Lic Jeevan saral policy returns
Ans: LIC Jeevan Saral is an endowment policy that, like other similar plans, does not disclose its expenses transparently. These insurance-cum-investment products usually provide minimal insurance coverage along with modest returns. Unfortunately, if you choose to surrender the policy, you won’t recover the full amount of premiums paid.
The policy stipulates that the surrender value will be the higher of the guaranteed surrender value or the special surrender value:
Guaranteed Surrender Value: This equals 30% of the total premiums paid, excluding the first year’s premium and any premiums for accident or term riders.
Special Surrender Value: This is 100% of the Maturity Sum Assured, provided that at least five years' premiums have been paid. The Maturity Sum Assured used will correspond to the term for which premiums have been paid.
Although surrendering the policy might lead to some losses, continuing with a suboptimal product is not advisable. Purchasing an endowment plan as an investment is generally not recommended because it limits both your life insurance coverage and your potential returns.
For future reference, it's better to opt for a pure term life insurance plan, which offers more substantial coverage at a much lower premium. To meet your long-term financial goals of five years or more, investing in equity mutual funds would be a more suitable approach.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
