Life Insurance Comparison India - LIC Jeevan Aastha Policy Review
This is an exclusive review of LIC Jeevan Aastha Policy in India and answers the following questions: Does it make sense to buy LIC’s Jeevan Aastha Policy as it is advertised widely nowadays? How it will affect our personal finances? What about returns of Jeevan Aastha? Is our money worth investing in it or should we go for mutual fund investments?
As per the illustration in LIC Jeevan Aastha Policy terms and conditions, for a 35 year aged individual:
- A 10-year Jeevan Aastha policy expects a premium of Rs. 48,975 and guarantees a maturity value of Rs. 1,00000, which is a 7.4%, annualized growth.
- A 5-year Jeevan Aastha policy expects a premium of Rs. 51,930 and guarantees a maturity value of Rs. 72,500. That’s a 6.9% annualized growth.
Use Microsoft Excel or your Calculator to double-check the numbers at your side.
Neither 7.4% nor 6.9% is anywhere close to that heavily advertised 10% and 9% return. 10% and 9% are clear marketing gimmicks within the legal ambit with extraordinarily confusing terminology (for any layman). 10% guaranteed return that too, an insurance company, oh well. That’s something too good to be true. Such policies can be great for the commission seeking insurance brokers and for the insurance company for sure. Not for your wallet or for your financial health. The same thing applies for anything that’s being hard sold. After all, you will do good only when you are not fleeced. If you need life insurance for free, switch to BSNL Telephone (throwing away all those private telecom services). Have a landline and also a mobile from BSNL and get worth Rs. 1,00,000 cover that arrives automatically under your name.
If you need a much bigger life insurance at an unbelievably low cost, go for a Term Policy and protect your family.
You want tax benefits and guaranteed return over a long term at a very competitive interest rate, open your PPF account today. All in all, take care of your hard earned money. Don't squander it over insurance policies disguised as investment products. If your investment horizon is 10 years, just go and buy Benchmark S&P CNX-500 Fund worth Rs. 48,975. Doing this, your investment will become Rs. 1,00,000 in a much much more shorter time than 10 years. As soon as it becomes Rs. 1,00,000/-, redeem and put it in a Bank Fixed Deposit. Don't ever get greedy.
At the end of 10 years, who knows, you might have some 1.5 lakhs or even more out of that Rs. 48,975 investment? Jeevan Aastha would have generated a maximum of just 1 lakhs for you over the same time period. I know we all need insurance cover but we can do this by just throwing away our private sector telephone connections and take up BSNL landline and mobile phones (both). Rs. 1,00,000 cover will automatically come totally free.
Moral of the Story
When your investment is a low-cost investment, your financial health and personal finances will prosper by leaps and bounds.