child LIC POLICY taken in 2001 with premium 11473 yearly for 17yrs and maturing in 2026-please let me know the maturity amount
Ans: Assessing Your Child LIC Policy
Policy Overview
Your Child LIC Policy commenced in 2001. You are paying Rs 11,473 annually. The tenure of the policy is 17 years. It matures in the year 2026.
Understanding the Policy
All LIC policies come with a sum assured and additional bonuses. These bonuses get added over the period of the policy. This maturity amount includes the sum assured, along with the bonuses.
Calculation Components
Sum Assured: This is the amount guaranteed. It is mentioned in your policy
Bonus: LIC announces bonuses on an annual basis. These are based on the type of policy and the performance of the LIC.
maturity amount Calculation
The maturity amount is calculated as the total of the following:
Sum Assured
Added Bonuses
Illustration Letthe sum assured be Rs 2,00,000 Bonuses also accrue annually. We'll be assuming the average bonus rate to be Rs 40 for every Rs 1,000 of sum assured. This rate might vary from year to year, but to calculate, we are assuming an average rate.
Annualised Bonus: Rs 2,00,000 / 1,000 * Rs 40 = Rs 8,000
Total Bonus for 25 Years: Rs 8,000 * 25 = Rs 2,00,000
So the maturity amount could be around:
Sum Assured: Rs 2,00,000
Bonuses: Rs 2,00,000
Total Maturity Amount: Rs 4,00,000
Factors that Determine Maturity Amount
The exact amount on maturity could be determined by a number of factors:
Bonus Rates: These vary each year and are dependent on the performance of LIC.
Type of Policy: There are various types of policies.
Other Advantages There are plans providing greater benefits, such as loyalty additions. Stepsto be Followed Read Policy Document: Read the policy document for details of sum assured and bonus. Contact LIC: Contact LIC for precise calculation. They will be able to provide you with the current bonus rates. Speakto a Certified Financial Planner He can inform you with a better understanding of the working of the policy and also guide you with options to re-invest the amount post its maturity. Evaluating All Investment Options
It is time to rethink your investment strategy. Here are some points for your consideration:
Reinvestment: When it matures consider reinvesting in mutual funds. They normally give better returns than the usual insurance policies.
Active Management: Actively managed funds may do better than index funds. They have professional fund managers who strive to beat the market.
Regular Funds: A Mutual Fund Distributor coupled with a Certified Financial Planner can offer better fund selection and professional advice. Final Words
Your Child LIC Policy is due for maturity soon. Knowing the maturity amount will help in planning further investments. Re-evaluate your investment options. Professional guidance in seeking the best returns.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
