Regarding New Jeevan Shri

Hi,

I have a few questions regarding New Jeevan Shri T. No. 151policy that I had signed up for in 2003.

I signed up for a term of 15 years (premium to be paid only for 16 years) with premuim of Rs.37,015 annually. I did some research and wanted to know what would the payout be after 25 years. I have a table - http://spreadsheets.google.com/ccc?key=0AthTbw5SARNzdFBwWXpYWDVXS0R1ejlScGpTRTBEZUE&hl=en

I did by referring to the Bonus payout info that LIC has at http://www.licindia.com/bonus_info.htm

My questions are -

1. Mine is called an endowment plan right? What category does my plan fall into?
2. Is my table correct? Am I calculating correctly?
3. I read from somewhere (this site) there is an 8% interest. Is this true? Or is this column not needed?
4. I don't see New Jeevan Shree anywhere. Why is this? Is this different from Jeevan Shree-1?
5. How do I incorporate the Loyalty Addition? What is it?
6. Doesn't LIC have a tool/table like this for it's customers to calculate this?

They greyed out columns are future years (assuming same bonus)

I am new to this so just trying to understand my current status

I dont think there is an 8% interest . Some one might wrote that the End returns willbe 8% compunded . The much hyped jeevan shree policy( closed in 2002 ) itself offers around 18.75 lakhs on maturity for a 5lakh sum assured. So this new scheme will offer a lesser return than that .

This new plan offers 50 rs per 1000 suma ssured for first 5 years and bonus there after . So remove the intrest from your calculations

Loyalty addition, if any , will be paid by LIC after stipulated years of survival. ( its 45% of sum assured as of now .And will go up with the tenure) .

Rough calculation will gives out a maturity amount of 16.50 lakhs after 25 years.


Naresh

Premium : 37015
Sum Insured : 600000 (Term Insurance for the same will be 1752 ....assuming you are 30 years old at the time of taking the policy and for 25 years...hxxp://www.licindia.in/amulya_jeevan-I_benefits.htm)
So total money to be paid for insurance is 1752 * 25 = 43800
Total premium you are paying is 37015 * 16 = 592240

If you invest remaining part of this..37015 - 1752 = 35263 in PPF you will get 2379083

While LIC will give you only 16.5 lacs...

Hello daitya ,

I am in search of good LIC policy (Child future and retirement ).Would like to discuss more on IM.Can u pm me u'r id ?

Thanks,
Raju

Raju, I recently did a comparision of children policy v/s Term insurance + MF SIP recently for my friend. My finding had been that

1) Child policies costs a lot - 1lac annual premium for 5lac of cover.
2) Same 5l of cover you can buy in 2500 Rs of term insurance.. and if you invest remainnig 97.5 Lac per annum in MF which is giving just 12 - 13% return (and it is not big rocket science to find a fund that gives you 12/13% return over long period.. ), you will easily beat the child plan in 7 to 8 yrs of time.

3) Child plans - pocket almost 15 to 20 % of your premium in initial years as their cost.. so only 80k of your money will really gets invested. Think in terms of compounding and realised what difference this can make over a period of 15/20 yrs.
Moreover they have annual fund mgmt fee of 1.75 to 2% and monthly admin charge of 50 rs or so charge for all the months of the policy.. On top of this, the monthly charge increases every year by 5%

In short, in my view, Child plans are big loot.. they are promoted highly by agents cause insurance company doesn't mind sharing such hugh income with them..
What a nice emotional blackmail game on the name of child.

If you are going thru this Term Insurance and MFund route, then you can easily afford to buy all kind of riders, and pay 3 to 4k for insurance policy.

Note - I took the child plan from one insurance company for my analysis.. but I am sure, the findings will not be much different for any other company.

Happy investing.

I am sorry Rajuji..as I dont have knowledge about the policy you have mentioned..
You can use the views expressed by AW10..

Hi AW10 ,

Thanks for the detailled explanation.I will drop you a m ail for the same.Need more such help in deciding .Hope to find u'r id somewhere.

Thanks,
Raju

Raju..
Mr Manish has published a good article...read here:
hXXp://www.jagoinvestor.com/2010/01/5-easy-steps-to-do-your-childs-education-planning.html