[Technocrat]

@bill: Pleas read my post#22 & you will know why I said so

Originally Posted by Hurrycane12

Technocrat: Need to know if term Policy can be used as a investment tool or its just for covering your liabilities.

Hi, I am really not that technical with financial terms. If you mean Tax Rebate in then yes Term plans do give you that benefit. If you mean something else then please elaborate

[Hurrycane12]

Originally Posted by Technocrat

Hi, I am really not that technical with financial terms. If you mean Tax Rebate in then yes Term plans do give you that benefit. If you mean something else then please elaborate

As far as Tax rebate is concerned yes i am aware that we can claim the same.

My question was can a person look at taking a Term Policy and expect growing his finance.

I did enquire with ING sometime back on Term deposit and got to know that for the preminum one pays we get covered for a "x" amount and the returns are not too great at the end of the Term we hardly get anything more than the invested sum.

[pradkumar]

Mumbai, May 8, 2007: LIC Housing Finance Ltd (LICHFL), a leading player in the Indian housing finance sector, has decided to raise resources from individual depositors via an attractive Fixed Deposit scheme. This is the first time since its inception in 1989 that the housing finance company is taking the FD route for mobilizing funds.

The FD scheme has been rated FAAA/Stable by CRISIL indicating the highest degree of safety. Depositors in LICHFL’s FD scheme stand to earn a yield of 9% p.a. on a three year deposit and 9.25% p.a. interest on a five year deposit. The minimum deposit is Rs. 10,000, and thereafter in multiples of Rs. 1000/-. M/s Integrated Enterprises (India) Limited are the Fund Mobilizers to the FD scheme. The company also plans to tap the network of leading LIC agents for marketing this FD scheme. The FD scheme will be initially launched in 30 cities across the country.

Here is the link:

LIC HOUSING FINANCE LIMITED. - -About us

/////// At 9% per year, it will take 8 years to double your money.

Pradeep

Originally Posted by anonymous

Has anyone heard of LIC FD. I heard that you get double of the money in 5 years (Bank takes 9 years and PO takes 7.5 years) in this scheme. Please share if someone has taken it?

[Technocrat]

@Hurrycane12: Ok that way its purely insurance, see

I am currently paying 7200 p.a. For a coverage of 25 lakhs for 20 years So if I my premium till the end of 20 years I will pay Rs. 1,44,000. So if nothing happens to me it will go waste(I still wouldnt think it as waste) But then we dont know what will happen tomorrow & so for this uncertainty & the amount insured what I am paying is really nothing. Besides I always have an option to opt out whenever I feel so.

[NetfreakBombay]

Originally Posted by Hurrycane12

My question was can a person look at taking a Term Policy and expect growing his finance.

No, with term policies you do not get anything back. And thats the intention as well.

A 10 lakh cover costs just 4k per year for :

31 year old male
30 years term (to cover up to retirement)


And MOST insurance policies will recover this cost (4k per year in case of 10 lakh cover) from your investment anyways.

[autoenthusiast]

Hi Everyone, after reading all the above I have decided to reopen a Term insurance policy. My term insurance had expired 2 years back and I never renewed it. I used to have the SBI Life term insurance.
Does any one knows which one is better ? SBI Life or LIC ?

Thanks in advance.

[NetfreakBombay]

Get a quote for new policy.

Reopening a term insurance will not be useful in most cases.

Lets say:

1. You were paying 3k per year for previous policy.
2. It costs 3.3k per year to get a new policy [because rate depends on age etc]

In that case, you will pay 6k to revive the old policy but will get a benefit of just 300 Rs per year. Better to get a new policy in that case.

[autoenthusiast]

Thanks NetfreakBombay, any idea which one would be better and more reliable for a term insurance ?
SBI "Life" Term Insurance or LIC Term Insurance ? As per what I read on the net the LIC term insurance doesn't have an increasing cover whereas in the SBI insurance you can have an increasing cover of 5% P.A or 50% per 5 years. Considering the inflation that would occur over the years I feel the SBI one would make more sense, but I'm only unsure about how very reliable they would be. Everyone seems to have more faith in LIC.

[kuttapan]

Originally Posted by autoenthusiast

Thanks NetfreakBombay, any idea which one would be better and more reliable for a term insurance ?
SBI "Life" Term Insurance or LIC Term Insurance ? As per what I read on the net the LIC term insurance doesn't have an increasing cover whereas in the SBI insurance you can have an increasing cover of 5% P.A or 50% per 5 years. Considering the inflation that would occur over the years I feel the SBI one would make more sense, but I'm only unsure about how very reliable they would be. Everyone seems to have more faith in LIC.

SBI and LIC are both comparable when it comes to premium, but SBI has a cap of 25 years, I think. Avoid the disability premium waiver rider, unless you absolutely need it.

I would suggest LIC, less hassles and you know it has been around for donkeys years and will be.

There are usually 2 term policies. One which refunds the premium paid and one in which the premium does not come back. Premium is a wee bit more in the first case. I suggest the second one, think of yourself as a Ferrari/Lambo/Bugatti and consider taking auto insurance for yourself. You wouldn't take your Ferrari/Lambo/Bugattiout without insurance, would you? Even knowing that the insurance amount is never going to come back.

Term insurance is like one betting the insurance company(for the premium amount) that something may happen to oneself. Insurance company accepts the bet and gets to keep the premium if nothing happens. If something does go wrong, they lose big time and have to pay many times the premium.

Guess who wins?

[NetfreakBombay]

Originally Posted by autoenthusiast

which one would be better and more reliable for a term insurance ?
SBI "Life" Term Insurance or LIC Term Insurance ? As per what I read on the net the LIC term insurance doesn't have an increasing cover whereas in the SBI insurance you can have an increasing cover of 5% P.A or 50% per 5 years.

IMHO you should choose LIC.

Don't think LIC has such option with insurance cover. How much cover are you looking for, and for which age? I doubt that difference in premiums will be substantial if you go for higher cover from get go.

[kvish]

To counter these ULIPs, Mutual funds have launched insurance with SIP which I feel is better than any ULIP since there are some real good funds to invest in and no extra charge too(unless redeemed earlier). One can also save on all entry/exit loads through direct investments.

[anonymous]

Originally Posted by pradkumar

Depositors in LICHFL’s FD scheme stand to earn a yield of 9% p.a. on a three year deposit and 9.25% p.a. interest on a five year deposit. The minimum deposit is Rs. 10,000, and thereafter in multiples of Rs. 1000/-Pradeep

Pradeep,
Thanks for the information. You are rightly said that with 9.25% compound rate of interest, its going to take 8 years to double the money. I will check with LIC to find out if they are also talking about the same scheme or not.

[rkg]

Originally Posted by autoenthusiast

Thanks NetfreakBombay, any idea which one would be better and more reliable for a term insurance ?
SBI "Life" Term Insurance or LIC Term Insurance ? As per what I read on the net the LIC term insurance doesn't have an increasing cover whereas in the SBI insurance you can have an increasing cover of 5% P.A or 50% per 5 years. Considering the inflation that would occur over the years I feel the SBI one would make more sense, but I'm only unsure about how very reliable they would be. Everyone seems to have more faith in LIC.

Need for higher insurance will be more when one is young, newly married with kid. they have more to lose in case of death at younger age.

Insurance requirement goes down as one grows up, as he/she is supposed to save/invest surplus income over the period.

this policy from SBI is waste of money.

compare the premium from different insurers from respective websites for your age/cover/duration. choose the cheapest.

However LIC has two different term policies.

One below 25 lakhs called anmol jeevan - little costlier than others

other for covers above 25 lakhs called Amulya Jeevan- cheaper than others

However it varies from insurer to insurer for different terms/amonuts

Do check for the service tax amount. i was told LIC does not charge service tax(12.36%). where as SBI/ICICI/HDFC do charge service tax on premium

Do not opt for return of premium policies. they are waste

[Hurrycane12]

Originally Posted by Technocrat

@Hurrycane12: Ok that way its purely insurance, see

I am currently paying 7200 p.a. For a coverage of 25 lakhs for 20 years So if I my premium till the end of 20 years I will pay Rs. 1,44,000. So if nothing happens to me it will go waste(I still wouldnt think it as waste) But then we dont know what will happen tomorrow & so for this uncertainty & the amount insured what I am paying is really nothing. Besides I always have an option to opt out whenever I feel so.

Technocrat: Sorry could not respond yesterday; thanks for this looks cool; I am planning to go in for one with ING

[NetfreakBombay]

Originally Posted by anonymous

Pradeep,
Thanks for the information. You are rightly said that with 9.25% compound rate of interest, its going to take 8 years to double the money. I will check with LIC to find out if they are also talking about the same scheme or not.

Banks have raised interest on FDs to 9%, better to go with those then LICHFL. LICHFL deposits are not guaranteed by govt bonds.