Shoud I surrender my LIC Jeevan Anand Policy?
I am 26 years married govt. employee. Last year i purchased Jeevan Anand Policy and paid for 13 months (premium about 2300/- month , sum assured-500000, after 21 yrs). i have confusion that i should continue or surrender it.
As explained in this answer - Are endowment plans like LIC's Jeevan Anand a good investment option?, the policy combines insurance and investment. it However it performs poorly on both fronts. I suggest that you read this answer first before reading further.
In your policy, the sum assured of Rs 5 lakhs is quite low. Would this amount be sufficient for your family if, God forbid, something were to happen to you? Absolutely not. You need a sum assured which is about 20-30 times your annual income. So if your annual income is 10 lakhs, then you need an insurance cover between Rs 2 crore and Rs 3 crore. Please see this Q&A How to evaluate term insurance coverage and price?
As far as returns are concerned they won't be more than 5%-6%. Even a PPF will give you better returns along with tax exemption.
Since you have paid the premium for just 1 year and 1 month, I strongly recommend that you surrender the policy and in its place:
- Purchase a term insurance which is about 20 times your annual income. Read: What is a pure term plan?
- Invest in PPF, mutual funds etc for investment.
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