Is LIC Jeevan Labh a good investment for 10 years?

Jeevan Labh is a typical endowment plan which combines insurance and investment.

• You invest a fixed amount each year for a certain period (premium paying term)
• After the policy term (different from premium paying term) you get back the money with some gain
• You also get life insurance
• Investments enjoy tax exemption under section 80 C
• Maturity amount is also tax free

One of the investment options in this policy is premium paying term of 10 years and policy term of 16 years. Which means you will only get your money back after 16 years!

The policy benefits sound good, however if you calculate the returns from such a policy they will not be more than 4% to 6%. The insurance cover provided is also low. Please have a look at these reviews of other similar endowment plans by financial advisors:

1. Are endowment plans like LIC's Jeevan Anand a good investment option?
2. Is HDFC Life Sanchay Plus a good plan to invest in?

Both the reviews recommend not to invest in endowment plans.

You should not try to mix insurance and investments. Always buy a separate term plan for insurance and use avenues like PPF, mutual funds etc for investment. The insurance cover will be higher and premium will be lower for a term plan.

If you are looking for tax saving with assured returns then PPF is a much better option than Jeevan Labh. Since your investment horizon is 10 years (16 years actually), you should explore investing in equity mutual funds.