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Insurance India: Basic Rules of Investment In Insurance Policies

Updated on July 1, 2011

Just like several developing and developed countries around the world, insurance in India is booming on an yearly basis just because of awareness in insurance products like home insurance, life insurance, auto insurance, education insurance, retirement insurance, etc. Several private insurance companies have come up with discounted insurance policies and attractive plans with highest returns but still LIC the topmost insurance company in India stands opposite to private players giving them a tight competition and remaining leader throughout decades. Also, when we think of investing in insurance in a developing country like India, we cannot think of any other than investing in public sector insurance products from LIC (Life Corporation of India), National Insurance, Oriental Insurance, etc. because our investment remains secure throughout our life during and after the policy period. I am not an expert in insurance investment, neither I am an insurance advisor but I believe in a some basic rules of investment in insurance India, which I am going to share with you today via this article.

Below are a few basic rules of investment in insurance policies in India that I believe in:

  • If you want to buy life insurance policies, pension plans, or superannuation plans, believe purely in LIC, as investment in LIC will not only grow but at the same time will be secure. LIC is the only company that assures each an every rupee is payable to every LIC insurance investor and The President of India is responsible for the payments and claim settlements.
  • Life Insurance plan, if it is for an adult, invest the maximum part of your insurance in whole life plans and buy term insurance policies of good amounts. Insurance should be treated more like insurance than an investment.
  • Mutual funds and stocks, not the right time right now and this thing totally depends upon your appetite for risks for example Soni has a lower risk appetite as compared to Sudarshan because he is married and now has to work on the secure plans for his daughter.

If you think that private insurance is better than LIC, then you are wrong as no one can match LIC with any other private insurance providers at any point of time.

I have an experience with both types of insurance providers, public and private:

Benefits of LIC Insurance Policies

  • You can revive your LIC policy anytime without any problem.
  • You can surrender your LIC policy at any point of time with very minimum deduction.
  • If you want good long-term returns, then also LIC is best.

LIC has best policies for everyone

  • I just had Kids plan form LIC. It is far better than any of children insurance plans from private insurance providers.
  • If anything happens in between, LIC will pay the premium further and benefit will remain the same.
  • I just wanted to withdraw one scheme From ICICI Prudential Link Insurance Plan and they are treating it like hell.
  • Even not only life insurance, LIC which is a government company is better in auto insurance sector if you need better refunds and claim settlement without any risk. Of course, private auto insurance will give higher returns, but also look at their administrative charges and other overheads. It all comes from your policies only.

If you take education policy from LIC for your kids

  • Pay insurance premium for 15 years and you will get good amount after 16 to 21 years of your kid’s age
  • You will get benefit from taxes in the form of tax exemption
  • Parents will get cover for insurance along with kids and lot more features.

How LIC is the best insurance provider in India?

LIC is the best insurance provider in India because for insurance regarding life insurance, auto insurance, children's education, retirement plans, etc. the most important thing is that these requirements cannot be risked, so you need a long term assured player with good funds and reliability like LIC, why because all other private insurance providers are kids in India as compared to LIC. Moreover, all other companies are here to make a profit and LIC is the one, which has mission of public interest too. Also, it is true fact that all other private insurance companies who boast of selling pension plans have their superannuation and pensions funded by LIC.

Above was my advice and tips on investing in insurance policies in India. I do not guarantee that these policies will improve your personal finances as I don’t know about your present financial condition, but utilizing the above tips and rules of insurance investment will definitely help secure yours and your family’s future with highest secured returns going line by line with your life and also after your life for the benefits of your descendants.

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    • AllSuretyBonds profile image

      AllSuretyBonds 6 years ago

      Great Hub. I like the fact that ou can revive your LIC policy anytime without any problem.