I Just Found Out That My LIC Jeevan Anand Policy Sucks. What Should I Do? Please Help!

by Vinaya HS on January 13, 2012

in Finance

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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.



What do you say?

Thanks for reading this article. I'd love to hear your opinion. Please use the comments section below to share your thoughts. I frequently write new articles that also cover several other aspects of personal finance including credit cards, financial goals, health insurance, income tax, life insurance, mutual funds, retirement planning, and much more. You can Subscribe through Email and receive new articles directly in your Inbox or you can Subscribe through the RSS Feed and receive new articles in your feed reader.

{ 26 comments… read them below or add one }

Amiya February 16, 2012 at 8:26 PM

Hi Vinaya,

I have purchased AVIVA LifeLong Unit Linked plan in 2006. I was new to ULIP and just invested for tax saving. Here are the details.
Sum Assured 150000
Annual Premium – 15000/-
Years Paid – 5
Current Value – 84265/-
Surrender Value – 63047/-
after 10 years if i will surrender then there won’t be any charge. Now i got a letter that there is 5% monthly policy admin charge. The fund is not doing well and there is lot of maintenance charges. I came across 1 article saying IRDA restricts fund management charges to 3% for ULIP. is it true, the AVIVA customer care is telling its inline with IRDA. Please suggest should i pay the premium for next 5 years. With current growth can it meet 8% interest rate( if i would have just put in bank fixed deposits).

Fakhruddin May 3, 2012 at 12:14 PM

Hi Vinaya,

Thanks for all the info regarding LIC plans. I had taken three policies (Jeevan anand, Anurag and Surabhi) and now after 2 years I am planning to surrender them (After paying the third premium) as there is no sense in keeping them going. I am just cursing myself as to why did I get into this mess and would have been better off if I had invested in a simple PPF or an FD :(

Vinaya H S May 3, 2012 at 2:58 PM

@Fakhruddin –

Better to consider this as a learning experience. I think all of us at one point or the other in our life have taken such policies and then regretted doing so.

Ravi May 8, 2012 at 5:05 PM

Hi Vinaya, I need a suggestion from you. I am trying to close my Jeevan Anand policy. But the LIC office is making come many times to office and still not letting me close my policy.
First they said that I should wait 3 years until i stopped paying my premium
Later they said that you should get approval from Bank Manager. He did try to convince my that it is a great investment but I did not agree and said the concept of term insurance. He was saying that no company pays that amount and when it comes to paying the lawyers of that company will never let you pay. However I managed to convince him
Next after this, he directed me to other person who takes this closure form. He says that the agent who has attested me is below cader and cannot approve
Later another day he asks me that if I open another policy he will immediately take my form.
This is pure blackmailing. Even the branch manager is not helping.

I dont know how to get money back and I am totally frustrated. This should be eye opener to people who believe that LIC is like god of insurance and can never cheat people.

Vinaya H S May 13, 2012 at 12:05 AM

@Ravi –

After the first 3-years of paying premiums, you CAN surrender and close the Jeevan Anand policy. Anything else that anyone tells you is a lie. Tell them that you’ll complain to the Insurance Ombudsman if they don’t accept your surrender request.

Nitesh. A July 18, 2012 at 12:13 PM

Hi Vinay,

I took education loan almost 10 years back and as a security bank started one LIC policy by my name. Policy premium was equivalent to my loan amount and its term was 100 years . I have paid back my loan almost 5 years back but now i am just paying my policy premium which is just a overhead as every month i have to remember the submission date. Please suggest whether i can update this policy to some short term plan having higher premiums and get the maturity pay out after 10-15 or 20 years or if i can surrender this policy which i dont think is allowed.


Anand Singh August 15, 2012 at 8:18 PM

Dear Sir,

I started my job 4years ago and very soon I got into one of these LIC agents trap, who at that time, showed me so many benefits ( Govt Comp policy-one of them) of buying a LIC policy. So I just bought Jivan Anand with 16yrs payment terms of 14084 annual premium and a sum assured of 2Lakh . The later I bought was LIC Jivan Saral with a lot of search from Internet as well from colleagues and i found it quite good for investment purpose. Hence I bought a LIC Jivan Saral @ 5Lakh SA @ 24020 Annual Prm for 20 yrs paying terms. For this agent told me that I have to pay only for 15 years and rest of Prm will be paid itself by Interest of it.My Queries are as follows:-
1.I am still not able to get how these people calculate the tables and projections they show on their website?
2.How should I calculate projections of my own LIC investments?
3.Shall I continue with LIC Jivan Anand? I had paid 3 prm already?
4. Please Also suggest for Jivan Saral.

Looking forward to hear from you.

Vinaya HS August 21, 2012 at 2:20 PM

@Anand Singh –

1. The logic behind those calculations is known only to LIC.

2. You cannot.

3. and 4. It depends on why you bought the insurance policy in the first place. If you bought it only for investment purpose, my recommendation would be to surrender it.

Anand Singh August 22, 2012 at 7:07 PM

@Vinaya,,,Thanks for your reply….

mrs. dmello August 28, 2012 at 12:31 PM

Hello sir,

need your expert opinion on which jeevan anand policy to discontinue at the earliest and the loss on surrendering-

husbands policy @ age 35 – jeevan anand- start date 23 november 2009- maturity date 23 november 2030, sum assured-15 lacs- premium-82,524

my (housewife) policy @age 30- jeevan anand- start date 26 november 2009- maturity date 26 november 2030, sum assured 10 lacs- premium- 51,510

i dont understand as to why the agent sold a policy to be taken on my name?? premium will be due for november 2012, please help me at the earliest. how much loss will be incurred while surrendering?

thanks and best regards

mrs. dmello


pradeep December 6, 2012 at 3:15 PM

hi i want to know the details of jeevan anand (T-149) policy for SA:5,00,000
term is 7 yrs. how much will i get ? And how much i will pay at the end of term ?
please give me the clear picture/details. now m 24yrs old. please tell me the best plan in jeevan anand policy.

Rahul kumar bansal December 16, 2012 at 1:11 PM

I want take jeevan anand policy for 20years. And if i pay 28000 for 20year. Then how much i will get after 20year

BalajiG.R December 27, 2012 at 6:39 PM

Dear Sir,

I want save the money Rs.10000/- this month onwards. Pls. suggest the best plan and also that savings must be used for Tax exemption. pls. do the needful.


ali January 13, 2013 at 2:28 PM

Please let me know why will b the additional charges to be pay if i am unable to pay the premium of my policy on time. Jevan anand

Deb March 29, 2013 at 12:14 PM

Hi, I want to surrender my Jeevan Anand policy which I bought in 2008 with 21 term years; however I have have discontinued after 3 years of premium payment. Now please suggest if I surrender the policy in 2013, how much I can get?

I have paid 15341*3 = 46,023.00

Bhaskar June 21, 2013 at 8:50 AM

Hi friends,

why all of you guys here are thinking to surrender the policy? recently i brought jeevan anand for 10L and the premium is 50K per year, & this is very good policy as far as i know.. but the thing is you need to keep trust & keep going for long term.. dont be greedy about money by keeping in ulips & FD, in Ulips no assurance of return.. ask your friends who bought ULIPS.. even i brought , paid 3 terms but now market is bearish cant get my paid amount also..& coming to FD.. Yes return will be more.. but also think about tax how much need to pay on profit…but in jeevan anand not like that ..it is completely tax free on return.. and it will give you insurance coverage till 100 years, where no term policy can cover you till 90 years atleast.. take one policy as example.. for 10L – 50K premium yearly need to pay..for 20 years..after 20 years you can expect about 20L return..take home .. and after 40 years if that person expires.. his nominee will get 10L to hand.. means total 30L on average can see..

My suggestion is taking bond is a big good thing every one does.. done see that for short term .. look for 20 years least.. if by that time insured person is not alive atleast his dependents wil get that amount.. & one more thing LIC is a government corporation , look at the graph it has 87% of good performance of repaying after maturity.. where no company do so.. Njoy!

Mouli July 29, 2013 at 2:18 PM

Read the following review in a mouthshut.

Read completely. Makes a lot of sense!
After this and after what bhaskar has told, i believe Jeevan Anand makes good sense to keep till the end! you’ll get ~ 2x Sum Assured(SA) at the time of maturity and also the insurance cover continues till ur time of death! i.e., the person’s spouse/kids receive the SA at the time of his death! This is almost 3X gains for the premium paid. I believe it makes good sense as the entire amount is tax free too!

kumar August 20, 2013 at 4:21 PM

I got these details for investment
Basic amount 12,00,000
Premium amount 60,000 per annum
Term 21 years
Amount recieved after 21 years 30,00,000
Plus 12,00,000 natural life risk

What do you suggest about this plan.please help should I invest or not

Srini August 20, 2013 at 8:36 PM

to the blog author..

One thing you missed in your advice is that the primary purpose of insurance is not to get more interest, it’s to make one’s family get good amount in case of the person earning income passes away.

jaya August 28, 2013 at 12:05 AM

Hi Vinaya,

Thanks for this blog… I would have brought Jeevan Anand however just thought of doing some research before going for it. Thank god I read this blog :)

well I do not own any insurances. I would like to go for one (life insurance), which will help my family in case of my death or might help me in future. which one should I prefer. I do not know anything about this :) Please help

mahesh September 25, 2013 at 6:12 PM

Hi i’m also planning to purchase this,so please give suggestions prons and cons :P


Avnish Sharma October 26, 2013 at 12:47 AM

I have a LIC policy NEW BIMA GOLD worth rs. 1 lac. Which I have started on 10-2010.
Till now i have submitted 5 policies worths rs 2599 each.
At every six month. Total money deposited approx 13000/-
Now i want to surrendor my policy. Due to some urgent requirment.
Please please confirm me that how could i do that amd hiw much money i will get bach if it is possible.

Avnish Sharma October 26, 2013 at 12:47 AM

I have a LIC policy NEW BIMA GOLD worth rs. 1 lac. Which I have started on 10-2010.
Till now i have submitted 5 policies worths rs 2599 each.
At every six month. Total money deposited approx 13000/-
Now i want to surrendor my policy. Due to some urgent requirment.
Please please confirm me that how could i do that amd hiw much money i will get bach if it is possible.
Avnish Sharma

Anonymous November 20, 2013 at 11:11 AM

I took the same policy , there is no wrong for that frustration as its a very long term.\\ But its very helpful once u gonna get a big amount at the age u need. Just hold ur frustration and goahead , expecting that big lumpsum

sanjay kumar Sharma December 1, 2013 at 8:52 PM

Dear sir
Can I close my lic policy when I deposit only two premium. And only 6 month ago I start my policy. Plz reply
Sanjay kumar Sharma

VIDYADHAR December 24, 2013 at 2:23 PM

Send me 5 year paying plan Age 45

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