FOR BONU CHART TO MY ID — LIC.ASHISH@GMAIL.COM. REGARDS DR. ASHISH
Dr Ashish-Thanks for your appreciating words. Sure will send it.
Basu, Could u please send a copy of LA circular to aaa.goel@gmail.com
Amit-Done
I have policies jeevan mitra and jeevan anand , how they will calculate and add bonus ? if my policy is of 4,00,000 then 50 per thousand so they are going to add 20,000. In your view, will any LIC policies give interest 10% (not compound) per year ?
DVSHAH-Yes what you calculated in your example for SA of Rs.4,00,000 is correct. If you look at any traditional plan then your returns on overall investment will be around 6% to 8% compound interest. Now in your case of expecting 10% return means for each SA of Rs.1,000 bonus you are expecting is around Rs.100 which is not possible and dont expect any such high bonus rates. Highest bonus what they are paying is Rs.70 for Whole Life policy and for Jeevan Adhar (which is the policy dedicated to handicapped maintenance) it is Rs.100. So what you expected is really a high from LIC’s point of view
Thanks Basu for prompt response and nice clarification.
DVSHAH-You are welcome. Hope you enjoy my other posts too
Hello, I have policy jeevan Shree 1, Sum Assured: 10 lacs. I need to pay 16 years premium (around 50,200 thousand). Policy Term is 25 years. Last nine years, I dont need to pay premium. Agent told me that maturity amount will be around 30-33 lacs. Agent also said that it is elite class policy. I will get highest return. What is your opinion abt this? How LIC maturity amount can be predicted? I am thinking as Safe investment point of view. What % will I get return?
Thanks for your reading and helping me.
Kunal-Let us first make it clear to you that when this policies old version was existed which was around 15-20 years back at that time Rs.5,00,000 Sum Assured might be a huge amount. So at that time it was a elite policy. But the same Rs.5,00,000 or Rs.10,00,000 will not be sufficient to your any current financial goals. Hence as of today this policy is equal to other policies.
Now coming to return part, for the first five years LIC will pay you Rs.50 as Guaranteed Addition, means this much amount will be added to your first five years without any doubt. But from 6th year to 25th year it depends on LIC’s performance, which may vary for every year. Currently bonus which this policy get from 6th year onward will be Rs.50 for Sum Assured of Rs.1,000. If we consider the same bonus expectation for the remaining years too then return will be as below.
From 1st year to 5th year Guaranteed Sum Assured-Rs.2,50,000 (which you will get at end of 25th year or if something happens to you after 6th).
From 6th Year to 25th year bonus, I considered the current bonus rate which is Rs.50 for Rs.1,000 Sum Assured. So the total bonus you get during this period will be Rs.10,00,000.
Hence overall return from this policy will be Rs.10,00,000 (Basic SA)+Rs.2,50,000 (Guaranteed Bonus)+Rs. 10,00,000 (Bonus from 6th year to 25th year)=22,50,000.
Now even if you consider the higher bonus rates too the amount which your agent told will be not be possible. Overall investment from the above calculation will be 6% CAGR.
Thinking safe investment is good. But the option you have chosen is wrong. Instead if you opted for PPF then in all probability you will get higher return than this policy. Regarding insurance coverage, simple thing is to take a term insurance which covers your life risk fully.Now think and decide which is best for your safe investment.
Thanks for your very prompt reply. I think, FinaL LOYALITY aDDITION IS THERE IN THIS POLICY AS AGENT INFORMED me. what is CAGR ? compound interest ??
One more thing to ask you that, as you are from LIC agent background, could you tell me how much total commission will my agent get from above mentioned policy ?
Sir, please tell me, i am going to invest in Jeevan Saral on monthly plan, after 15 yrs i got 87895 as sum Assured and what would be the total amount with LA as per current, Thank u
Parashwanth-As of now LA is available for 10 and 11 year policies which is Rs.250 and Rs.300 respectively. So going by this trend currently you may expect LA as Rs.350, Rs.400, Rs.450 and Rs.500 for terms of 12, 13, 14 and 15 years (These are all future assumptions so it may be higher or lower). So your final returns will MSA+LA. Now hope you may easily calculation your returns. But I will remind you once again that we cant predict now itself the future announcement. Hope this is the fair calculation. Let me know your views if you have doubt.
Thank u very much sir,
Sir, is it LA for Rs. 1000 MSA ?
then for example 15 years policy
pls tell me how to calculate as per Rs. 250 LA on MSA of Rs. 87895, it is assumed total of my sum assured and how much amount i can received
Thanking you once again
Yrs
PRT
Parashwanath-LA is calculated on the SA not on MSA. So dont consider MSA in this case. Calculate LA based on the SA you got and that LA+MSA is your return on Jeevan Saral.
Dear Basu sir,
Thanks for your kind response and effort to answer every queries.
Now what i am asking is if the monthly prem is Rs. 500 up to 10 years how much total amount i can get at the LA Rs. 300
Parashwanth-Suppose your monthly premium is Rs.500 then yearly it will be Rs.6,000. In this case your SA will be Rs.1,25,000 which is 250 times of your monthly premium. MSA will be Rs.55,227 aproximately (I considered your age as 30 years). Now LA on this with the rate of Rs.300 will be Rs.37,500. So total return after 10 year will be Rs.92,727. This calculation is based on considering LA rate as Rs.300 per Rs.1,000 SA and your age as 30 years.
thank u very much i got somany information.
Ravi-You are welcome
I think Mr Basu, in the case of Mr Parashwanth SA is 125000 and MSA is 55227 the LA will be 16568(30 per 1000 MSA ) In Jeeva saral plan LA will be on MSA and not on SA,
Please check and clarify.
Thanks.
Manish N Shah
Manish-Thanks for updation. Yes it is on MSA not on SA. But correct your small mistake. You mentioned Rs.30 per Rs.1,000 MSA. You calculated correctly but mentioned as 30 instead of mentioning as Rs.300.
Dear Basu
According to your calculation LA is 55227 X 300 = 37500
and total sum after completion of policy I got 55227 + 37500=92727
am i correct ?
But the calculation of LA is wrong, so confused as how can i got 37500
pls sir tell me this and clarify it
thanks
Yrs
PRT
Parashwanath-It was wrongly calculated on my part which Manish corrected it in above comment. Your LA will not be Rs.37,500 but it is Rs.16,568. I calculated LA on Sum Assured but for Jeevan Saral LA will be on MSA. Hence LA again reduced to Rs.16,568. Now your return on investment will be Rs.55,227+16,568. I think now you got the point. If not then reply to this comment. But will give you answer once I will back from travel which is tentatively this month 28th.
I unable to comment as our main switch of internet lost so i could not contact you immediately
Be lated
Happy journey,
I got it you are right
Thank you
Parashwanath-Thanks
Hello Mr. Basu, firstly I would like to thank you for posting the data & actively answering the queries. I have Jeevan saral policy with 20 year term. What is the current loyalty addition rate for the same?
Ramesh-Sorry for the delayed reply as I was of city since a week. Currently LA is available for 10 and 11 years of policies. So we cant predict the LA for 20 year term policy at this juncture.
Hi Basu. Can you please confirm if LIC provides FAB for the Jeevan Anand Policy?
I checked the below link, http://www.licindia.in/bonus_info.htm#5
and i dont find that information.
Thanks,
Magesh.
Magesh-Sorry for the delayed reply as I was out of city since a week. Even I too not found this information. Let me check and confirm you.
Thanks for looking into this Basu. The Jeevan Anand policy which i’m talking about is a composite plan (it has some 20 plans) and they term it as “Magic Plan” Retire & Enjoy.
An LIC agent says that , LIC provides FAB for Jeevan Anand. My query is, If say LIC provides the FAB for Jeevan Anand , what stops them to display the policy number under the list of policies for which FAB is eligible.
It would be great if you can confirm me that.
Thanks,
Magesh
Magesh-Mixed plans are agent created plans, where they create combining two or more plans to suit your needs and they name it according to their wish. Hence you can get the details about those plans anywhere.
Yes, what your agent told is right. LIC provides LA for Jeevan Anand. But the question you raised too is also genuine. Will try to search for info and get back to you soon.
Thanks for raising such a issue
Thank you very much Basu. Awaiting for your confirmation reply.
Thanks,
Magesh.
Magesh-Thanks
kindly provide some details about table no 90
Alok-It is marriage endowment policy. This is traditional plan, so returns will be normal. On survival till the policy period, policyholder receives-Sum Assured+Bonus. You can redeem this amount in 10 yearly installment. But the rates of that will not be known now. On death of policy holder-Future Premiums will be waived, Basic Sum Assured+Bonus will be paid to nominee only on completion of period. But can you elaborate more for asking particularly about this product?
Mr Basu thanks for info. kindly mail me bonus chart on my mail sameer.belan@yahoo.com
Sammer-Thanks for your comment. Will mail you soon.
please send me the bonus chart.. my email id nagraj_pai@yahoo.com
anyways.. a good work done mr. basu..
also i wanted to know whether loyalty addition will be exponential like 250 -300-350 and so on..
because after that.. lets say after 25 years plan… LA will out run 1000 MSA
we dont expect LA will be 1250/1000 for 35 years plan tenure……
thanks for help
Nagaraj-Thanks for your appreciation. Sure will send mail now. No, LA will not be the of same order. It may decrease or increase based on LIC returns on investment. Hence it is premature to judge LA of 25 years plan as Rs.1,000. In above calculation, for understanding purpose I considered the valuation. So let us wait how LIC declare in future
i have gone through previous years bonus given by LIC 2010-11 to some of their.. products and to surprise there are instances where. 3000 per1000 MSA is given.. just for example.. look at 6th page of bonus records lic 2010-11…..
then there might be atleast 2500-3500 /1000 MSA for 30+ year of saral… also there is no .. regulsr bonus… hence.. it seems that way
Nagaraj-LIC declared LA for Jeevan Saral for the tenures of 10 and 11 years. Bonus is entirely a different thing from LA. Bonus is the return which LIC pay you back for your investment on yearly base. But LA is one time payment for loyal with LIC, which is calculated on SA (for Jeevan Saral on MSA). So dont compare Bonus rates with LA and not judge yourself with expecting such high LA. Also may I know for which policy LIC declared Rs.3,000 per MSA?
look at table 4 of the pdf file you have sent.. its written
Amount of Final (Additional) Bonus per ` 1000/- Sum
Assured for policies with sum assured
and there 40 yrs term the bonus is 3550
so my doubt if final additional bonus is .. so much
then for j.saral customers who will receive only L.A. only…
there will be a considerable 4 digit L.A.
anyways.. if i am wrong then i apologise
but for Lic to show 6% and 10% return values.. is only possible if their.. L.A. is in four digit,. this is my feeling..
Eg.
if a person invests 6k per month for 35 yrs
he is supposed to receive 2.2crore.. this is what the Lic agent had as pamplet..
calculated at 10% .. which is way beyond reality
..
now lets take 1000 LA /1000 M.sumassured for same scenario
6k per month
MSA 25lac
now if LA is 1k/ MSA
then 25 lac will be LA final amount
total will go to 50 lac
thus,, promising 2crores. is stupidity
hence i feel
LA will be above 1000 but maybe less than 1500
anyways.. i might be wrong.. as i am not that good in calculation
thanks anyways
Nagaraj-FAB is always on SA not on MSA. So it will automatically get reduced which is not the case with LA of Jeevan Saral. Also for your information Jeevan Saral maximum term is 35 years for all age. Now difference between FAB and LA of Jeevan Saral depends on return of each type of policies accumulated amount. Hence it is not wise for us to compare. One more catching point of Endowment type of policies is, Insurers are free to consider the expense ratios and usually they not declare those points. Compare to such policies ULIPs have all disclosures.
Now regarding your calculations-I think that agent shown you tax benefits too, which usually agents show to lure investors. Hence request you to go through the calculation part. 10% returns on traditional policies highly impossible.
I took the Jeevan Saral for 3o year old with monthly premium of Rs.6,000 and tenure being 35 years. So MSA on this will be Rs.30,07,475. Now we cant predict what will be LIC’s LA for 35 years but we can expect some good lumpsum where you may get around 6% to 8% of decent return. Hence I am not calculating LA for this example. Even if you consider Rs.1,000 as LA per each Rs.1,000 MSA then total LA will be Rs.30,07,475. So overall return will be Rs.60,14,950 which will be 4.62% CAGR. (I considered tenure as 35 years, Payment as yearly Rs.72,000 and Future Value as Rs.60,14,950).
So even we consider around Rs.1,500 as LA too, your return on investment will hover around 6% to 8%.
Hope I answered your quarries
Shri Basuji, Can you please tell me where I can get accrued bonus information against my policies? Is it available on LIC site? Dhanyawad….abhijeet
Abhijeet-You will get the accrued bonus information in any of your nearest branch. You need to get that information by quoting your policy number. I think LIC will send you yearly accrued bonus intimation. If not got the information then you may contact your nearest branch. If you created login to LIC site then you will get the accrued bonus information for the registered policies.
Namaste,
Hi Basu ji,
sir, i got Jeevan Saral LIC Maturity / Premium Calculator from below link, is it correct or not please check and inform me
http://www.jeevansaralplan.in/lic-premium-maturity-calculator.php
Thank u
Parashwanath-It is just calculating Sum Assured, which is 250 times of your monthly premium. Even you can do yourself also by just multiplying your monthly premium by 250 times. This is the life risk what you get. But returns will be different which you will not calculate from the attached link.
Thank you
Parashwanth-You are welcome
i have gone thru your posts. well done mr. basu. best of luck. thanks
Jain-Thanks for your comment
hello sir
i have read all ques. and their reply , as per your opinion in jeevan saral policies LA will be paid on SA not on MSA but lic branch manager says it will be paid on MSA , now i am confuse so plz can u send that circular of LIC & LIC bonus declared for 2012 . My Mail id is advpawanparikh@gmail.com
Pawan-In all LIC policies except Jeevan Saral, LA will be on SA not on MSA. For your clarification I am sending you the circular about Bonus rates. You find the same what I told above.
ok sir n thanks for ur reply but still i have not received ur mail so plz send me LIC circular ( J Saral ) & bonus declared circular My mail id is advpawanparikh@gmail.com
I have read Mangesh query about FAB for Jeevan Anand i think FAB declared or get when policy completed for 15 yrs & Jeevan Anand plan has before 10 yrs ago so therefore there is no any circular FAB of Jeevan Anand.
Pawan-Thanks for sharing info. But still I will also try to get the right information.
Pawan-I will sending once again.
Hi Basu,
Can you please let me know if you were able to get the reason why the Jeevan Anand policy number is not shown in the list of policies for which FAB is provided.
Thanks,
Magesh
Mahesh-I need to check it out.
Hi Basu,
Is the FAB info for Jeevan Anand shown in any of the LIC circular ? If yes, can you please forward me that.
Thanks,
Magesh.
Magesh-It was not shown in the circular. That’s what I told in my earlier comment that I need to check it out to get that info. But as of now in circular it was not available.
suppose Jeevan saral policy is for 10 years term and monthly premium is Rs.1000 and if 10 years
are completed in mar 2012 then how much amount i will get as maturity benefit with latest LA declared by LIC.
D.B.Shinde-Considering your age 30 years (which you not mentioned in your question), Sum Assured will be Rs.2,50,000 (which is 250 times of your monthly premium). Now maturity sum assured for 10 years will be Rs.110,530. LA for 10 year Jeevan Saral on your MSA will be Rs.27,632 (Calculated at Rs.250 per Rs.1,000 MSA). Hence at the end of 10th year you will receive Rs.1,38,162. Overall return on investment will be 3% CAGR. Hope I answered your doubt.
Thank you Basu I am satisfied with your clarification
D.B.shindhe-You are welcome
For Age 56 which plan gives good return on investment alongwith risk cover
George-For age 56 years it is not worth to invest in any insurance products which combines bit of risk+investment. Instead I refer you pure investment and if you really in need of risk then opt for term plan. Reason is, in allmost all plans maximum term will be less for the age you are telling. Hence return from such products are based on bonus rates which again are interlinked on term of the product. Hence it is sure that you will get less returns by going risk+investment combined product. Let me know your thought too.
Hi Basu,
A very Happy Diwali to you. Did you get a chance to know LA on new bima gold. Moreover, I would like to know if FAB offered on all LIC policies with term more than 15 years to all policy. your reply would be appreciated.
Regards,
Aalok
Aalok-Wishing you the same
Sorry I didnt get any information due to my other work pressure. But will inform you within a few days. Regarding your need for FAB of all policies, I will send the circular based on which I wrote this post, from that circular you will get the FAB details.
Hi Basu,
Please do forward that circular to me as well . My email id is masampat07@gmail.com
Thanks,
Magesh S.
Magesh-Done.
Hi basu, I’m planning to buy jeevan sacral of 6k pm. Is that OK for investment & tax savings.
Pls can you differentiate between sacral ,ppf,rd. whicj is better..Thanks
Pls reply to my email mkm643@gmail.com
Manish-Instead of sending you the mail, I am replying here itself so that readers also can benefit from the doubts you raised. Jeevan Saral investment for tax saving, I dont think a right move. Instead I prefer first to go for term plan to cover your life risk. Then based on your risk appetite and age you may diversify your tax saving portfolio into ELSS (This year you can enjoy, once DTC come into effect then whether they include ELSS under Sec 80C or not), PPF, Bank FDs. RD not come under tax saving option. Hence it is of no use to go for RD. Hope you got reply. If you still have doubts then you can raise.
Hi Mr BasuNivesh,
I have policies of LIC ( Endowment)
I want to do calculation about the returns that is generated up till now, considering all factors like basic premium paid, bonus, loyalty rates benefit etc (example: 10,000 x 6 = 60,000) + (Bonus) + (loyalty).
Do you have any excel or formula to do calculation or manage portfolio
please do reply on my email id – joshiyograj@yahoo.com
Yograj-You can calculate bonus as of today. But in case of Endowment policies, eventhough every year bonus will be declared and calculated to your policies as total return of policies, but you will get this generated bonus at the end of the policy term. Hence you can’t say that bonus generated now is of same value when matures. For detailed calculation, if you mail me all the details then I can calculate and let you know. Do mail to basavaraj@basunivesh.com.
Hi Basu,
Hope you are fine. Could please suggest me a plan in LIC which offer revisionary bonus +LA+FAB? I mean to ask if there is a policy/plan which offer all the above mentioned benefits.
Regards,
Aalok
Aalok-Below are the few plans where you are able to get Bonus+LA+FAB
1) Endowment Policy (Table-14)-But FAB will be applicable only if premium paid is for 15 years or more.
2) Limited Payment Endowment (Table-48)
3) Childred Defered Endowment Assurance
4) Jeevan Chhaya
5) Jeevan Surabhi
6) Jeevan Anand
7) Child Career Plan
8) Jeevan Amrit
9) Jeevan Bharati
But in my suggestion, it is not wise to go with the plans which have all the above returns. Each policy is unique and hence each have difference Bonus, LA and FAB. Hence dont go with features, instead better understand the value of Insurance which never combines with investment.
@Basu – first of all, thank u for posting the bonus rates and helping ppl’s doubts. I have one question – my age is 24, i have taken Jeevan Saral policy of Rs.24000 premium per year for 20 yrs.(SA Rs.5 lacs). Now, in the chart the LIC agent showed me, it was mentioned after 20yrs, i would get Rs.16 lacs (investment=4.8 lacs, return = 16 lacs). But i want to know how to calculate MSA and total return i will get after 20yrs, assuming LA for 20yrs to be
Sayan-Now in your case MSA will be Rs.5,57,520 which is guaranteed return. Now LA will be calculated on your MSA. So even if you consider Rs.1,000 as LA then it will be Rs.5,57,520 (I considered higher probability of LA). Currently LA for 10 and 11 years policy are 250 and 300 respectively. So what your agent told was too exaggerated expectations. From above calculation you may get Rs.11,15,040 (MSA+LA) where return on investment will be around 8%. Now think yourself, is it worth to invest for your long term goal of 20 years? This return what I calculated on LA with higher probability which LIC may achieve it or not is the point too.
Whether whole life /Term insurance are eligible for bonus -LIC as well as private insurer. In case of death , whether the sum assured +bonus will be payable since the question return to policy holder is not there like endowment policy Will you have nay record of details of private insurer declared any bonus ? LIC has any online plans to purchase?I and if not the reason .its premium rates are high compared to others normally,Any reason What is the present rate of annuity declared by LIC if I purchase an annuity and annuity is taxable like bank interest ?.Thanks
Bala-Whole life plans are eligible for bonus but not Term Plans. Yes in case of death his or her nominee will receive SA+Bonus. But in case of Term plans only SA. You get bonus rates on individual insurer sites. Currently LIC have only one online plan which is pension plan called “Jeevan Akshay VI”. For detailed review on this policy you can visit my blog post link http://basunivesh.com/2012/07/13/lics-first-online-plan-jeevan-akshay-vi-review/
Thanks for you reply Mr. Basu
Please do let me know what kind of details you require for calculating.
I will provide you all detail. Again i thank you for considering my request
Yograj-I need name of LIC plan where you invested, term of the plan, age when you took and yearly premium you are paying. Send me these details, and let you know the returns on your investments.
sir pls send me the circular of jeevan saral bonus to me – rajunairva@gmail.com
Rajagopalan-Done
But I am not sending the Jeevan Saral circular only instead I am sending whole circular where you need to find Jeevan Saral.
HI Basu,
Let me congratulate your effort !! Your effort to reply everyone is really great!! The details are really informative..
One question i have is whether LIC declares Interim bonus is declared every year? Is it seperate from Reviersionary Bonus? (whatever i see from the bonus reports from LIC website the report always mentioned as “REversionary & Interim Bonus” , does that mean Both are same or both combined togother the total bonus value is mentioned or each of them has will get that much %)
In Simple terms do i get 2 bonus in a year?
Regards
Subbu
Subbu-Thanks for your appreciation
Difference between revisionary and interm is, revisionary bonus rates are usually declared once insurance companies collect the data of all their financial positions. But sometimes and usually what happens is, every year this date may not applies to exact date. Hence if any claim arises during end of previous bonus period and non declared period of current year then this interim bonus rates are applied and paid to policy holder or nominees. Usually you may notice that their will not be much difference in these.
Hence you will not get two bonus for the same year, you will only get revisionary bonus. But in case of claim during non declared period then for calculation purpose they consider interim bonus and pay you immediately. If you still have doubts then again raise the same in this platform only so that all can view the discussion.
Hi Basu,
Can we buy a Term insurance from Aegon Religare? I do see their claim settlement ratio is bit low compared to other competitors. Can you please suggest your opinion on that.
Thanks,
Magesh S.
Magesh-When you are buying any product it depends on your suitability, pricing, service they provide and claim settlement (in insurance product). Considering these things, if that product really suites your need then you can purchase. Only thing you need to do is disclosure of all facts correctly. If that is done from your part then no one can reject your claim.
hi basu. hw r u? can u pls send me the bonus circular as well as loyalty circular on sharmafinancialadvisors@yahoo.in…
Regards
Deepak Sharma
hi basu. how r u? can u pls send me the bonus & loyalty rate circular on sharmafinancialadvisors@yahoo.in…….
Regards
Deepak Kumar Sharma
Deepak-I am fine and hope the same with you too. Will send now.
can u pls tell me reg Jeevan tarang if i take for one lakh SA for 15 yrs accumlation period for age 47 what is the return..
George-Jeevan Tarang is the plan where in your example you will get bonus at the end of 15 year. This bonus according to today’s rate will be around Rs.69,000 (I took Rs.46 bonus rate per Rs.1,000 SA for 15 years). After that you will receive Rs.5,500 till your death). If you survive till policy anniversary or 100 years of your age then you will SA which is Rs.1,00,00 along with LA (which we can’t predict now).
Now the bigger question is with yearly payout of Rs.7,097 (yearly premium) and getting bonus of Rs.69,000 after 15 years and life long Rs.5,500 after 62 years of age will actually add value to your financial life?
What will be the value of today’s Rs.5,500 after 15 years? Will you sustain with such a low income?
If you invest the same amount in any equity oriented fund where if you get around 12% return then your amount will be Rs.2,64,574. In that amount if you withdraw the same Rs.69,000 (LIC Bonus rate) then remaining amount will be Rs.1,95,574. If you invest the same amount in any low yielding product where you get yearly return of around 8% then your return on investment will be Rs.15,645 yearly.
Now think and decide.
Thanks Mr Basu. It was very knowledgeable.
What I actually want is: Risk Cover + Returns (after 15 years). Ie. whatever I have invested for 15 years (Rs. 1,06,455) + Bonus + LA.
Is there such a Policy with LIC? If so, please advise Policy Plan. Thanks.
George-Instead of clubbing your investment with insurance, I advise you to cover your life by purchasing Term Plan (from any of your comfortable company, even LIC too). Remaining amount better to diversify in other asset classes. If you do in such a way then you may get higher return that normal LIC’s endowment plans plus fullest risk cover. Hope you understand the need of insurance.
Is one entitled to get Bonus as well as the Loyalty Addition amount?
Vasudev-Yes but not on all policies. Only selective policies have option to get bonus (which all traditional policies get) and Loyalty Addition.
Nice work
Do you have any details of the Plan 112- the old Jeevan Shree. Any idea on the Bonuses?
Abhijit-Thanks. I think old Jeevan Shree have guaranteed bonus rate. Hence they not included in the above list.
Hi Basu, Thanks a lot for your post. Its very informative. As per your analysis,for 10 years,the returns on Jeevan Saral is 3%,but agents are boosting it to 8-10%. So is it a myth? I am investing 2042 per month in this and after ten years,I can expect just 3% on the total invested? Its less than the SB bank saving of 4%
Karthik-Thanks for your appreciation
Yes return for Jeevan Saral with tenure of 10 years is around 3% (based on this year’s bonus rates). Yes agents are exaggerating the returns to get business. I am not saying anything wrong, but based on LIC’s recent bonus rates on Jeevan Saral, you can calculate yourself and come to conclusion, which I did in previous comments. You are right it may be less than savings account rate.
Thats scary Basu, even LIC website says that the returns are high(though they say its not guarenteed) http://www.licindia.in/special_plan_001_illustration.htm
Whats your suggestion?Should I continue or discard this?I’ve already paid up 3 years(started when I was 27)
Karthik-Whoever claims, but this is the reality. You need to think and decide.
can u pls send me the bonus & loyalty rate circular on
Janet-Done
Hi Basu,
I am bit confuse to select policy between Jeevan Saral and Table 90(Marriage Endowment with profits), as i checked in a trial software for 17-21 years (5 polices for both Plans).
I got more returns on Jeevan Saral,Please suggest me if am correct to go with Jeevan Saral.
Thanks in Advance.
Mahesh
Mahesh-Please let me know the reason for going with Jeevan Saral and Marriage Endowment. Reason for asking is, your selection should first fulfill your life risk and the secondary thing is investment which you can avoid also. Share the ideas and will definitely help you out to the best of my knowledge.
Basu, i want money for my child education starting from the age 17-21.
when i compared both plans i got more returns in table 165.
Please suggest me the Gud one.
Mahesh-When you are planning for your kid’s education and I think which is more than 10 years then will it really fulfills your kid’s education needs by purchasing these plans? I think no, with returns around 6% to 8% how can you meet those expenses? Please let me know your views too.
yeah, i do agree that these will give 6-8% , but both of these are guaranteed right? pls let me know if you have any other options.
Mahesh-For your information, both the products are not guaranteed. Your returns are depend on LIC’s future bonus declaration. You may predict some positive returns of around 6-8% but cant assure that they give this much only too. Why can’t you take the route of equity through mutual fund SIPs? To beat inflation you need to invest where you get higher returns than inflation rate then only you sustain. Let me know your thoughts too.
I donno how it works, and how much i get returns after 17 years if i invest 50K per year.Please give me the details for that .i will think and decide.
Mahesh-Will mail you details. Are you from Bangalore?
Yes..
Mahesh-Will mail you the details. Please share some information like your kid’s current age, and suppose if he/she is currently 18 yrs then how much will be expenses for education+marriage. Share these info to my mail id, I will definitely guide you.
her DOB is 02-01-2012 and mine is 04-04-1984.i want 2.5 lakhs at her age 17, 1 lakh at 18.
and at 19 it shud be 5 lakhs ,20,21 and 22 i want 2 lakhs.
Mahesh-Will mail you the details. Go through it.
Mahesh-I replied the doubts through mail. Please check it.
Pls let me know for age 52 which plan is more suitable to get risk cover as well as savings.
Reg Jeevan Akshay what percentage of service tax applicable.
George-Opting risk cover at this age will cost you more even if their is no health issue. If still you need risk coverage then better to go for Term Plans. Taking risk about investment at this age is not a viable thing. Hence go for options where risk is low like Debt Funds, PPF (if you already have), Balanced funds, Bank FDs or RDs. I recommended these products purely based on saving option at this age, not gone into taxation issue. I dont know exact service tax applicable to Jeevan Akashy. If you really need then I inquiry with some one and get back to you.
Hi
Pls mail me the bonus chart and finaly additional bonus chart of jeewan anand plan
thanks
Jigs
Jigs-I am mailing the whole bonus circular you can find your desired information from that.
Pls let me know LA amount/rate for Plan No.175 and 179. I could not find it in the Bonus circular which you have sent.
George-I personally not fond of LIC. Hence for specific information you can either contact nearest branch or LIC site.
Sir I can spare 35000 per annum on insurance aged at 36 yr living with house-wife and having 6yr son. I can esclate my investiment around 10-15% rate. I have any policy till now. I will be greatful to you if you suggest me best combination of product
m.thanabal@gmail.com
M Thanabal-Please mail the same details to my official mail id basavaraj@basunivesh.com. I will definitely help you.
Hi Sir. very nice post with more information in the comments section which replied by you. Please give your feedback about Jeevan Saral? Is there any good about this policy compare to other policy
can u pls send me the bonus & loyalty rate circular on v.beemaraj@yahoo.com
Thanks,
Beemaraj.
Bheemaraj-Thanks. Jeevan Saral is the product which combines insurance with investment. From above comments you might have noticed that returns from this plan is less. Hence I strongly recommend you to not to go with this product. I already sent you the mail, check it.
Thanks Sir. I got mail also.
bHEEMARAJ-You are welcome.
Hi Basu,
I am looking of investment for 20-25 years for retirement plan. My current age is 32 years.
Can you please suggest any good investment option with insurance and without insurance too ?
If any plan has good return history then also good for me. What is your view on it ?
Thanks,
Dankesh
DV Shah-If your waiting period is 2-25 years then I strictly and faithfully advise you to go for equity investment through mutual fund and cover your life risk by taking term insurance of 10-12 times of yearly income. Follow the basic rule what experts always recommend “Never club insurance with investment”. Hope I answered your query. If you still feel specific answers then instead of sharing all your personal information on this public platform, mail to me. I will definitely guide you.
is Jeevan Saral La is compoundig
Jitendra-For your information, in LIC neither bonus is compounding nor LA.
congratulation ! ! i enjoyed and get informed about so many things . thanks prakash shah .
rajsociety@yahoo.o.in
Prakash-You are welcome
Is Komal Jeeavn In Your Chart at 2010and 2011 LA is Not Applicable so please clarify this
Jeetendra-I have not found the data for that respective year from LIC site. Hence put it as NA (Not available).
WT IS DIFFERENCE BETWEEN INTRIM BONUS AND REVERTIONARY BONUS AND HOW INTERIM BONUS IS DECLARED
Raghavendra-Please look at the above comments. One of reader posted the same quarry and I replied for it.
Dear Sir,
I have completed 4 yrs in Jeevan Saral Policy having monthly premium of INR 4500.Pls let us know how much will be possible amount I can get after 10 yrs and 15 yrs based on current performance of this policy.This info is critical to me to decide continuation of policy.I am thinking about to suurender this policy and to invest in other policies having better growth prospect……
Awaiting your valuable inputs
Thanks & Regards,
Rajesh
Rajesh-For the returns on your existing policies. Better to check above comments. If you completed minimum premium paying period then better to come out. Take Term Plan and invest in such a way that your portfolio consists all asset class and maximize your returns.
Sir,
Thanks for the response.Can you suggest any term plans for better returns.
With Best Regars : Rajesh
Rajesh-Term Plans for better returns? In term plans your nominee will only receive the opted Sum Assured otherwise their will not be any returns. Now regarding the product selection. Please look at your cover you want to take and take till the age of 60 or 65 years. Choose the plans which offer online purchase. Reason is, online term plans are cheaper than offline. In my view better to look for HDFC Insurance, ICICI Pru Insurance, Kotak, Aviva. Compare the premium and according to your comfort with the insurer you purchase it.
Thanks you very much sir !
Rajesh-You are welcome
Dear Basu
I read above comments but what is mean of SA, MSA, LA ?
I took jeevan saral for 20 year,on half yearly premium 3030.
I don’t know am in SA or MSA ? How i change from SA to MSA ?
will you please guide me what is my LA + MSA on maturity.
and will you please send me the soft copy of LIC circular.
My Email id is prashant.dhakad4@gmail.com
Thanks And Regards
Prashant
Prashant-In Jeevan Saral plan SA-Sum Assured means the risk of your life during the tenure of the policy. MSA-Maturity Sum Assured means amount you will get after the completion of tenure. In all probability for 20 year plan you will get around 6-8% return from this policy. I did calculation in one one of the above comment. Please refer the same. Still you have doubt then ask me I will do the calculation only if you provide all the details of the policy except policy number.I am sending the circular to your mail.
Thank you basu for reply..
Will you pls do the calculation for me
Prashant-Which calculation I need to do? If you want overall guidance then better to mail me your personal details. I will reply to you. Sharing your personal information on public platform is not worth for you. What you think?
Dear Basu
One thing am not mention in above is i took the policy in this month 2012. Am now 26
And i have plan take another one for my brother he is now 20.
pls reply
thanks
Prashant
i send mail to you pls check
Prashant-I replied to your mail. If you have still doubts then please let me know.
sir ….will you mind telling me , how to calculate MSA…???
Aman-We take the example as, age-18 years, Term-20 Yrs and yearly basic premium Rs.12,000 (But net premium will be Rs.12,010). LIC have provided basic MSA table from that for the age 18 years and Term 20 yrs, MSA will be Rs.28,060 for a premium of Rs.100 per month premium. Now to come to MSA of above example we need to calculate as below.
(12,000*28,106)/(100*12)=2,81,060. This is how MSA is usually calculated.
Hope you understand it in a proper way. I usually refer the ready made charts which agents follow, where we dont need to calculate each time.
Hello Mr Basu Nivesh i really appriciate ur efforts…cud u pl help me out too…can u pls send me the bonus & loyalty rate circular on raj.handeep@gmail.com. i will be grateful to you
regards
handeep
Handeep-Done.
for Jeevan Saral 165 for 10 years term my age is 28 and had started the policy 2 years back on MI of Rs2042
Handeep-Can you please explain what do you mean by MI? Also share your age when you took the policy.
I m sry Mr Basu MI stands for Monthly installment is Rs2042 and when i had started the policy my age was 25 years. now i m 28 years old . my Jeevan saral policy(165) is for 10 years with sum assured of Rs 5 Lacs. What would be the lumsum amount i would get finally?
Handeep-In that case your Sum Assured (which is life risk on your life for the total period of 10 years) will be 250 times of your monthly payment which is Rs.5,00,000. Now the guaranteed maturity amount which is called as MSA (Maturity Sum Assured) will be Rs.2,22,420. Now the LA which you will get above MSA as additional benefit will be Rs.55,605 ( I calculated based on current LA rate which is Rs.250 per Rs.1,000 MSA). So overall you will get Rs.2,22,420+Rs.55,605=2,78,025. Overall return on your investment will be around 3%. Now think is it worth to invest??
Thanx Mr Basu I m giving them R 245000 in 10 years and i will get Rs 278025 only. had i made this amount FD than also i wud have been benefitted .. useless i think what ur expert thinking says Mr Basu
Handeep-Good thought what you said. Take term insurance and remaining amount you can invest yourself. If you are totally risk averse then go for Bank FDs or PPF and ready to take the calculated risk then go for equity investments through SIP. Simple funda
Oh I m really very sry Mr Basu,
MI stands for Monthly Installment of Rs 2042 which m paying as premium.
My age was 25 years when i had taken the policy now i m gonna 28.
the Jeevan saral(165) is for 10 years with sum assured Rs 5 Lacs
What would be my final amount to get from the policy including loyalty?
Thank you
Hello BasuNivesh and Members,
I have opted for Jeevan Saral Plan, Term 15 Yrs and yearly premium of Rs12010 (SA is 250000), i have paid regularly for last 3 years, if i stop paying my premium henceforth
a) what will happen to my policy, will it lapse?
b) What will be new SA
c) and how much amount i will get after 15 yrs i.e. on maturity.
There is no point on surrending as the refund amount is very less.
Please guide
Ritesh-If you stop premium paying after three years then policy will lapse. So it get as paid up value. This is the value you will get either on maturity or as a death claim during the policy period. You will get the paid up value only because from that lapsed year it will not get any benefit till the policy period ends. Hope you got clarity now.
Thanks BasuNivesh,
If i continue my policy by paying my regular premiuim, what will be the amount i will get at maturity after 15yrs.
Ritesh-You may get around 6-7% return from this investment.
Hi Sir,
Please help me with my policies. I have three policies 1) Jeevan Anand 2) Endowment Table 014, 3) Jeevan Saral.
I took eevan Anand at the age of 31 yrs with Yrly premium of 43653 and sum assured of 1000000 and maturity in 2030.
Endowment Plan Table 014 , my agent has provided me 22 bonds with sum assured of 70000 per bond and premium varies with each bond from Rs. 2223 for first bond maturing in 2031 to Rs.1843 maturing in 2051.
The policy is Jeevan Saral that i took at the age of 34 yrs with yrly premium of 46451.50 and Term rider of 987.50, this is for 35 yrs.
Please let me know how all these policies are going on and what will be the maturity amount for them. I am bit concerned about Jeevan Saral and want to know if Taking term rider is needed. What will be the maturity amount after 10yrs and do i go ahead with this policy. My agent gave be a pdf chart that shows the return as approx 8 lakhs…and 30 lakhs for 20 years. I am bit concerned if this is correct…. as I don’t want to be on loss as I have made a heavy investment on policies.
Please provide me your suggestion regarding all the policies mentioned and if you need some more details please do let me know.
Regards
Sandeep
Sandeep-This this the wonderful example of how agents sell insurance products without actually calculating your insurance need. From all policies you can expect around 6-8% of return. Please first understand the value of insurance in your life. You need to take insurance only for fulfilling your insurance need. But your agent sold you left and right by mixing insurance with investment. I am not against LIC, but if you have so much faith then better to restrict your LIC investment (unhappy to say it as investment) to around 10% to 20% of your portfolio. This recommendation is only to diversify your investment where such products always low yielding products. These will actually neither serve the purpose of your life insurance need nor your financial need.
Regarding selling Endowment Plans of around 22 bundle of policies means he might have sold you some combo plans showing returns which may look good as of now but at maturity the same amount will be like penny. My sincere request you to take note of your insurance need and investment needs separately. Also act immediately, I am saying these things with pain even I myself being LIC agent. If you need any guidance in building and streamlining your finance then let me know. We discuss and do the things in a better way.
Hi Sir,
I am feeling shattered and cheated…please help me…I don’t know what to do and what not…i am not left any courage to invest more and do not know what to do now and how to move ahead….at this platform its not possible for me to explain you all the policies…do let me know we can discuss the polices and move ahead….
Sandeep-I can understand your frustration. Please send me all your investment details to my official mail id basavaraj@basunivesh.com. I will definitely guide you in streamlining your financial life.
Thank you sir, do let me know in which way the details need to be send by me. I am what all details sir
Sandeep
Sandeep-Send me the name of policy, Sum Assured, Period, Premium you are paying yearly and age when you took these policy. Also it will be helpful if you send me the plan presentation which your agent sent you when you took policy.
Sir,
I have forwarded the details to your at your ID.
Please check.
Sandeep
Pls do let me know if you have received my e mail
Sandeep-I received the mail. I will check and revert soon.
Hi,
I checked your e mail. and also send you a revert. Please reply whenever you are free.
Regards
Sandeep
Sandeep-I saw your reply. Will get back to you soon.
Dear Sir,
I have send you an e mail at basavaraj@basunivesh.com ( as on 19th Feb )
, please check and reply. I couldn’t contact you from quite some time due to ill health.
Sandeep-It’s alright, will check and reply to you.
Hi Sir,
To add the sum assured given in the bond for J Saral is 1855710 , I am not able to understand the difference between the Sum assured and the actual payment received. Looking ahead to your expert comments.
Sandeep
Sandeep-For Jeevan Saral policy, Sum Assured is the life risk what they will pay to your nominee in case of untoward incident of your life. Maturity Sum Assured is the amount which LIC saying will definitely pay you. With MSA you will also get LA which is based on LIC’s performance and will declare on every year.
HI THERE.. MY FATHER CAN PAY 30000 PER YEAR FOR10-15 YEARS..
CAN U SUGGEST ME SOME POLICY.. AND XPLAIN A BIT..
WHAT WIL BE THE MATURITY AMOUNT?
MY DADS AGE IS AROUND 48
Sanaket-Suggest your dad to take first insurance cover to the tune of his 10-12 times of yearly income. Rest in any well diversified mutual funds and PPF. This will really works you a better option rather than taking insurance where your father’s life risk low and return on investment around 6-8%. If you still need guidance then please feel free to contact me.
Mail me through this email id sarashvathy555@gmail.com, i will explain Mr.Sanket
Sarashvathy-What details I need to mail you?
Dear Basu,
A very happy new year to you. One of my friend who is in illiterate but earns handsome wanted to save tax on his income. He invested in HDFC ULIP plan with Rs 25000/yearly for term of 10 years in 100% balanced fund in july 2011. When he came to know that his money was invested in share market. he didn’t proceed further. Now, he want to surrender the policy. I would like to know:
1. Would he get some amount if he surrenders now or all his money is lost?
2. if he surrenders the policy after lockin period(5years) would he get the entire amount he invested initially?
3. Would he get the full amount i.e. 25000. or he would get lesser?
He doesn’t want to invest with them any more .as he is quite shattered and feel cheated. So what should he do to get the money back.
Your suggestions would be appreciated.
Regards,
Aalok Sudan.
Ashok-Wishing you the same
As of now in ULIPs you can withdraw it after the completion of 5 yrs. To give you a clear picture, please provide me the name of product which he invested. I will go through it and reply you in a better way.
Thanks Basu for useful information and your hard work.
Can you please send me the LIC chart at my email id riteshrmittal@gmail.com
Ritesh-Pleasure. Will send you.
HI BASU HAPPY NEW YEAR
SUPOSE I GET MATURITY AMOUNT OF JEEVAN ANAND POLICY EVEN THOUGH RISK IS STILL GOING ON TILL DEATH
CAN I WISH TO GET THE SURRENDER VALUE OF THE FUTURE RISK? KINDLY INFORM ME THE FACT.
Shindhe-You can surrender that risk. I tried to point out the same in my post “LIC’s Jeevan Anand-My favorite plan” But I have no clarity how much you will get it. I tried to get it from LIC too. But no one responded. That attitude may be due to mind set of Govt organisations
Hi basu can u give me LIC circular my email id is psquare25@rediffmail.com
Prabha-Done.
Hi Basu can you please send me the lic circular to my email id lifecarelic723@gmail.com
Can you please also send it to abhinav.sgsits@gmail.com ?
Abhinav-Done.
HI BASU, CAN YOU PROVIDE BONUS DETAILS FROM 1995 TO 2007 LIKE THE ABOVE TABLE. THANKS
Anup-It is bit cumbersome for to club all data and do it. Instead you can refer LIC site for this data.
Hi Basu,
Firstly i should say thanx for giving a wonderful information about LIC and other insurances . You are solving many doubts regarding insurance. Hope you will clear my doubt also.
I’m Rohit , i need a small clarification about Jeevan Saral (Table no 165) . Actually , i’m paying 1021/- permonth to this policy and policy term is 35 years . Sum assured is 1,25,000.00 ..My doubt is that agent has given me a chart which show how much i will get after 10yrs . If i pay 1021 * 12 months * 10 years = 122520/- .This much of amount i will pay , then agent told me that i will get nearly 212900/- after 10 th year . I have a doubt that whether lic will give the amount figured or not ? if u want u can see this jeevan saral 165 table here (http://ramkrishnalic.blogspot.in/2012/07/lici-jeevan-saral-table-no-165.html) . So please can u clear my doubt..
Rohit-Thanks for your comments. Thanks for sharing the link too for the benefit of other readers. What he showed is considering 10% return on investment. But in reality I did the calculation considering today’s LIC LA for Jeevan Saral in few of the above comments. It is around 3% for 10 year policy. Even if you are long term investor (it is not a good word to say investment in insurance), you can expect in all probability around 6-7%. What your agent showed is predictions but reality is in-front of you, which I did calculation considering the current rates. Now the decision is left with you.
Hello Basu,
Thanks for ur comments..But still i have some more doubts..
can you tell me what is Mature Sum Assured in case of 1000/- per month for 10 years and how this is calcualted.
Similarly ,in my came i’m paying 1000/- permonths , can u tell me how much i will get after 10th year ?
Please tell in detail..
Rohit-MSA again depends on age, which you not mentioned in your comment. Hence unable to say the exact MSA. Regarding MSA calculation, refer above comments. I mentioned in detail. Even if you provide you age too, by considering the current LA, I am sure that returns will be around 3%.
Hi Basu ,
My age is 23, and i started my policy in aug 2012 .Pls can you tell how to calculate MSA ,tell in detail pls .and i have one doubt ,u told la is calcluated on MSA , given in bonus chart LA will be 300 per 1000rs of mSA..So please tell me the returns after 10years and also how to calculate this returns please
Rohit-LIC provided Basic Maturity Sum Assured for Ra.100 premium per month for all age group and available terms for each age group. Based on that we need to multiply it to your premium matching your age. In your case I considered data as Age-23 yrs, Term-10 years, Premium Rs.1,000 per month. For your age for 10 year period, LIC provided Basic Maturity Sum Assured as Rs.11,138. This amount is for each Rs.100 premium what you pay monthly. So for Rs.1,000 per month premium it will be Rs.1,11,380. This is MSA, which is guaranteed amount. Now LA for ten year Jeevan Saral is Rs.250 per Rs.1,000 MSA. So for Rs.1,11,380 it will be Rs.27,845.
Hence total amount you receive after 10 years (if we consider today’s Jeevan Saral LA) will be Rs.1,11,380+Rs.27,845=1,39,225. Return on investment will be 2.92%. Hope you now have clarity.
Thanks Basu for your valuable reply ..
Do u have any email id?
Rohit-Yes, you can reach me through basavaraj@basunivesh.com or tonhokrani@gmail.com.
Hi BasuNivesh my name is Ramesh.
My age 28 please tell good Lic policy…….
Ramesh-If really want to take insurance then first take term insurance to cover your life risk to the tune of 10-12 times of your yearly income and your current liabilities. Also without knowing full details about your financial life, it is immature to suggest out rightly. Hence you need any guidance then please mail me.
I just came across this page while surfing on net, coz like others i was also taken for a ride by these LIC agents who showed me that stupid 10 % chart. And after going through this whole page / article / views I am feeling quite sad, as last year only i took this Jeevan saral policy and premium is around 1,20,000 annually. I got little bit suspicious when I saw the policy bond but it was too late then. Basu Ji can you please advice me what should I do now !! And 5 – 6 % return means sum on maturity (20 years) will be half. Or can you please guide me how to calculate approximate loyalty benefits on my policy and secondly the bigger question…. WHAT SHOULD I DO NOW !!
Anxiously waiting or your reply
Kind regards
Rohit
Rohit-Thanks for endorsing my views on such low yielding policies. What agents show mandatory thing of 6% and 10% calculation will lead to believe that we can get 10% return from these policies. As you started your investment previous year, you have two choices. Either you discontinue from now itself thinking that you did bad decision (which I know very hard with the amount you invested), else continue at least for the mandatory period of 3-5 years then opt for surrender. Surrender values may be bit lower to your invested amount but at least you have some comfort that you got what you paid. Let me know your views too. Calculating LA was done in two to three comments, so you just refer those calculations.
hi, can you please tell me about Jeevan saral policy, with 165 table n 25 terms, n premium is 6005, i wanted to know about bonus.
Priya-Request you to look at above comments. In one or two comments I calculated the returns. If you still have doubts then please mail me with sharing the policy details like Term, Yly premium you are paying and the age when you took the policy. I will definitely guide you.
Sir,
Your response to each and every one in this forum is highly valuable. I wish to know about whether Bonus or LA is based on whole MSA or current year paying premium only.
Rajkumar-Thanks for your kind words. LA is based on Sum Assured for all plans except for Jeevan Saral, where it is based on Maturity Sum Assured. It is not at all connected with premium you are paying.
Thank you Sir. Now, I am clear.
Can u please, send me the circular on LA of jeevan saral on my id grajakumar@rediffmail.com
Rajkumar-Pleasure. LA of Jeevan Saral is not available differently. It is attached with LIC circular regarding the recent bonus declaration. LA rates are available in above table. Please look for the same. If you want then I can send whole circular for your mail.
Hi Nivesh, Appreciate your patience to provide information to many people. Here is a small request from me. Can you please the Bonus and Loyality fo the below given LIC plans to my emaild pmreddys@yahoo.com.
Jeevan Anand(T.No 149) : 20 yrs
Bima Gold(T.No 174) :20 yrs
Jeevan Varsha(T.No 196) : 9 yrs
Komal Jeevan(T.No 159) : 26 years
Madhava-Request you to look for above table.
Thanks a lot.
Rajkumar-Pleasure
Hi Basu,
Whats the difference between SA and MSA? Suppose I take a policy, say Jeevan Saral for 35 years and I surrender it after 10 years, how will the MSA be calculated?
Regards,
Karthik
Karthik-For all policies bonus is calculated on Sum Assured but only for Jeevan Saral bonus is calculated on MSA (which is guaranteed from LIC). Regarding calculation, please look at above comments where I mentioned in detail how MSA is calculated to one query. If still find difficult then let me know.
I took an LIC Jeevan Bhima 4 years back for 10 lakhs for a tenure of 16 years. My premium amount was around 49000. After 4 years, I will be getting 15% of the sum assured. That would be 1,50,000/-.
But few days back, I thought 10 lakh covergae is not enough and I went for a pure term insurance from ICICI. It had 1 crore cover for 30 years. The premium amount was around 13000 per year. I know this policy does not provide any survivor benefit. But I have an insurance coverage of 1 crore for 30 years (It was 10 lakhs for 16 years and 5 lakhs for another 8 years by LIC for a hefty premium of 49,000).
If the rest of the money 36000 (49000-13000) is invested in a simple investment options such as PPF, which provides an interest of 8.6%, I could have saved more money than I can get from LIC. If I had paid, 36000 per year (3000 per month) in PPF, after 16 years it should be around 1230552.61/-. If I had gone for more riskier options like equity the returns would be much more( Can expect 15% for 16 year horizon). More than that, I am getting life cover of 1 crore for 30 years from ICICI.
I read there is LOYALTY bonus after 16 years. How do you decide what is the LOYALTY additions? What are the factors deciding this LOYALTY additions? I might get the loyalty bonus, or might not get. It is not assured from what I understand. If the loyatly additions is good, then I think, I might consider going forward with this plan. Otherwise, is it even advisable to go forward with this plan? Please let me know your suggestions.
Backwatercruizpaul-Wonderful sharing about your planning. I completely agree with points you raised. Eventhough you continue with your existing LIC policy and we expect some good loyalty addition, then too returns on such endowment policies will hover between 6-8%. Hence stopping your current LIC and diverting the same amount to term plan and PPF (if totally risk averse) or equity investment is good option. Even you can add around 10-15% into gold also (in gold etf, gold mutual funds or e-gold).
Hope other readers of this blog will follow the way you planned yourself so simply.
Please send a soft copy of LIC Jeevan Saral Loyaty circular on jay02101976@yahoo.co.in
Jay-Their is not that much data to send only Jeevan Saral LA as LIC declared only for 10th and 11th year policies. Hence you get that information in above table.
Hi Can you please send me details of loyalty adition particularly that of Jeevan Shree and New Bima Kiran,my e-mail drrjsarma@gmail.com
Sarma-I am unable to send separate LA details of each LIC policies. If you need I will send the whole circular for your reference. Let me know.
Sorry I logged in only today,please do send me the whole circular,e-mailid drrjsarma@gmail.com,appreciate your selfless service for others and your prompt reply to each query
Sarma-Thanks for your loving words
Will send now.
Jay-Done.
Basu, Can you please send the circular to vamsi.vallurik@gmail.com?
Karthi-Done.
Thanks Basu
Karthik-You are welcome
Hi Basu, I have bought a LIC policy New Bima Gold, for tenure of 20 years, Insurance coverage of 15Lk, premium of 54563. As per my information, I will be getting 10% of SA, i.e 1.5 lk at the end of 4th,8th,12th and 16th years.
What will be my MSA in this case.
Thanks
Amit
Amit-New Bima Gold is the money back plan where MSA will not come into picture. Yes what you told regarding the payout for 4th,8th,12,16th years is right. On 20th year, you will receive as below.
Rs.10,91,260 (premiums you paid during 20 years)-Accidental Benefit rider what you paid during that period (which I dont know, but it is negligible, so I am not considering as of now)-Rs.6,00,000 (Which is already paid to you on 4th,8th,12th and 16th yrs)=Rs.4,91,260. Above this if LIC declares any Loyalty Addition for this policy then that you will receive which is one time payment at the end. But as of now LIC not declared LA for this policy. Hence I have not included that.
Hope this calculation will be understandable to you.
Hi Basu,
Thanks for the prompt reply. Yes, LA is also included in the deal.
If possible please give some information how LA is calculated.
Thanks in Advance
Amit
Amit-LA once declared will be based on Sum Assured. Suppose they declared Rs.200 as LA in your case, then this LA is per Rs.1,000 Sum Assured. So you need to multiply this LA with the Sum Assured you opted and answer should be divided by Rs.1,000.
Hi Basu, I have read all ur comments & they have been really informative. I have got a few querries & I would be grateful, if u could answer them one by one. 1) I have got a Jeevan Saral policy of 25 years (which I bought at the age of 38) @ Rs. 12,000/= p.a. Considering the LA announced by LIC for 2012-13, what would be the total amount which I would be getting, if suppose I was to end my policy after completion of 11 years. Please give me the detailed break-up of my benefits (after taking into account my age at the time of purchasing the policy). 2) Is the MSA different for different ages at the time of purchase of policy & then what should be the MSA, in my case?? 3) Is the LA paid only once, i.e. at the time of maturity of the policy or at the time of exit from the policy after 10 years……or it keeps on adding every year after completion of 10 years of the policy…like in the case of bonus?? 4) Are the figures available now with you for LA in case of Jeevan Saral for policies of 12 years & more for the year 2012-13? 5) What is the LA rate for 25 year policies for the year 2012-13??
You can post ur replies to my querries at: mohitroy60@yahoo.com
Thanks in advance,
Mohit
Mohit-My answers are as below.
1) Request you contact the nearest branch for this calculation. Because it includes lot of things which I can’t do on this platform. Hence if you visit nearest branch they will tell you exact amount.
2) Yes for each age MSA differ. In your case MSA is Rs.3,22,460.
3)Unlike bonus which declared every year and added to your policy, LA is one time payout at the end of maturity.
4) No as of now I dont have data to show LA of more than 11 years.
5) Please refer my answer to No.4. I calculated the rest of years assuming the same trend of Rs.50 increase of LA for each year.
Basu, I have got another querry please….Does the rate of LA in case of Jeevan Saral differ as per the policy term….or is it only dependent upon how many years I am continuing with the policy (i.e whether I am withdrawing from the policy after 10 years or 11 or 15 years….even when in all these cases my original term of policy being 25 years). Please try to clarify my points…replies me at: mohitroy60@yahoo.com
Thanx again,
Mohit
Mohit-Yes LA differs with tenure of the policy. Suppose you discontinued your policy after 10 years then they consider your policy as if 10 years tenure policy and they will consider 10 yr LA for Surrender Calculation. So if you are discontinu 25 years tenure policy after 15th year they will treat it as if this policy term as 15 year and consider LA accordingly.
I am male 46 years, I want to take Jeevan Amrit policy for Rs 1 lakh SA and premium paying period 3 yrs – pl let me know the premium to be paid and approximate survival (maturity) benefit at the end of 15 years.
Balaji-May I know the reason for opting this plan?
jus that i dont wanna longer commitment, and getting dual benefits of risk coverage and some return on survival, thats all Mr. Basu!
Balaji-Nice to hear
Bonus on this policy as of now is Rs.30 per Rs.1,000 Sum Assured. So if you took 15 years policy, every year they will add around Rs.3,000 (calculated as per current rates) as bonus till the 15 year. At end you will receive Rs.45,000 as bonus+whatever premium you paid.
Now think yourself seriously the sum assured you opted (Rs.1,00,000) is actually fulfill your insurance need? I mean to say that, if something happens to you during this coming 15 years, will that Rs.1,00,000 suffice your family to survive without you? Second thing, what will be the value of today’s Rs.1,00,000 after 15 years? If we consider inflation rate of around 6% the current value of what you receive from LIC after 15 years is just Rs.60,000 (I considered approximately Rs.1,45,000 return from your LIC policy after 15 years). How many months will you survive with this Rs.60,000 today?
Please think and decide.
i think bonus will be paid on premium paid and not on sum assured, in this case
Mljain-Yes it is not for Sum Assured which is the usual case, but on premium we pay. In that case your return of bonus will again decrease. So you may expect lesser returns than what I quoted above. Thanks for updates
dear sir,i am 30 year,paying 30000 premium per annum premium of jeevan saral from 4 year,my term is 25 yr,may i know what will be surrender value after 10,15 and 20 yrs.thanking u in advance
Bagban-Please refer above comments. Above I did calculation considering different terms for few of quarries. If you still find difficulty then let me know.
how calculation of rate of bonus per 1000 sum assured is done.
Anand-LIC distribute it’s profit in the name of bonus to policy holders every year. This depends on LIC. They usually declare bonus per Rs.1,000 Sum Assured.
Hi there,
I have a Jeevan Anand (Plan no 149) policy for which I am planning to pick up a surrender value or paid up option.
Details given below -
Policy start date: 24th Aug 2008.
Annual premium: Rs. 34,801
Premium payment term: 16 yrs
Sum assured: Rs. 5,00,000
So in total, I have paid 5 premiums for this policy till now.
Please could you guide me on what should I do with this policy?
Thanks in advance!
Ravindran-If this premium constitutes around 10-15% of your investment portfolio then continue paying. If it is more than that then better to discontinue. Contact nearest branch regarding the exact amount you get if you surrender.
Hi Basu
Wanted to ask your reviews about RGESS.
Also, can you please forward me the soft copy of the LIC circular? My email ID: ravinandan.dubey@gmail.com.
Thanks very much in advance!
Cheers
Ravindran- Please check my post “Rajiv Gandhi Equity Saving Scheme (RGESS)-Really push equity investment?”. If you still found any doubts then request you to post the comment below that post only. I will send you LIC circular.
Hi Basu,Please do send me the circular,my e-mail drrjsarma@gmail.com
Hi Mr.Basu,
Got to see this blog of yours. It is indeed a nice table you have prepared.
As far as Jeevan Saral’s Loyalty Bonus is concerned, the Bonus Circular mentions that it is only for Death Claims which happens within the 10 Years. And as you know, Jeevan Saral’s Loyalty Additions are entitled for Maturity (or) Surrender only after 10 Years. Jeevan Saral was launched in 2004-2005. So the first Loyalty Additions w.r.t Maturity/Surrender will be declared only in the year 2014-2015. So the Loyalty Bonus mentioned here is only for those death claims which happen in the current year i.e. Rs.250 Loyalty Bonus is used for calculating the Death Claim Loyalty Bonus in the Year 2010-2011. The Minimum Term for Maturity for Jeevan Saral is only 10 Years and the very First Jeevan Saral policy would mature only in 2015. Then how can this mentioned Loyalty Bonus Rate be used for calculating maturity amount like you have done? It is clearly mentioned in the Circular as “For DEATH CLAIMS Only”.
For e.g., If a person of Age 24 has taken a policy for Rs.5,00,000 with an annual premium of Rs.24,000 for a Term of 10 Years in the Year 2005, his MSA is Rs.557520. If he dies in the 5th Year (i.e. 2010), then the releavant Death Claim Loyalty Bonus declared is Rs.250 per 1000 MSA. His Death Claim would be Rs.5,00,000 + Rs.96,000 (Return of Premium minus First Year Premium) + Rs.1,39,380 (Loyalty Bonus Rs.250 per 1000 MSA for the Death Claim for a Term of 10 Years) = Rs.7,35,380.
I again repeat, the Loyalty Bonus mentioned is only for Death Claim and not for Maturity/Surrender as you cannot surrender/mature Jeevan Saral till 2015. And one surrenders before 10 years is not eligible to get the Loyalty Bonus.
Please read the articles written by Mr.Ramakrishnan (Chief Actuary) who designed this product. He has clearly explained about the Loyalty Addition Calculations. The above mentioned policy is my own policy that I took when I was 24. As a person, who do not believe in salesman (including you as you told you are an LIC Agent too), I made the research on this product before investing by reading various paper clippings and articles written by Actuaries.
Thank You.
Gowrishankar-Thanks for your wonderful comment and the knowledge sharing you did. We consider above LA only for death claims, then do you think actual LA will differ than these LA? I think no…because in LIC their is no such option where LA or usual bonus rates are differ for death claims and for maturity claims. Hence what I calculated above is considering above LA and presuming the future LAs increasing in the same order (10th year and 11th year difference). Even we consider higher LA rate for Jeevan Saral, do you think it will surpass other traditional plans which usually offer around 6-8%? Considering the expense ratios which are usually hidden in traditional plans (for example for agents in Jeevan Saral commission will be 35% for first year, 7.5% for 2&3 yrs and 5% thereafter) will you believe this plan will generate huge returns which are beyond bank FDs and PPF kind of instruments?
Waiting for your reply….
Mr.Basu,
All Traditional Plans like PPF, Recurring Deposit, Traditional LIC Policies provide Benefits on a Longer Run. We cannot compare it with FD as it works on Single Time Investment.
Consider Recurring Deposit provides 8% Annual Growth. It provides No Life Insurance Coverage. To add-on, we have to take a Term Plan to provide ourselves Life Cover. Adding the Term Plan Premium, Tax on Returns, then Net Returns would be only 6.3%. This is when considered 10% Taxation on Interest. If we miss to mention our PAN No. to the Bank, then it is 20%. And if our Honorable FM changes the Rules as “Interest to be shown as a part of Interest Income, then the Taxation would be based on our I.T. Slabs which could be even 30%.”. Though it provides liquidity, I will have to bear the penalty on Interest Rates.
Coming to Public Provident Fund, I am huge fan of it. But I do not consider this as the best out of the lot. Again if we take the Life Insurance through Term Plan (for my present age of 30) as add-on, then the Net Returns come to 7.4% from PPF and not usual 8.5%. When we calculate projected returns for PPF, we strongly believe that the PPF returns would be 8.5%. But when we look into the history of PPF, the Returns used to be 11-12% in early 2000′s and been fluctuating between 8-9% since then and has come to 8.6% till last year, which is 33% fall in interest in the last 12 years. So considering the same trend as you assume in Jeevan Saral, the Interest Rate of PPF would be 6% or lesser after another 10 Years.
PPF cannot be touched till 15 Years. So considering the same duration in Jeevan Saral, with the same conservative growth trend, we can expect a 7% Growth in 15 Years. And Net Returns of PPF would be 7.5%. I cannot think much on this 0.5% difference. As a diversified investor, I choose to invest both in PPF and Jeevan Saral. With the same trend and looking into the Loyalty Additions Trend in the other plans shown in the circular, at the end of 20 Years, the Loyalty Additions of Jeevan Saral would be Rs.1050 or Rs.1100, which will be a considerable growth for a traditional plan.
I believe there will be definitely a variation in calculation for Death Claim and Maturity Benefit for the first ten years. Because, logically, even if the death occurs in the 10th Year or in the 5th Year, the Bonus is taken for only 10 Years Term MSA. Since the Death Claim bonus is declared now for 5th Year Deaths (since 2005 in 2010), there is no separate MSA for 5th Year as the Term is minimum 10 Years. So it has to be a lesser Bonus to compensate the difference. But even if we overrule this blind assumption, with the same trend or growth in the Loyalty Bonus, at the end of 20 Years, we can expect as per I have mentioned above.
Take a call.
Gowrishankar-I agree with the points you raised with PPF and RDs. Do you know that 50 bps point difference between PPF and Jeevan Saral means a huge difference when you look at long term perspective. Just for your comparison visit this link and do calculate yourself http://freefincal.wordpress.com Eventhough this calculation is about Mutual Funds, but you will get a fair idea about the difference. He is my friend and a wonderful guy who created lots of such calculators on his blog. I totally agree too that their is interest rate risk in such products. But can you share me the Sum Assured you opted for your Jeevan Saral plan? Is it really fulfills your insurance need?
Now regarding choosing PPF and Jeevan Saral-How many investors actually know what % of their portfolio is actually going towards such debt type products? Neither agents share that knowledge with clients nor the poor investors. Every agent is ready to grab the highest premium without bothering the % of portfolio client is going to invest. In such a case will investors lead a happy financial life with beating inflation? While mentioning the expense ratio of endowment plans I just mentioned agents commission but after that their is DOs commission(new business commission), maintenance changes and investment charges. Considering these expenses do you know how much return your money need to generate to compensate these expenses and give your expected decent return of around 8% ? It is more than 20 yrs equity return. Will it generate?
Regarding the product design of the experienced guy, he may have declared MSA but LA is not under his limit. LA depends on LIC’s return and how much they declare. Hence going with actuaries is not worth, instead think how much you get from this investment.
For 20 yrs Jeevan Saral returns, just look at above few comments. I mentioned the same returns of around 8%. I am not against any LIC products but who will teach the investor not to go beyond certain limit of their portfolio considering the low return factor?
Hope I satisfied your points
Keep commenting. I need such a wonderful guys who eager to share and ready for healthy debate.
I agree. But it is the responsibility of the investor to analyse the professional qualification of the agent before choosing to go by his advice. I am sure only 1 out of 10 would do that. The rest would go by obligation or tax purpose. Then why to blame the agent or the product? Think from the point of view of an agent who had just finished 12th Class. His main aim is to promote the best product of LIC (as told by his manager) and get his income. He cannot analyse the need of the insurance or do a financial planning for himself, then doing for his clients is out of question.
How many investors do a capital net-worth analysis or even a basic analysis before deciding how much insurance they should go for? How many people know or bother to build a risk appetite? And for a person who is blindly investing going by his agent’s words, whether he chooses PPF or RD or Jeevan Saral, all mean the same.
For one who is investing Rs.6000 per month in PPF and Jeevan Saral each, going by the same trend in the returns, at the end of 20 years Jeevan Saral (7.5%) would provide about 2-3Lakhs lesser than what he would get in PPF. But with the provision of Life Insurance (increasing due to ROP), this difference will not matter much. And for a person who is investing Rs.1000 per month, this difference is even lesser and should not matter much.
Gowrishankar-Thanks for endorsing my views. Agents who only look for the growth of their business may sustain for few days of their profession, but in long run it is the agent who cares for investors will be winner. As I told in above comment, I am also agent of LIC. But I never forced client to purchase any product and before recommending any product I share what is good and bad about that particular product. If clients ready then only move. In my view no product on this earth is good or bad. Each product have it’s own advantages and disadvantages and suites to particular need. So analyzing before proceeding is not happening now. Panacea for this is education and financial planning literacy which is currently missing even in so called highly educated people. So sad to say….
dear mr. basu,
jeevan saral will definitely give better returns because,the tax whichL I C pays every year on their products, they need not pay tax (i.e.5% %) on profit in case of jeevan saral every year and the said savings is ploughed back to generate more revenues till maturity and ultimately can give better returns to policy holders( then any other traditional plans ), since tax is to be paid once only in case of jeevan saral. Your comments pl…
MLJAIN-Can you confirm where they mentioned that they are not going to pay tax for this particular plan? If we consider that as special exemption for this plan too, then why they declared so low LA for 10th and 11th year of policy? It was started in the year of 2004 (almost 9 years back). So what difference they showed in terms of return by taking advantage of this 5% tax exemption? Govt is making LIC a scapegoat especially for dis-investment issue. Until and unless it is out of such Govt hindrance we can’t expect a good performance by LIC. Let us hope for the best
i give below an article, which will give the reply u asked for
It is Technical difficult to combine regular yearly bonus with the flexibility built in LIC JEEVAN SARAL. So the concept of Loyalty Addition has been introduced instead of the regular bonus. There is lot of myth about Loyalty Addition that going by the experience of recent years, that amount given by the ways of Loyalty Addition may be negligible. It will be not so in the case of LIC JEEVAN SARAL. Actuarial analysis will show that the actual Loyalty Addition that can be paid will not be less than the total regular bonus payable on death claim, surrender or maturity.
It is only a change of concept. The policyholder will be the ultimate gainer by this change of concept. One has to keep the policy in force only for ten years, and not till maturity, to be eligible for Loyalty Additions. Freedom has been given to surrender the policy at any time after 10yrs without any loss.
Determination of Loyalty Addition
Consider an average Jeevan Saral Policy, with a monthly premium of Rs 4000/-( i.e. annual premium of Rs 48000/-) The Sum assured under this policy will be Rs 10,00,000. Let the age of this policyholder be 38. During the first year, the risk cover will be for Rs 10,00,000 and one year term assurance premium for this risk cover will be about Rs 1390 (Rs 1.39 for 1000). During the second year, the risk cover will be for ( Sum Assured + one year’s premium). i.e. Rs 10,48,000 and the age will be 39. So one year term premium for this risk cover will be for (sum assured + 2 yrs premiums) i.e. Rs 10,96,000. And the age will be 37. The one year term premium for the risk cover will be about Rs 1750. Thus the premium for the risk cover appears to go on increasing because of increase in age and also increase in amount of claim payable on death.
But the above working ignores the fund accumulating in the account of the policyholder. At the beginning of each year, Rs 48000 is received from the policyholder. After meeting the marketing expenses, administrative expenses and also the mortality charges the balance premium left get accumulated with interest. For example at the end of the 17th year, the fund to the credit of the policy holder will be about 12,00,000. If the death occurs during the 18th year, the amount of claim payable will be Rs 12,00,000 + 17yrs premium = Rs 20,16,000. Since there is already a fund of Rs 12,00,000 to the credit of the policyholder, the real risk to the corporation is only to the extent of Rs 8,16,000. In fact after few years, the sum at risk (Amount payable on death LESS Fund to the credit of the policy holder) will start reducing gradually. While because of Increase in age, the premium chargeable per Rs 1000 risk cover will be increasing, the sum at risk will be decreasing. Due to combine effect, the premium chargeable for risk cover may even start decreasing after a certain stage.
So the above illustration shows that with longer period of LIC JEEVAN SARAL policy, the corporation’s liability decreases and premium can be further invested to provide more benefits to LIC POLICY holders.
LIC has to pay income tax every year on the bonus amount declared on all with profit plans but since there is no bonus declared every year in LIC JEEVAN SARAL so income tax is also saved and reinvested to provide more profit to LIC POLICY holder by the means of Loyalty Addition.
LIC has to pay 5% of the amount of bonus declared every year to the central government that is also saved and reinvested to provide more profit to LIC POLICY holder by the means of Loyalty Addition.
In LIC with bonus plans, on death claims or on paid up policies even before 10yrs, LIC pays Sum Assured + bonus of the all the yrs (from the date of commencement) but in LIC JEEVAN SARAL since there is no loyalty addition before 10yrs, the money saved in this way is again reinvested to provide more profit to the LIC POLICY holder who run their policies for 10yrs or more by the means of Loyalty Addition.
The premium amount received in LIC JEEVAN SARAL plan will be invested for longer period. Hence the yield of the investment of premium amount of Jeevan Saral Plan will be higher than under endowment plans on those the bonus is declared every year and paid on death claim and surrender of policies.
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Posted in Life Insurance Industry News | Tagged jeevan saral loyalty, jeevan saral loyalty addition, lic jeevan saral loyalty addition, lic jeevan saral loyalty bonus, loyalty addition, loyalty addition in jeevan saral, loyalty addition in lic, what is loyalty addition in lic jeevan saral | 2 Replies
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Mangi Lal Jain-Thanks for sharing. Can you elaborate why the LA of 10th and 11th years is so low when they are claiming that Jeevan Saral have additional above features? Also for comparison of Term Insurance premium, which plan they selected? Is it from LIC or other insurer? For your information LIC’s term plans are costliest in India.
How many (rupees) Loyalty Additions of jeevan saral policy on maturity payment.pl.reply….
Shankar Lal-Can you elaborate what information you need?
I have OLD Jeevan Shree Policy….
Can u please give info about this old Policy (Not Jeevan Shree 1)
There is a lot of confusion about Jeevan shree Old & new Policy
Thanx & Regards,
Anand purohit
Anand-What information you want?
Thanx for your quick response
I take this policy in 1999 & i have only policy 5,00,000
i want to know the final benefits
& what is loyalty addition ?
& what i get after 25 years
My agent told me that you got around 18,00,000 after 25 yrs
but idont have any detail about this on paper
i pay premium around 25,750 Approx Per annum
Anand-This was the hot cake policy of LIC which mopped huge cash during the time of it’s closure. It offered Rs.75 guaranteed addition throughout the policy period which is highly impossible in current scenario. Now the returns about this policy, you will get Rs.5,00,000 (SA)+Rs.9,37,500(Bonus)=Rs.14,37,500 is assured. I am not sure about the loyalty addition of this policy. Because I dont have any information about this plan feature in detail. Overall it was a good plan.
Thanks Mr Basu
for your valuable knowledge about Money Management
Anand-Thanks
Hope you enjoy my all past and future postings too and share with your friends and relatives.
Hi Basu,
I am interested in taking up a Insurance policy for myself as i don’t have one, I think Jeevan Anand would be a right fit, Can i request you to mail me a breakup chart for this policy (Yearly premium and bonus i would get on maturity) planning to insure for a sum of 10 lakhs for 22 years… Please let me know if you need more details …
Many Thanks in advance ..
Suresh-Can you let me know the reason for going for Jeevan Anand? Also share your all details like your current investment status, future financial goals, your current age and your income and expenses to my mail id. Merely by your interest of opting for Jeevan Anand means I can’t say it actually suites you are not. Hence send all details.
Hi basu,
Im 26 year male. i have taken jeevan saral for 20 year. premium 1000 Rs per month .
please give me the details of taotal amount at the 20 year maturity .
Anvi-Please go through above comments. It will be around 6-8% of return what you get from this policy (if we considered current LA trend of Jeevan Saral).
Hello basu
im having LIC bima gold policy
Monthly premium – 1500/- RS
Total year – 20
sum assured – 500000/-
Please give me the total sum at maturity
Vikram-Please clarify which Bima Gold-new one or old.
Hi Basu,
I have LIC Jeevan Shree (T.No # 112) which I have taken in Jan 2002 with 5,00,000 Sum assured.Could you please let me know approx maturity amount ?
Policy Term : 25
Premium : 24,593
Thanks for your help,
Karthik
Karthik-Please look at one of the above comment where I replied to the similar query.
Thanks Basu,could you please send me a copy of circular you’ve mentioned.Thanks for your help.
Karthik-Will send you.
Hi Basu,
I want to ask that in jeevan anand policy shows a fab+bonus+la .but in jeevan saral only la
So if we assume LIC give a equal output in each policy then we can assume that Jeevan anand output(fab+bonus+la) is equal to jeevan saral(la).
And i have noticed in above la in jeevan saral is far more and more from other policy.
Actually what it is?can you please help me to understand this.
Rahul
Rahul-Each policy’s features and return differs. You can compare for your calculation. Hence for Jeevan Anand it is FAB+Bonus+LA is depend on that plan feature which you can’t say why not with Jeevan Saral. LIC will not give equal output to all policies, it depend on how much they generate from the accumulated amount from each policies. I did not get your point “And i have noticed in above la in jeevan saral is far more and more from other policy.”. Features of Jeevan Saral is different with Jeevan Anand. Hence look at it’s features and return then if it suites you then only better to go for any product.
Thanks bishu……..but i want to know that in above table you mention only bonus rate for jeevan anand didnot mention la for jeevan anand?.
I have already did a one policy that is jeevan saral and when i read your comments then feel it not give a gud return when i visit to any agent everybody said that jeevan anand is best that jeevan sarl becoz jeevan anand give all three (FBA+Bonus+LA) and jeevan saral give only (LA) but i note in above bonus rate in Jeevan saral LA is 250 or 300.
So is it right?in jeevan anand how much la give after maturity?on basis of assumption.
rahul
Rahul-Thats what I told. Each policy’s premium, features and returns differ. For your information, Jeevan Anand have only Bonus+FAB but it not contains LA. Even if it have also, it is impractical to compare product by Bonus+LA+FBA is good than product only have LA. What if the declared bonus and fab are not on higher side than Jeevan Saral’s LA? Hence dont go only by looking at what additions they are offering with normal bonus like FAB or LA but look at your need…especially insurance need. Will it cover your insurance need is the first question you need to ask yourself. For how many years your dependents survive on this claim amount if something happens to you? Think and decide
thanks basu again for guiding me…….yes u right,actually i am luking towards growth oriented plan thats why……
so please suggest me i have planned to add a term plan and also wantto invest in ELSS through SIP.so please can you suggest me which is suitable for me or wait for next financial year starting??
And i have already invest Rs 6000 in jeevan saral for 20 years so till 2022 can we expect a good LA by LIC?what u think abut it?All lic agent shows a 10 % return ,thats why i bound in that policy…..and so much fear about its return.If return is not gud then again i need to think abut my portfolio.
Rahul
Rahul-You send me your personal queries to my mail by sharing details like your age, current financial status like income, expenditure, loans and current savings. Then only I am in a better position to guide you. This platform is not suitable for specific financial planning.
Hi Basu,
Do we get FAB for table 14 for 16 years term SA is 6Lakhs,
i am paying 37067/- per annum i have taken policy for 16 years and my dob is 11-04-1984.How much i could get after 16 years.
My Agent told me that i will get 17+ lakhs after 16 years.
Is this true ?
Please suggest me.
Mahesh-Yes you will get FAB for Table No.14 for 16 years of term (if premiums are paid more than 16 years). Returns from this policy can be calculated as below.
You get Sum Assured+Bonus+FAB at maturity. Currently bonus rate for this policy for 16 yrs term is Rs.42 per Rs.1,000 Sum Assured. If we consider the same trend for our future calculation then total bonus you get from this policy will be Rs.4,03,200. FAB as of now is Rs.25 per Rs.1,000 Sum Assured which is one time payment. Hence FAB will be Rs.15,000. Hence you will get around Rs.10,18,200. Return on investment will be 6.81%. Less than normal PPF investment
If we consider the returns what your agent quoted then it will be 12.80%. If he is so confident and ready to give me the assurance with some valid proof either from LIC or from him, then I request you to tell him to contact me. I am ready to invest and ready to give good number of business. Which ultimately makes him crorepati
Hello,
I have taken policy Table no. 14 in the year 2004 for 10 years & last premium of Rs. 7821 is due in March, 2013
Tenure 10 years, premium 7821 per year, sum assured 75000
what will be maturity value in 2014 ?
Rajesh-You will get Sum Assured (Rs.75,000)+Bonus (Rs.25,500-Calculated considering bonus rates which is Rs.34 per Rs.1,000 Sum Assured policies whose term is less than 11 years)=Total amount you get is Rs.1,00,500. Return on investment will be 5.45%
hi,BASU…i want 2 do a policy of sum assured 5 lacs…plz sugest a high return policy…
my age is 31
Bijay-May I know the reason of opting Rs.5,00,000 sum assured?
Hello Basuji,
I was lucky enough to read your valuable comments provided to various readers. I would like to ask your opinion on my two policies.
1) Jeevan Shree – 1 SA is 700000 and PPT is 8 years for policy term of 25 years, i just want to know that this policy is 3 years old can i avail a loan from it, if yes then what will be approx loan amount. I understand that current LIC rate of int is 10%.
2) I have taken a Whole life policy single premium for the SA of 500000 just 6 months back. Now i regret this dicision or shall i surrender this policy or invested that money in some debt instrument.
Regards,
Abraham
Abraham-Thanks for your kind words.
1) Yes you can avail loan from this policy. But regarding the exact amount of loan availability, it is better to contact your nearest or servicing branch.
2) Please request you to surrender immediately and take term plan to cover your life risk first then invest the rest of the amount according to your goal and risk appetite.
for secure life also tax benefits
Bijay-Wonderful reply. For your information high return is always directly proportional to high risk. In one way you are saying secure life but in above comment you are asking for high return. Please be specific whether you want high return or secure return??
Dear Basuji, Thanks for the prompt reply. I forgot to mention that i already have a term plan from LIC Jeevan Amirt for a good amount and the term selected was 30 and ppt was 3 years. then i thought that this will be finished after 30 years so took whole life policy table 8 single premium.
I already have term plan then also u suggest me to surrender whole life policy and take another term plan.
Regards,
Abraham
Abraham-Thanks for sharing. For your information, Jeevan Amrit is not the pure term plan product. This is the plan where initial chosen (3rd, 4th or 5th) years premium will be higher and subsequently premium goes down till the maturity period. This is again a combination of insurance+investment product. Please think yourself, the sum assured you chosen (you mentioned good amount now, but will it be good amount after 30 years??) will cover your family to the next 10-12 years without any financial burden in the event of your death? This is the traditional plan, so returns will be around 6-8%. Will you be able to beat the inflation by such kind of low yielding product? I am not saying this plan is bad. But it is not wise to invest major portion of your portfolio. You need to treat this product as if debt investment.
HI , I found this page quite interesting as just last year someone told me about this Jeevan saral and showed me that chart with 10% calculation. I also invested around 1,00,000 ( 1 Lac) each year and I have taken it for 30 years.Can you please suggest connsidering my age as 30 Years as of today , what will be the Maturity Sum Assured after 11 years for me ?
Please provide your valuable inputs so I will plan to drop this policy after 5 years if gain is not there
Nitin-What your agent showed of 10% return is illustrative example to show the benefit of plan. This is mandatory as per IRDA to show both 6% and 10% return benefit. But it does not mean that it will generate 10% return. In all probability if we calculate considering the current trend of LA, we can presume that it will give you around 6-8% return. Hence it is better to stop it after 5 years.
dear,basu,
plz explain about both…
Bijay-Don’t be generic. Set your financial goals today and based on that it is better to plan your investment. It is not wise to take the risk for your short term goal and in the same way it is not prudent to put all your money into safe investments for long term goals. Hence if you share your financial goals, current investment and your cash flows then I am in a better position to share the ideas.
Hi basu,
Can you please mail me the chart. I am not able to understand how to calculate LA and MSA. My policy details are–
policy name : jeevan saral.
policy term : 16 years.
Yearly instalment : Rs 48040.
Can you tell me how to calculate the complete amount which i would be getting after 16 years? I went thru the comments but didnt get how to calculate the amount at maturity. Are BONUS and LA different things?? Lets consider the interest rate to be 5 percent. Is this feasible ?? Please tell how to calculate BONUS and LA.
Email id- Jainnikhil28@gmail.com.
Thanks
Nikhil.
Nikhil-MSA of Jeevan Saral is available with any agents. So for the particular age, premium payment and tenure of the policy, you easily get it MSA. In Jeevan Saral LA will be additional benefit which you get over and above MSA. This LA is currently declared for 10th and 11 yrs policies. So considering the same trend of LA we can assume the returns on your 16 yrs policy will be around 6-8%. Calculation of LA was done on the same base, which you can see from above comments. Yes, bonus and LA is differ. For Jeevan Saral their is no bonus but only LA which is one time payout where as bonus will be added to your policy whenever insurer declares (normally yearly). Regarding the feasibility of 5% interest, it is achievable easily as you can expect around 6-8% from this policy. But will it be feasible to have such low returns to meet your financial goals over the period of 16 yrs? Certainly not. Think and decide.
Thanks. Indeed not a good choice. But how did you calculate LA? I didnt get that. Can you please calculate LA for me for the details provided sir? Lets say the interest is 6%.
Thank you.
Nikhil-Hope yesterday’s Facebook chat cleared your all doubts.
Very Nice Article, Can you send me the email of the bonus as it is still not on the LIC website.
Thanks
ritesh
riteshcalcutta@gmail.com
Ritesh-Thanks and will send the circular.
Hi Basu,
My friend’s DOB is 19-12-1983, he wants to pay 34-40K every year for 10 years and wants Pension from 60 years to 100
please let me know any good LIC Plan.
Mahesh-I need few more data like his current household expenses and his lifestyle he want to maintain at the time of retirement. Also why you are asking on behalf of your friend? Let him come forward share his doubt. I will definitely help him. Please do share those details to my official mail id.
Sure , i will ask him to send u the details..
Mahesh-Thanks
Hi Basu, can you send the circular for Jeevan Shree to mathewkv1969@gmail.com
Mathew-What circular you want?
Hi basu,
i am R.Ramakrishna age 28 now. I have done jeevan sarala policy in 2012. I am paying 24000/- per year.Can u tell me how much i will get after 10 years i.e. in 2022 if i surrender .
Ramakrishna-Request you go through above comments. I did calculation.
Hi Basu,
Hope you are doing well. Please suggest if its correct or not:
My Friends Cousin who is an LIC agent suggested him LIC table No.186 Jeevan Amrit Sum assure 1000000 Term 15years premium paying term 5years total premium in 5 years would be 1,10,000. On maturity he will receive 30 (revisionary bonus)x15 years x 1000= 450000+110000=560000. In case, this is not true than how should the maturity be calculated in this policy and how much return he will get actually get at maturity as per current bonus rate.What is current FAB on This Policy.
Your response would be highly appreciated.
Regards,
Aalok
Aalok-Sorry for delayed reply. As you not mentioned your age, I took the example of 25 yrs old guy who is looking to buy the above plan. For him considering above data, premium will come Rs.57,079 for first year and for the next four years it is yearly Rs.14,282. So overall you are paying is Rs.1,14,207.
In Jeevan Amirt plan on maturity you will get Total Premium you paid+Revisionary Bonus+FAB (If declared by LIC). So if we consider the same bonus rate then for total 15 years bonus will be Rs.4,50,000. So total you get around Rs.4,50,000+Rs.1,14,207+ FAB if any (which is usually in thousands, hence I neglected)=Rs.5,64,207. Return on investment is 12%. But dont think this bonus is fixed it fluctuate on yearly base. Also think whether the said life risk is sufficient to cover your financial liabilities if something happens to you. Currently I dont have any idea about FAB of this policy. If they declare too it is negligible (in thousands).
Hello Basu Sir. how r u? can u pls send me the bonus & loyalty rate circular of 2012 on poonamchudasama@gmail.com…….
Regards
Poonam Chudasama.
Poonam-Done.
DO U ADVICE TO CONTINUE WITH JIVAN SARAL PLAN , HOW MUCH IS SURRENDER VALUE AFTER 4 YEARS , PARTIAL WIDRAWAL IS AVAILABLE ?
Pravinkumar-Continuation decision entirely depends on you. Look at above comments, if you are ok with the kind of return this policy may generate then continue. Instead of surrendering the policy after 4 years, it is better to surrender after 5 years.
Basu,,, last time… we commented on jeevab saral….i remembered u told me ki,,u had same policy against ur name
Ur plan of action,, what are u thinking … to terminate it or continue???
Nagaraj-We might, but I never told anywhere that I have that policy. I might have told about wholelife policy but not about Saral.
i want to invest in jeewan saral plan my age is 34 i think 20000per year for 20 years can you tell me how much amount i will receive after 20years
Sumit-Please refer above comments. You will get a better idea.
Mr Rupinder,
Do not mix insurance with investment,just buy a term insurance and invest reamining amount of your premium payable amount in good balanced and equity diversified funds. Returns will be much higher and tex free too.
hello sir plz tell me how i calculate maturity value of lic plans if i want to buy how bonus and LA make maturity value
iam planing to buy komal jeevan for m 2 y baby for 2 lac send me at chikguglee1@yahoo.com
Preeti-Bonus calculation is usually per Rs.1,000 Sum Assured you chosen. So suppose if a plan have bonus of Rs.50 per Rs.1,000 Sum Assured per year, then if your Sum Assured is Rs.5,00,000, in that case you will get (Rs.5,00,000*50)/1,000 which is Rs.25,000 will be your earning from this policy per year. But this you will get on maturity. Also remember that this bonus rates changes every year. So never assume that the same will apply for future too. LA-It is calculated in the same way as of Bonus but it will be paid only once on maturity. Hence bonus is yearly return but LA will be one time return and you get both at the end of policy or in case of death claims. Hope you understood what I described. If you have still doubt then you can raise it.
sir how i calculate maturity value for lic plan i want to understand how to calculate final value from LA and bonus
Rupinder-Please look at my reply to Preeti.
i want to buy komal jeevan plan for my 2 y baby is it best plan or is there any other good plan in lic if i buy for 2 lac how much value i receive for 2 lac
Rupinder-Eventhough in this plan you are assured of Guaranteed bonus rates, but premium is high. So if you calculate overall return then it will fall within range of 6-8%. Hence if you are planning for your kid’s future, then better to opt for equity investment with mutual fund route. Let me know your views too.
sir, plz explain in detail if premium is high for komal jeevan plan than plz sugest any other plan in lic
Rupinder-As told above by Manish, it is always better to separate your investments with insurance. Hence to cover your life risk, first take term insurance to the tune of 10-12 times of your yearly income. Rest of the amount diversify your investment into Equity, Debt, Gold or any other available options according to your risk appetite. In my view your goal is long term (which I think 16-20 years away from now as you told your baby’s age is 2 years), so go for equity mutual fund option around 90% and Gold 10%.
Hi,
we have taken jeevan saral for 4000 and 6000.Its for 16 years term.
But MSA mentioned are 831440 and 1226880 respectively.Although we were told by agent that we wil get around 50lakh.
What are we missing?
Shikha-Please share the age at which you took these policies. Because MSA depends on age too.
BasuNivesh, My age was 31 in 2011 when I entered this policy
Shikha-Considering your premiums as monthly, what your agent told about MSA are true. But let us consider the LA which is additional benefit you get with MSA are currently Rs.250 and Rs.300 for each Rs.1,000 MSA of 10 and 11 yrs policies respectively. So if we consider the same trend of LA rates for 16 yrs policies, then we may consider LA rates as Rs.550. But to expect higher returns we can consider Rs.700. In such a case for the first policy your LA will be (where your premium is Rs.4,000) Rs.5,82,008 and for another policy (where your premium is Rs.6,000) Rs.8,58,816. So from both the policies you will get around Rs.34,99,144 [(MSA Rs.8,31,440+Rs.12,26,880)+(LA Rs.5,82,008+Rs.8,58,816)]. Return on investment is around 7%. If you opted for PPF for the same amount then your returns after 15 years will be Rs.41,01,842.
If we go according to your agent then the return on investment will be 10.61%, which is highly impossible by the way the expenses are attached with it. (I am considering only agents commission which is 35% in first year, 7.5% in 2nd and 3rd yrs and 5% for the rest of the period). Now think and decide.
Hi Basu,
Have gone thru the thread above, have a question on what is the approx maturity value for Jeevan Mitra (Double Cover Endowment Plan) i.e. plan 88/25/25 where premium paying is till 25 yrs and the last premium has been paid on 18/11/2012, maturity date is 18/11/2013, sum assured is for Rs. 1 lac. Also, what is the approx maturity value of The Endowment Assurance Policy i.e Plan 14/24/24, where the last premium has been paid on 02/05/2012 and the policy is due on 02/05/2013, sum assured is Rs. 25,000/-. Please write back to me on ashitkothari@yahoo.com
Ashit-It is cumbersome for me to track all those 25 yrs bonus rates for Jeevan Mitra and 24 yrs for Endowment plans. Anyhow you paid all premiums and the only option left for you is to wait till maturity period and and cash it. If you really so nervous about the returns then contact your nearest branch they will help you out. From both the policies you may get around Rs.2,50,000 (it is my assumption). Hope this may be your 6 months household expenses. You bought them 25 years back thinking that this Rs.1,00,000 and Rs.25,000 are more valuable by ignoring the inflation values.
Hi Basu,
Thanks for the reply. Will try to get details from the nearest LIC office.
Also, if its 2.5 lacs as stated by you, it would be close to 8 months of my monthly household expenses.
Ashit-Pleasure
Hope in future investment you will also consider the fact of inflation before investing. Happy Investment 
Hi Basu,
This were investments initiated by my father & Father-in-law at an early stage of the start ofmy professional journey and when they did not have the option of seggregating investment from risk cover. All my current covers are term plans and am covered to the tune of Rs. 1 crore under life, 1.1 crore under accident cover.
I intend to initiate a life cover as well as mediclaim cover & accidental death cover for my daughter who is persuing her articleship under the CA course. Her current annual earnings is in the range of 2 lacs annually. Rqst some suggestions on the options available.
Ashit-Sorry for misunderstanding about your past investments. Follow the same plan for your daughter too like what you did for yourself. Take Term Plan to the tune of 10-12 times of her current earnings and increase it after every 2-3 yrs in the proportion of her income and liability. Accidental cover and health cover best to buy now itself as they cost less to her age (few depends on employer health cover, but always better have your own health insurance). Include critical illness cover also for you and your daughter. If this much is done then I think insurance part is almost fulfilled. Please let me know your thoughts too.
Basu, Thanks. I do have a employee cover both on Life as well as mediclaim, however, I have always been an advocate of the same theory as what has been advocated by you and hence have separate covers by self. Currently, my daughter is covered under my mediclaim and I want to explore the possibility of moving away from my cover to cover under her name for all of us. If that is not possible, would look at a separate cover for herself and remove her cover from my policy. All of this is being planned from Taxation and long term savings on cost of insurance perspective. Please advice.
Ashit-Better to take her separate health cover. That seems good idea. Whatever you shared looks fine for me. So go ahead. I didn’t understand this line “All of this is being planned from Taxation and long term savings on cost of insurance perspective”, can you elaborate on this? What type of further advice you are expecting from me?
Basu,
Presuming i & my wife survive till 75 yrs of age. We both are currently 46 & 45, we hv 35 yrears to go. If i continue my current policy, I would start shelling out additional premium fue to change in age bracket. But if i move to a separate policy for my daughter and cover myself & my wife as her dependants, then, may be there might be some saving of premium to be paid as compared to the current situation? Am not too sure of what my understanding on this is. If you could clarify more elaborately on the same. Further, since the policy would be in my daughters name, she would get the tax benefit on the sane. A small catch here is the fact that i still have a younger daughter who needs to get covered too, again, the presumption is that she coukd be termed as dependant on her elder sibling.
Please clarify based on above.
Ashit-Your understanding about premium is correct. But to be frank when you are taking family floater, premium will be fixed based on the eldest member of the family but not on the youngest. Hence in my view you will not get that benefit. I come to know about only one policy from National Insurance which offers only to Bajaj Capital clients, where the proposer’s age is considered instead of family’s eldest person age. But the trick is, you need to be Bajaj Capital investor, means you need to invest something. So it is again indirectly cost you more. Hence in my view, as your daughter I think is major so better to separate her from your membership. Continue you existing insurance with inclusion of your younger daughter. In this way, your elder daughter can be independent even after marriage too. But still you have doubt on this then better to contact exclusive health insurance expert Medimanage. Click here to view their contact details. They will guide you in a better and unbiased manner. If you still face problem then let me know.
Sir I want to By a policy from LIC for my mother, who is 53 years old now. So, please suggest a best policy for her. \
Premium should be 8000 to 10000
Pratyusha-First of all please let me know why you want insurance coverage for your mother who is 53 year old? Someone depend on her income? Is she generating income? If yes then I may suggest you the ways. If no, then my suggestion is a big no for buying insurance.
Hi Basu,
Can you please send me the soft copy of LIC circular (gautam2611@gmail.com)?
I have enrolled for Jeevan Saral (Rs 5000 PM for 35 year with DAB). Assuming, I surrender my policy after 20 years, what is the LA which I can expect?(The table is for 10 and 11 years only)
Thanks, gautam
Gautam-I will send the soft copy of LIC circular. Please look at above comments, I did the calculation for similar few of doubts.
Sir, i have taken policy Jeevan Saral yearly plan of amount 18015 per year for 20 yrs. Agent told that can also withdral after 16 year. So, Plz. tell me maturity amount on both cases.If possible then plz. send soft copy of LIC calculator(vijay.singh04@rediffmail.com). Thank u
Vijay-Their are plenty of calculations I did for the term of 15 and 20 years. Please go through above comments. If you still not catch the points then let me know, will definitely do the calculation and help you. I don’t have any readymade calculator for calculating Jeevan Saral returns.
Hello Basu,
Please help me I have a Jeevan Saral policy of Rs 60000 per annum for 20 year.I have payed 1st year premium.As per your article it will give me around 3.5-4.5% return after maturity.Should I continue with this policy or just canceled it now.Please advice me…
Monojit-For 20 years this policy may give you around 8% return not 3-4% (this return is for 10 year policy). Decision is now depends on you to continue or not. In my view if you really paid one premium then better to cancel immediately. But you will not get any money back. If you want some returns then need to continue for atleast 5 years. Then surrender it.
Thank you Basu..
But If I continue this policy till 5 year then how much money will I return back? should this more beneficial than today’s loss of 60000..
Manojit-In my view it is just a relief that at last you got your invested amount. So instead of loosing Rs.60,000 now it is better to continue till 5 yrs and get some money with little bit of smile
Hello Basu,
I have taken jeevan Jeevan Anand for S.A 5Lakh, for 25 year My age is 29 year what is the Maturity Amount after 25 year Please tell me.
Thanks
Nidhi Kumar-If we consider the current bonus trend for future too then the total Bonus accumulation will be Rs.5,62,500+Sum Assured Rs.5,00,000=10,62,500. Final Additional Bonus is also their but it will be less than Rs.30,00,000 in my view hence I neglected that part for calculation.
Thank you Basu..
How i calculate the Final Additional Bonus
Nidhi-FAB is one time payment which you age at the end of term. Usually it depends on the term you opted. So if LIC declares Rs.200 (for example purpose I mentioned this amount, dont think that this is the true FAB) as FAB for 25 years or more term policies, it means that for Rs.1,000 Sum Assured they will give you Rs.200 as FAB. If you multiply this with your opted sum assured then you get the FAB you will get.
postal life insurance is better than LIC.Because PLI offers bonus of rupees 70 per thousand in endowment scheme and 90 rs for wholelife insurance.
Makesh-It is true that postal insurance offers higher bonus rates than LIC and premium is also less, but only employees of below mentioned organizations are eligible. Then what about the rest?
Employees of Central Government, Defence Services, Para Military forces, State Government, Local Bodies, Government-aided Educational Institutions, Reserve Bank of India, Public Sector Undertakings, Financial Institutions, Nationalized Banks, Autonomous Bodies, Extra Departmental Agents in Department of Posts.
Just wanted to know whether jeevan saral return will be around 9% return after 35 years investment… what u think
Rajesh-It may be. But not sure….:)
Sir i want intrest take jeevan saral policy with 1500/month for 15 years term.im using the premiam caliculator to caliculate my monthly premiam it can shows SA 400000, sir i have a big dought this 4 lakhs SA is only for risk cover of policeholder?after end of 15 y term how much of total maturitry amount i will get?
Sir small correction my monthly premiam is 1600/m 15 y term.
Srinivas-Yes your doubt is correct, SA is for life risk. Please go through the above comments, you will come to know what you can expect from this policy.
hi,
can u send me bonus circular for LIC on shree_1984@rediffmail.com
thanks in advance
Shree-Done.
Hi Basu, Your chart is very helpful. My husband had bought Jeevan saral in Mar 2011. We r paying Rs. 15213/ Quaterly (SA Rs. 12.5 L for 20 yrs). 9 premiums has been paid till date. Please suggest if we should surrender or get it paid – up after 3 yrs.
Sushila-If you surrender now then you may end up in facing loss. Hence better to complete 5 years then opt for surrender.
Thanks Basu for your suggestion….But after 5 yrs, will i get 90% of the premiums paid till 5 yrs(excluding 1st yr premiums) or anything more than that???? or the last choice i am thinking of decreasing the premium amt(from 15K Qtly to 5K Qtly) and continue paying for 20Yrs…..atleast though less but chances is i will min earn 6%…..what u say??
Sushila-If you complete 5 policy years then in Jeevan Saral term is treated as 5 yrs policy only not the original term (in your case 20 yrs). Hence after completion you will receive 5 yrs MSA (which is based on your age and premium you paid)+LA. So instead of decreasing premium and go on investing for remaining years, this suites best for me. Let me know your views too.
Thnks Basu, U are right that LIC treats 5yrs paid policy like original term…one gets MSA but not LA…LA is only after 10 yrs….However, I am planning to decrease premium so that I keep the dscipline of investing regularly (that is only thing i like abt LIC)…one becomes desciplined…though SIP in equity is also gud…but there ur fingers are always crossed bcoz noone is sure where the market will go….ur money r always at stake….in debt category, lic policy is gud…although ppf may be great but due to non-compulsion of premium, i become lazy to invest in that..Lastly, i am loving ur site…u r doing great job…keep going.
Sushila-SIP is the tool used to mitigate the risk of equity market over the longer period of time. You feel fingers crossed when you check your investment on daily when your financial goals are of long term. It does not mean that we can’t review. But once in a year review and re-balancing is good habit. You are rightly told about LIC policies, you need to consider them equal to your debt portion of portfolio. But in my view PPF works wonders than these LIC policies. Let me know your views. Thanks for appreciating about my site
what is bonus for bima gold please
Baskaran-For your information Bima Gold does not have bonus instead it only contains LA.
PPF is the best in debt category as of now..(Till gov does not slash the rates)….but those who have already burnt their fingers in LIC should atleast wait for 5 yrs to get back their hard-earned money….I will be going to LIC branch to check if reduced premium will be done after 3 yrs or making policy paid-up will help…Then i will take a call….or may be i can divert the money left to PPF and gain max interest…Thanks basu for the insights…
Sushila-You can also play with debt funds now as everyone is expecting a rate cut from RBI. Wonderful decision what you have taken. Best of luck
Basu: can you suggest any good child plan to me @caritesh.goyal@gmail.com?
Ritesh-Best plan is, take term insurance on your life first. Then based on your kid’s age start investing. Suppose your kid’s education or marriage goals are more than 10 years then better to start investing in well diversified equity mutual funds. Don’t go to any plan where returns and insurance coverage will also not suffice. Let me know if you have still doubts.
Hi,
I did a LIC endowment policy (table no 14) in 2006/07 for 25 years (my age then around 30) for a SA of 25 lakhs for 25 years. Any idea what will be the final maturity value going by the current trends?
Thanks,Sam
Sam-In your case returns will be Rs.25,00,000 (SA)+Rs.30,00,000 Bonus (I considered today’s trend which for 25 yrs policy is Rs.48 per Rs.1,000 SA)=Rs.55,00,000. I have not considered Final Additional Bonus as it is one time payment and you will receive at end for being loyal with LIC.
Thanks Basu. Whats the range in which FAB can be expected as a percentage of SA for my scheme?
Sam
sir pls send me the circular of jeevan saral bonus to me
my mail id is meenarajkumar94@yahoo.in
Rajkumarmeena-For your information Jeevan Saral will not have bonus instead it only contains LA which I shown in above table.
Sir if I take jeevan anand policy for 21 years of 10 Lakhs
How much lump sump amount i will get after 21 years at present rate………….
Rajkumarmeena-Return after 21 years will be Rs.10,00,000 (SA)+Bonus Rs.9,87,000 (I considered the current bonus rates which for 21 yrs policy will be Rs.47 per Rs.1,000 SA)=Rs.19,87,000.
Hello basu ,
i buy a policy of jeevan saral premium of 6000 per month for 10 years they said after that you got 7.5 lakh it is true?and when i said to agent they show a one table n which mention that after 10 year got a 7.5 lakh.If it is not true so please send me all bonus details after 10 years what you expect and snd me brouchure also in which all details mention reagarding this policy.Please basu….rahul141.gupta@gmail.com
Rahul-You are paying Rs.72,000 annually means total you pay Rs.7,20,000 in that 10 yrs of policy period. So what you agent’s quoted amount of Rs.7,50,000 is apart from what you paid or just you will receive Rs.7,50,000 only? Please clarify about the same. Once you give me a clear picture what your agent told then I may in a better position to say you whether he is saying right or wrong.
Please look at above comments and you will find that for 10 yrs policy and considering the current LA declared by LIC, you may expect hardly around 4% return. So first share your agent’s claim then I will definitely guide you on this issue. Also in the mean time please refer above comments on Jeevan Saral plan.
Hello basu sorry wrong written ,they said after 10 month you got a 15 lakh rupees just approx double an amount..when i consult again they show me a table no 165 of jeevan saral and said that is generated by LIC team.If you go and consult in lic office ,in that also same table.So i wantto know exactly it is true that shown by an agent table 165 for jeevan saral
Rahul-This is how they fool you. It is the mandatory indicative return which either LIC or any other insurance company will show you according to IRDA rule. But it does not mean that they will definitely give you that much return. It is just for illustration purpose. Hence ask your agent if LIC pay that much then will he pay you back you? Ask him from written
Yes basu i know return is not true,so i want to know exactly how much amount after 10 year in 2021 or suggest me should be canceled or switch to jeevan anand everbody said jeevan anand is very good policy and give an extra return.
Please give me some suggestion
Rahul-I am extremely sorry for missing to reply to your comment. To calculate the exact return of Jeevan Saral I need your age too. Because maturity sum assured depends on age factor. Roughly we can say that returns for 10 yrs policy will be around 4-5%. Now switching to Jeevan Anand, it is like switching to another mistake to avoid one mistake. Features are bit different and may looks attractive. But returns from this policy too hover around 6-8%. Hence please ignore both the plans and stick to term plan and need based investment rather than fulfilling your agent’s dream.