Insurance- this word comes to every person’s mind whenever he feels any risk associated with his life. Be it his life insurance, be it home insurance, car insurance and the so on. So, everyone today has taken an insurance policy for himself. It could be either the person is enrolled in his corporate office policy or someone has subscribed to personal insurance policy. But if you ask one general question to any Indian whether they have taken an insurance and the answer would be “Haan, LIC liya hai maine, the best insurer in India?”
So, the word LIC and Insurance has become so synonymous just like search engine and Google. If you ask someone to search online then people say “ki google karke dekh, main google karke check karta u, or iska kya process hai just google yaar, etc?”
There is nothing wrong in it because sometimes the brand visibility becomes so strong that people start recognizing the brand with the product/service and this has what happened with LIC too.
However, the topic here is not about LIC means insurance but the topic I want to discuss here is “whether LIC is the best insurer in India and whether insuring in its policy give the best returns?”
You guys will say if not LIC then who? Not private insurers of course. Private insurers don’t have the government backing. I am putting my hard-earned money in LIC and I want guaranteed returns.
Absolutely correct, nobody wants to burn their hard earned money but how many people know to manage their money? Their investments? Their needs of insurance? Very few, I must say.
Many Indian blindly enroll for LIC policy with just one notion in their head. LIC is backed up by government and hence my money is safe. LIC is best insurer in India. Many people subscribe to LIC policy without doing their homework about their insurance needs, their savings, their financial goal and their tax savings. There is nothing wrong in taking LIC policy, it is just that you need to check whether the policy is really beneficial for you or you just enroll it for the sake of tax saving.
To give insights to you guys, I am presenting to you one scenario where one agent Mr. Sharma pitches to sell LIC Jeevan Anand best policy to Mr. Nalanda at his home.
Door Bell Rings and the door is open by Mr. Nalanda
Mr. Sharma – Good morning sir, I am Mr. Sharma from LIC.
Mr. Nalanda- OH yes, come in Mr. Sharma. I was waiting for you.
Both Mr. Nalanda and Mr. Sharma occupied the seat.
Mr.Naland – So how are thing going Mr. Sharma
Mr. Sharma- Very bad sir, the economy is not in good shape and the businesses are in losses.
Mr. Nalanda- I know, but you need to wait for economy to bounce back.
Mr. Sharma- Due to slowdown, many corporates are also negotiation about the premium or theyhave reduced the sum assured of their policy Individuals have deferred too buying insurance policy.
Mr. Nalanda – Is it?
Mr. Sharma- Anyways Sir, choddho yeh sab batein (Sir, leave this conversation now). I want some signature on your form to enroll for policy.
Mr. Nalanda- Would you like to have a cup of tea?
Mr. Sharma- Yes Sir tea will do. By the way this is the form and you need to answer some of my questions.
Mr. Nalanda- But can you tell me what the name of policy is? What is the tenure? How much amount I need to pay? Monthly or yearly?
Mr. Sharma- Yes Sir, the policy name is new Jeevan Anand . Tenure would be 25 years. Premium would be approximately Rs. 45,000/- yearly. You can pay monthly or yearly depend on your convenience. Believe me, this is the best policy for your investment.
Mr. N : What would be the maturity amount? My age is 30 years. And Tenure of 25 years seems to be good to me.
Mr. Sharma- Premium would be around 45 thousand with around 2% plus or minus. Check the benefit illustration sir which will help you to understand.
Age of the Insured- 30 years
Policy Term – 25 years
Sum Assured- Rs. 10,00,000
Annual Premium – Rs. 45,787
Total Premium Paid- Rs. 11,21,100
Year of Investment- 2019
Mr. Nalanda after seeing the table- So you mean to say if I invest Rs. 11,21,011 in a span of 25 years what I get is Rs.. 36,75000/-
Mr. Sharma- Yes sir.
Mr. Nalanda- What is this Life Long Coverage Rs. 10 lakhs amount?
Mr.Sharma- This is the great benefit of this policy. LIC assures to pay an additional amount equal to sum assured of to the nominee of your policy in case of your death after the maturity of the policy. In the illustration case is Rs. 10 lakhs hence an additional coverage. Isn’t it great? What do you say?
Mr. Nalanda- I will not enroll for this policy. Don’t think so it is a great one.
Mr. Sharma – But why ??? LIC is the best insurer in India at present