LIC term insurance - Single or Annual premium

Hi,

I am planning to go for the LIC- Amulya Jeevan policy for 25L for 20 yrs. I was calculating the premium which are -
1.Single premium: 75,975
2.Annual premium:6750 * 20 =1,35,000
Single premium seems to be cheaper than the Annual premium. Is it a good idea to go for the single premium?

Thanks in advance

Let me suggest a diff setup....Invest 90k in Post office MIS. This will give you yearly interest of 7200/. You can use this to pay your premium. This is 6 yr scheme, so you have to renew it after 6 years. After 20 years you will have your initial capital back (Though whats the value of 90k after 20 yrs is diff topic altogether ;-)).

Hi,

Thanks for the inputs. What is Post office MIS? If I invest 90K what is the sum assured amount that my family will get if I die during the tenure?
I have dependent, so I am more interested in the security part (and not exactly investment) of my dependent family.

Thanks.

Guess I was not clear in my prev msg. MIS is monthly Income Scheme. In this scheme you get 100/ per month for six years against the deposit of 15K. Its like FD which pays interest every month. After six years you get your 15K + 5% of 15K back.

What I was suggesting was to take the LIC term policy with annual payment option and open a 90k MIS a/c with PO. With the interest of 90K you can pay the premium of your LIC policy. You need not withdraw the interest from MIS every month. You can visit PO annualy to get the interest for last 12 month and use that to pay your premium.

As you inital q regarding what is cheaper single premium or yearly one...its not that straight forward. You have to calculate the Future Value of both to know the answer. My guess is that yearly one will be cheaper.

Thanks a lot for the reply. Now I understood the advantage and definitely a good idea.

dear,
i have one suggestion(?),
if you take monthly income form post office and then deposit in to RD in post office / bank again(monthly wise), then after one year, with draw and pay your lic.

Swamy,
What is the advantages in that case?

Also MIS is taxable (30%), so for a 90K MIS, I will be getting ~5K annually and the LIC premium is ~7K.So need to pay ~2K from my pocket per year.

dear,
just i want to suggest those guys, who is confusing to choose payment mode monthly/quarterly/half yearly/year . if you choose yearly(for LIC) and deposit in RD as monthly, i am not sure what is the percentage but it's profitable.

Single premium is never a good option as compared to deposit as in case of mishappening and return on investment

For 90K you will be getting 600/month i.e. 7200 per year. And tax is not deducted at source.
Going for one year RD might not be gd idea as there will be too much hassle and too little gain.
Though going with 6yr mis+5yr RD with the interest of MIS will give you compounded return of 9+% risk free.