Search: jeevan anand

September’s Book Giveaway is fun to participate in and your comments could prove extremely helpful to one of our fellow readers.

Continuing the story from where I left it last, a Capital Advisor reader wrote in –


My husband, aged 35, has a Jeevan Anand policy for a sum assured of Rs 15 lacs for which the annual premium is Rs 82,524. The policy inception date is 23-November-2009 and the maturity date is 23-November-2030.

I, being a housewife and aged 30, also have a Jeevan Anand policy for a sum assured of Rs 10 lacs for which the annual premium is Rs 51,510. The policy inception date is 26-November-2009 and the maturity date is 26-November-2030.

I honestly don’t understand why the agent sold us a policy in my name. The premium for this year is soon due in November, 2012, but having read your past articles I’m not sure if we should continue these policies at all. I’d like to know which Jeevan Anand policy should we surrender and what our overall loss would be upon surrendering.



Image of Wealth Insight MagazineRs 134,034 per year as premium for two Jeevan Anand policies! I am speechless! But here’s your chance to speak up and advise this reader about what they ought to do with those useless policies.

The best answer wins a full year’s subscription (12-issues; postal delivery) to Value Research’s Wealth Insight magazine. I read this magazine each month and I find it quite insightful (!).

To participate, simply leave a comment explaining what you believe the reader should do about their Jeevan Anand policies. Remember, the more insightful your answer is, the higher are your chances at winning. And don’t forget to leave your email address along with your comment.

{ 9 comments }

I simply love coffee. You can hook me up permanently to a Coffee-IV and that would be a debt which I can never hope to repay.

Jokes apart, there’s this coffee bean grinding place near D’s place that dishes out some exceptionally aromatic coffee powder. I’m hooked to that coffee powder but unfortunately the owner of that place also happens to sell LIC policies on the side. You can almost predict what would happen in such a volatile situation!

Yeah!

After a few visits and chit-chat that confirmed my status as a “prospect”, I was pitched a “Jeevan Anand” life insurance policy — the once-in-your-lifetime saving-plus-investment-plus-insurance opportunity.

Seriously.

I’m beginning to think that “Jeevan Anand” is almost as good as God (not Gold). It’s invisible, omnipresent, and will have you begging for mercy each morning.

What do you think?

I’ll tell you another day about this email I just received where both the husband and wife have individual Jeevan Anand policies (for a total annual premium of about Rs 1.35 lacs) and they don’t know why they took the policies (“the agent sold it to us” is what I read).

So, coming back to my story, here’s how I escaped with just my coffee powder –

“I already have a Jeevan Anand policy for Rs 5 lacs for which I am paying a premium of Rs 25,000-odd each year. I’m already finding it difficult to pay that annual premium given all of my other EMIs (car loan, personal loan, etc.).

So, unfortunately, I will not be able to buy another policy at this time even though I know that my insurance cover is abysmally low. But once my EMIs are over in a few years’ time, I will definitely buy another Jeevan Anand policy from you.”

That did the trick.

And since I’m in a jokey-mood, here’s another one.

A business model for Starbucks in India — A Jeevan Anand “To-Go” with Your Espresso.

Brilliant?

{ 13 comments }

Since I’m now on the lookout for ways and means for generating a steady investment income each month, my eyes and ears perk up at the slightest sight and sound of any financial instrument that would let me achieve that. That’s how I got interested in the LIC Jeevan Akshay VI Immediate Annuity Plan. Thought I’d quickly review this plan and see how it stacks up against my “targeted monthly investment income” strategy.

But first, some highly recommended pre-reading — features and benefits of this plan.

Now here’s what I think about this annuity plan –

  • Here’s the most important fact – Keep in mind that you, as the purchaser of this annuity plan, will never get to see your lumpsum money invested in this plan ever again once you’ve handed it over to LIC. You do have an option where your nominee or spouse gets back the lumpsum invested — but that’s only after you’re no more. Personally and financially, I’m still not at that stage where I can just close my eyes and handover a chunk of my money to LIC and forget that I ever had it. It seriously requires a big leap of faith which I might probably cross a few years down the line but certainly not today.

  • This plan is also a bit complicated with seven different flavors for paying out the annuity. The annuity amount varies with each flavor and once you choose an option it can’t be changed even when your personal situation changes (say when you get married and therefore you’d like your spouse to continue to receive the annuity when you’re no more or when you have a child and therefore you’d like to add him/her as a nominee). This lack of flexibility sounds pretty lame to me! Does LIC expect one to get through all of these stages (the minimum age at entry is 30-years) before thinking of buying this policy?

  • If you’re already married but don’t have a kid yet, the option that makes most sense is “#6 — Annuity for life with a provision of 100% of the annuity payable to spouse during his/her lifetime on death of the annuitant.” But remember, when you do have a kid, you can’t go back and opt for Option #7 (see below) which is what you’d typically want to do.

  • If you’re already married and already have a kid, the option that makes most sense is “#7 — Annuity for life with a provision of 100% of the annuity payable to spouse during his/her lifetime on death of annuitant. The purchase price will be returned [to the nominee] on the death of last survivor.”

I then ran the numbers for “example scenarios” for my case and got these results –

Lumpsum investment of Rs 5 lacs (service tax of Rs 15,450 is extra!) with Monthly Payout option –

Image of LIC Jeevan Akshay VI annuity calculation for monthly payout.

That works out to (2,990 x 12)/(515,450) = 6.96% simple interest equivalent.

Lumpsum investment of Rs 5 lacs (service tax of Rs 15,450 is extra!) with Yearly Payout option –

Image of LIC Jeevan Akshay VI annuity calculation for yearly payout.

That works out to (37,350)/(515,450) = 7.25% simple interest equivalent.

Compare that with something much much simpler — one of my Fixed Deposits that’s currently yielding (and will continue to do so for the next two years) 9.18% simple interest equivalent. That’s nearly 2% higher than the annuity!

Since both the annuity plan and the fixed deposit result in taxable income and both are subject to interest rate risk, it’s a direct apple-to-apple comparison. The annuity guarantees a fixed rate which as long as it is lower than the fixed deposit rate is disadvantageous to you. On the other hand, you don’t know what the fixed deposit rate would be say 5-years from today. So it’s a toss between predictability vs. probability.

I then ran some additional calculations to see how the yield would vary across lumpsums invested.

Image of LIC Jeevan Akshay VI yield calculations in Excel.

Download IconFeatured Download –
Click here to download the LIC Jeevan Akshay VI (Online) Excel spreadsheet for calculating your yield.

Link to image of LIC Jeevan Akshay VI yield curve.

As you can see there’s no big variation. I also didn’t see too much of a difference in yield across the age bracket of 30 — 40-years (when you’d typically expect to be looking at ere).

Finally, to wrap things up, I don’t think I will be opting for this annuity plan right away primarily because it’s a bit inflexible given my current family situation, the yields are on the lower side, and I’m a bit hesitant to send my money into the cloud.

How about you? Do you find this plan advantageous to your situation?

Funny thing is, a few days after I’d registered myself on the portal, an LIC Direct Marketer called me up and his advise to me was that since I was only 32-years old I didn’t need a pension/annuity plan but instead needed a Jeevan Anand policy.

Maybe I should email this link to him.

{ 7 comments }

2,150+ readers have downloaded my ULIP Surrender Request Letter template!

Close_ULIP_bitly

1,500+ readers have downloaded my LIC Jeevan Anand Surrender Request Letter template!

Close_Anand_bitly

If even 50% of them have taken action, that’s a pretty good impact! Just think of all that hard-earned money readers are retaining in their pockets and the equivalent lost revenue for the insurance industry.

{ 8 comments }

I regularly receive emails where readers express their horror stories about LIC’s Jeevan Anand policy. Believing an agent’s (who often happens to be a neighbor/relative/friend) fictional stories of risk and return, they buy the policy only to discover that they need to pay exorbitant premiums for the next 20-years and that when they want to surrender the policy realize that they have a pure yellow lemon in their hand. This realization usually comes after two annual premiums have been paid and the third one is shortly due. So, the question that I am asked to address is should they choose to “pay exorbitant premiums for a few more years and incur a loss” or “pay one more exorbitant premium and incur a loss.”

Here are two sample emails that I recently received.

Email #1

Please suggest whether I should opt for LIC’s Jeevan Anand policy or not. I am looking for a short-term plan. My agent suggested taking a Jeevan Anand policy for 5-years. I need to pay an annual premium of Rs 24,000 and after the term of 5-years, I will supposedly get Rs 2 lacs (1 lac sum assured plus 1 lac bonus as quoted by the agent).

Does this sound OK or are there any hidden loop holes? Will I get al least Rs 2 lacs after 5-years? Is there any better short-term plan offered by LIC?

Email #2

I have an LIC Jeevan Anand policy for which I have already paid 2-annual premiums of Rs 25,000 each. In February, I need to pay the third premium. When I purchased the policy, the agent had said that I can close the policy after 3-years. But he never disclosed the fact that even after paying the third premium, I will only get 30% of the last two premiums paid which comes to somewhere around Rs 15,000. If I close the policy now, I won’t get even a rupee back.

I’m not able to understand how you got Rs 50,000 after 6-years. My agent isn’t helping me with any information either. Should I wait for 6-years and get back Rs 50,000 (like you did)? But I don’t want to pay any more premiums after 3-years. Won’t it be better to pay Rs 75,000 in premiums and get back Rs 50,000 after 6-years rather than pay Rs 75,000 in premiums and get back Rs 15,000 after 3-years?

And, way back in May last year, reader Raghuram had asked:

I have been a regular reader of your blog and have learned a lot from you. I have made good investments and have taken proper health insurance and pure term insurance covers for my family. But one mistake I’ve made goes 3-years back when I took an LIC Jeevan Anand policy for 10 lacs cover for 20-years.

After my marriage, because of pressure from a relative (who happened to be an insurance agent), I buckled and bought this policy without reading it or knowing what I was doing. Now I am repenting. I am paying a premium of Rs 42,016 per annum and I have paid 3 premiums so far. The next premium is due in June, 2011.

I went to the local LIC Office and inquired about “the surrender procedure and the surrender amount” that I may get. If I surrender the policy now, I will get around Rs 24,000, which is less than 20% of what I have paid till now. The officer suggested that I hold on to this policy for 2 more years (total 5-years) and then surrender it so that I can get a surrender value of 12.5% of the insured amount (means 12.5% of 1,00,0000 = 1,25,000.)

That means I have to pay another Rs 84,000 and wait for 2 more years to get 1.25 lacs. Here’s what I’m thinking:

Plan #1 — Surrender the policy today

Total Payment = Rs 42,016 x 3 = Rs 1,26,048
Surrender Value = Rs 24,000
Loss = Rs 1,02,000

Plan #2 — Surrender the policy after 2 more years

Total Payment = Rs 42,016 x 5 = Rs 2,10,080
Surrender Value = Rs 1,25,000
Loss = Rs 85,000

Now I need your help. What shall I do? Please let me know your views and thoughts on this and help me out. Waiting to hear back from you.

Here’s what I had replied and this could be a framework to base your decision upon:

Hi Raghuram,

I’d cut my losses today.

Reasons –

Think about it this way.

Surrender value of 24,000 today = 28,250 two-years from now @ 8.5% in an FD

1st extra premium of 42,000 today = 49,500 two-years from now @ 8.5% in an FD

2nd extra premium of 42,000 one year from today = 45,600 two-years from now @ 8.5% in an FD

So, at the end of two-years you’ve roughly made 15,350 in interest. More if the interest rate is higher. The notional loss of 17,000 b/w Scenario 1 and Scenario 2 is more or less made up by the interest you earn. Plus, you don’t know what will happen 2-years from today…and the 12.5% return is somewhat suspicious…I didn’t find any such Terms and Conditions in my Jeevan Anand.

Regards,

Vinaya

What do you say?

{ 26 comments }

Towards the end of 2010, I made Seven Money Resolutions for 2011 that I hoped to execute upon through the year in order to strengthen my personal finances. A year has almost passed and I thought I’d provide an update on each of these resolutions.

Resolution #7:
I want to keep my personal finances better organized.

Though I write a lot about managing your personal finances, I often slip-up when it comes to managing my own personal finances. For example, some time back, I wrote a series on organizing your finances. These thoughts originally arose from a personal need for organizing my own personal finances. Though I did complete some of these steps, there’s a whole lot that I didn’t do. So, in 2011, I’d like to organize my personal finances better.

Here’s what I specifically want to do:

  • Get rid of financial clutter. I’ve done this successfully in the past but of late have let a couple of things creep in again. I have a current account into which reimbursements were credited by my previous employer but this account is no longer of any use. This account doesn’t financially justify its existence and hence needs to go. Another thing that I’d like to really get rid of is my defunct LIC Jeevan Anand policy.

Update: Closed that legacy and unused current account. Got rid of that LIC Jeevan Anand Policy. I closed two other Savings Bank Accounts that I hadn’t used in over 10-years as well. Bye bye personal finance junk. Seriously, goodbye!

  • Create and maintain a master information document. Once I’m rid of all that clutter, I’ll know what my true financial assets are. I’d like to create a master information document that details all of my true financial assets. The purpose behind this document is to have a ready and up-to-date reference available at all times and which can be directly reused at a later time (say when I need to create a will).

Update: Started but not finished.

  • Get my nominations in place. Once I create my master information document, I’ll know which of my financial assets have nominations that are either outdated or are completely missing. From personal experience, I can advise that for every financial asset that you own make sure that you have a nomination in place. And for someone who writes about personal finance, not having my nominations in place is honestly unacceptable!

Update: Started but not finished.

  • Put together my personal finances folder. I did get started on this task this year but got sidetracked quickly. I think this folder will be most effective if I do this simultaneously as I build my master information document — what I write in the master information document should be backed by physical documents in the folder.

Update: Started but not finished. I have everything in the folder but it’s not synchronized with the Master Information Document.

I think this is a broad enough framework to capture everything that I need to about my personal finances. But the real challenge, as they say, lies in execution. When done though, I will have everything that I need to have about my personal finances in one place.

What do you think? Any suggestions?

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Towards the end of 2010, I made Seven Money Resolutions for 2011 that I hoped to execute upon through the year in order to strengthen my personal finances. A year has almost passed and I thought I’d provide an update on each of these resolutions.

Resolution #3:
I will buy term life insurance online. Because I’ve only had terrible experiences with life insurance agents and medical diagnostics laboratories, I will purchase a simple term policy online. I will also ignore all those complex financial models that tell me that I need to insure myself for crores of rupees out of the box (heh!). I will think BIG but start small.

My (mis)adventures in trying to buy term life insurance are legend to regular readers of this blog. From agents who suddenly go missing, to direct marketers who blatantly ask you to lie on the application form, to totally clueless medical diagnostics centers (ironically called Clumax), to insurers who force you to surrender a defunct endowment policy prior to applying for a term policy, I have seen it all.

I’ve also grown tired of those life insurance calculators whose “artificial intelligence” output tells you to insure yourself for crores of rupees. When you can’t buy a term policy for even a rupee, dreaming about insuring yourself for crores of rupees is quite sadistic.

Hence, in 2011, my strategy to buy term life insurance is:

  • No life insurance agents. No direct marketers. No diagnostic labs. Online and faceless is my only option left.

  • Research term policies that I can buy online (only a handful as far as I know). Sum assured will be a [relatively] small but decent amount and for the longest tenure available.

  • Surrender my now long defunct LIC Jeevan Anand endowment policy. Use the proceeds for paying the initial premium on the term policy.

  • [Assuming that I get the policy,] Wait for six months and double my coverage through a second term policy. (And if luck is on my side, repeat this strategy in 2012 — possibly through a different insurer).

Think BIG. Start small. Be faceless. That’s my strategy.

What do you think?

Note: If an emergency fund, health insurance, and zero-debt together form the core of your personal finances, disability or personal accident insurance constitutes the layer on top of the core, with life insurance when you have dependents forming the third layer.

Update: Again, I did absolutely nothing through the year. So many of you wrote-in (through comments, emails, and personal interactions) asking me to evaluate online term-insurance providers that it should have hustled me into taking action or at the very least be prepared with my research. But for one reason or the other I never got around to doing this and I apologize for that. Not having insurance when you need it and you can afford it is indeed a no-no. I promise to get around to completing this in January, 2012.

{ 1 comment }

Tweets on 2011-06-02

by Vinaya HS on June 2, 2011

in Finance

If I could make one wish, I’d honestly wish that a copy of my Jeevan Anand surrender request letter be stapled right on top of the policy document that you see in the video below. Now, that would be one insane — but totally spot-on — wish, wouldn’t it?



[Here's the video link if you can't watch the embedded one.]

And if you’ve been itching to know how to get rid of your LIC Jeevan Anand Policy, here’s a step-by-step approach to nirvana.

{ 4 comments }

Asked and Answered: February, 2011

by Vinaya HS on February 25, 2011

in Finance

Here’s what was asked and answered by Capital Advisor in February, 2011. If you have a question on managing your personal finances, send me an email and I’ll respond at the earliest. If your question’s beneficial to a wider audience, I’ll publish it in a future edition of “Asked and Answered,” without revealing your personal details.



Query #1: On continuing a guaranteed-return life insurance policy.

I have a question regarding my TATA AIG Maha Life Gold life insurance policy. For a sum assured of Rs 400,000, I am paying Rs 35,000 as annual premium for 10 years. After the 6th year, which is this year, the policy gives me a small cash dividend of around 2%. After the 10th year, a guaranteed annual coupon of 5% that is Rs 20,000 would be paid to me. I am not sure if its good to discontinue this policy at this point of time. Please suggest.

I ran the numbers on this situation — you can download my analysis here — and the results were quite shocking. (Note: The sheet doesn’t consider the paltry cash dividend. Even if it did, the results would still be shocking.) And as I told the reader, “if you play around with the Excel sheet, you’ll find that all TATA AIG needs to do is park your money in a FD and they’d still make money off you! But since you’re already in the 6th year (and I don’t find a surrender option), I guess you have no choice but to continue this policy.”

I then ran the numbers on a similar policy from Bharti AXA called Bharti AXA Aajeevan Anand — you can download my analysis here — and the results were equally shocking.

I’d stay away from such policies. In my opinion, the minimum guaranteed coupon should be equal to the current risk-free rate of return, but then that wouldn’t make business sense to the life insurance company, would it?

Just put those premiums in a Fixed Deposit and you’d do far far better.



Query #2: On the New Pension Scheme.

Could you review the New Pension Scheme (NPS)? I want to invest in a Pension Plan without being taken for a ride.

In my opinion, most Pension Plans, these days, take you for a ride — so much so that sometimes I wonder who the pension is for: you or the insurance company.

While I have a general sense of the NPS, I’m not intimately familiar with its structure and working. Therefore, I pointed the reader to a recent article on NPS in ET Wealth for further information.

Personally, though, when it comes to financial instruments, the NPS isn’t on my radar.



Query #3: On infrastructure bonds.

Have you analyzed the Infrastructure Bonds from IDFC and L&T?

I haven’t. But reader Nikhil Shah was kind enough to share his detailed analysis of these infrastructure bonds some time back.

(Note: Follow me on Twitter, and you’ll have advance access to these downloads.)

{ 1 comment }

This post should actually be titled “How I Made LIC Richer by Rs 90,000?”

First, a background on how this Jeevan Anand policy came into my life. :-)

Towards the end of 2004 and in my early twenties, when I was at the peak of committing one financial mistake after the other (taking loans from my employer, charging my credit cards to shop for things that I really didn’t need, failing to save a rupee, etc.), I bought a LIC Jeevan Anand life insurance policy simply to avoid paying income-tax. This policy required me to pay Rs 25,000 each year for 20 years for a life insurance cover of Rs 500,000. I somehow paid the premium for 3 years (2005, 2006, and 2007) and then stopped because it was exactly at that time when I started educating myself about personal finance and discovered the existence of term-plans. Since the policy was now surrender-worthy, I decided to go ahead and surrender it for whatever it was worth.

However, for one reason or the other, I kept putting off surrendering this policy (even after hearing from LIC that I’d need to surrender and close this lapsed policy before I could apply for a term-plan with them). Now, having recently made this resolution, I finally went ahead and surrendered the policy. The lady at the counter informed me that with accrued bonus the value of the policy now stood at Rs 140,000 but if I surrendered the policy I’d only get a far far lesser amount of Rs 50,000. I was indeed tempted for a moment to have the policy revived but I stood by my decision (and my resolution) and asked for the policy to be closed.

So there you go. I paid Rs 25,000 each year for 3 years, am only getting back Rs 50,000 after 6 years, while LIC pockets a cool Rs 90,000 at my expense. And I write a blog on personal finance!

That apart, I thought I’d share with you the procedure for closing such a policy (it’s somewhat similar to what you’ve read before on closing your unit linked life insurance policy).

Procedure to surrender and close your LIC Jeevan Anand Policy.

  • Get the documents listed below into one file:

    1. Original life insurance policy document.
    2. Original premium payment receipts.
    3. Download this surrender request letter, fill-in your specific details, and print a copy.
    4. Get a copy of the S.V. Application and Form No. 3510/5074 either from your agent or from a nearby LIC office and fill it up.
    5. Photocopies of #1 and #2 above.

  • Staple together the filled-up surrender request letter, original life insurance policy document, photocopy of premium paid receipts, S.V. Application and Form No. 3510/5074 in that order. Let’s call this as our “Submission Packet.” This set of documents is what you’ll need to submit at the LIC Branch Office from where your policy was issued (you cannot submit them at any other branch office).

  • Staple together the photocopy of the policy document and original premium paid receipts. Let’s call this as our “Reference Packet.”

  • Go to the branch office from where your policy was issued and handover the “Submission Packet” at the counter. Once your policy details are verified, the person at the counter will print and sign an acknowledgment receipt. Verify the details on this receipt and attach it to your “Reference Packet.”

  • Wait for the check to reach you by post.

  • Once the check arrives, verify your name and account number for correctness and take a photocopy. Attach this photocopy to your “Reference Packet.”

  • Deposit the check at your bank.

  • Once the check is credited to your account, tear-up your “Reference Packet” if you feel like doing so.

I did. Here’s pictorial evidence.

170120111130

It’s now time to execute the next steps of my strategy.

{ 127 comments }

Resolution #7:
I want to keep my personal finances better organized.

Though I write a lot about managing your personal finances, I often slip-up when it comes to managing my own personal finances. For example, some time back, I wrote a series on organizing your finances. These thoughts originally arose from a personal need for organizing my own personal finances. Though I did complete some of these steps, there’s a whole lot that I didn’t do. So, in 2011, I’d like to organize my personal finances better.

Here’s what I specifically want to do:

  • Get rid of financial clutter. I’ve done this successfully in the past but of late have let a couple of things creep in again. I have a current account into which reimbursements were credited by my previous employer but this account is no longer of any use. This account doesn’t financially justify its existence and hence needs to go. Another thing that I’d like to really get rid of is my defunct LIC Jeevan Anand policy.

  • Create and maintain a master information document. Once I’m rid of all that clutter, I’ll know what my true financial assets are. I’d like to create a master information document that details all of my true financial assets. The purpose behind this document is to have a ready and up-to-date reference available at all times and which can be directly reused at a later time (say when I need to create a will).

  • Get my nominations in place. Once I create my master information document, I’ll know which of my financial assets have nominations that are either outdated or are completely missing. From personal experience, I can advise that for every financial asset that you own make sure that you have a nomination in place. And for someone who writes about personal finance, not having my nominations in place is honestly unacceptable!

  • Put together my personal finances folder. I did get started on this task this year but got sidetracked quickly. I think this folder will be most effective if I do this simultaneously as I build my master information document — what I write in the master information document should be backed by physical documents in the folder.

I think this is a broad enough framework to capture everything that I need to about my personal finances. But the real challenge, as they say, lies in execution. When done though, I will have everything that I need to have about my personal finances in one place.

What do you think? Any suggestions?

{ 0 comments }

Resolution #3:
I will buy term life insurance online. Because I’ve only had terrible experiences with life insurance agents and medical diagnostics laboratories, I will purchase a simple term policy online. I will also ignore all those complex financial models that tell me that I need to insure myself for crores of rupees out of the box (heh!). I will think BIG but start small.

My (mis)adventures in trying to buy term life insurance are legend to regular readers of this blog. From agents who suddenly go missing, to direct marketers who blatantly ask you to lie on the application form, to totally clueless medical diagnostics centers (ironically called Clumax), to insurers who force you to surrender a defunct endowment policy prior to applying for a term policy, I have seen it all.

I’ve also grown tired of those life insurance calculators whose “artificial intelligence” output tells you to insure yourself for crores of rupees. When you can’t buy a term policy for even a rupee, dreaming about insuring yourself for crores of rupees is quite sadistic.

Hence, in 2011, my strategy to buy term life insurance is:

  • No life insurance agents. No direct marketers. No diagnostic labs. Online and faceless is my only option left.

  • Research term policies that I can buy online (only a handful as far as I know). Sum assured will be a [relatively] small but decent amount and for the longest tenure available.

  • Surrender my now long defunct LIC Jeevan Anand endowment policy. Use the proceeds for paying the initial premium on the term policy.

  • [Assuming that I get the policy,] Wait for six months and double my coverage through a second term policy. (And if luck is on my side, repeat this strategy in 2012 — possibly through a different insurer).

Think BIG. Start small. Be faceless. That’s my strategy.

What do you think?

Note: If an emergency fund, health insurance, and zero-debt together form the core of your personal finances, disability or personal accident insurance constitutes the layer on top of the core, with life insurance when you have dependents forming the third layer.

{ 12 comments }

Is the Licensed Agent and even the Direct Marketer straight from LIC who just don’t want to sell you a term policy.

Background: Read my first attempt at obtaining a term policy where the agent ran away and was never heard from again.

In my second attempt, I submitted my details on the LIC corporate website since reader Anand mentioned that doing so would put a Direct Marketer from LIC in touch with you.

He did and this is how our meeting/conversation went:

(Bold text are the Direct Marketer’s words.)

I want the Jeevan Amulya term policy for X amount and for Y years.

What other investments do you have?

I only want a term policy.

What other investments do you have?

Just give me the term policy and don’t bother about my investments.

(Filling the form)…What was the reason for you parents’ demise.

Actual medical reasons A and B.

Let’s just put the reason as old age…LIC will only be concerned if the age at demise was less than 50. 60+ and old age and they won’t bother to check.

What other investments do you have?

I didn’t buy the policy.

Planning a third attempt where I will demand to fill the form myself. Stay tuned.

Anand, if you’re reading this, did you get to fill the form yourself?

{ 2 comments }