Having got stuck in big fat premium of insurance policy (and most of them i bought from my friend/relative who work as Insurance agent). but realised my mistakes later.. hence will suggest you something..
1) Do not mix investment and wealth accumulation and insurance. Purpose of insurance is to mitiagte risk...and just keep it at that level.
2) For wealth accmulation, retirement fund, etc.. go ahead with Mutual fund, or investment route. Fixed deposit are not right choice... Infact, you are loosing money in FD when u consider the impact of tax and inflation on it.
3) Endowment policies are one of the costliest policy for we holder. But that makes sense for insurnace compnay so they are sold a lot, and agents might get higher commission on them hence they also promote it hard.
Here is my simple calculation
If you are paying say 10k of endowment policy premium.. for coverage of say 3 Lac and it is 15 yrs policy.. So in 15 yrs, you would have paid 150,000 for this. At the end you will get 3 lac (that is most likely case.. that u would live far beyond 45 yrs of age)
If you buy Term insurance, then u might pay just 2k for premium. Take remining 8k and put it in mutual fund. You will still get the cover of 3 lac. You will continue to pay 2k for it evrey year.. so total cost will be 15*2 = 30,000.
Remaining 8k in 15 yrs would 8*15 = 120k. With rough calculation, your money will double in 7 years when invested in mutual fund which is giving 10% average return.. i.e in 15yrs.. this double will become 4 times... So the first 8k, will become 32k by then, next years 8k will be approx, 30k by then...so just with 2 yrs of your 8k investment, u are making 16k to 60k. If you do this for next 15yrs..then just think where your returns will be..
Now compare this with meager return insurance company will give u back at maturity. Even if you include the bonus etc, typical return that u will get from insurance will be around 5 to 6%.
Term policy will cover u for the risk very well.. Though u don't get back any return from that but with slight smartness, u can beat most of the insurance agents and insurance schemes.
If you want to insure for higher limit say 10L, then instead of buying 1 term policy, buy 2 or 3 small policies. Cause of your age, premium will be lower. In next 5 year, when your MFund or savings have grown, then u can very well stop paying premium on 1 insurance policy .. Cause at that stage, your increased assets in mutual fund, house etc will take care of risk. That is the stage our insurance requirement goes down.. (I haven't met any insurance agent who told me that insurance limit can also goes down..but that is the fact). Infact, as your childern becomes independent, the limit further goes down.
Hope this helps. Sorry about long post. Just couldn't stop expressing myself cause I still feel pain of 26k of premium for 3 L of cover and pay 2k of premium for 5 lac of term insurance.
Feel free to raise your question/doubts.
Last but not the least.. plz improve your knowledge about investment. It is not that difficult. If someone has the school level knowledge of arithmetic/maths and thats what one may need to be financially smart.
All the best.
However based on all the discussion what i find that going for Term Insurance policy ll not harm. As this can be of some help to my family in case something happens to me. So, thinking for a 15 or 20 years policy of 20 Lakh. 