Blame LIC agents!

Do you believe that your LIC agent is telling all the right plans for you? Have you ever heard of an insurance plan that does not give anything you in return? If you have not heard something like this, the chances are more that your friendly LIC agent has kept you in darkness.

It sounds good that one should not go for ANY insurance product, which does not give any lump sum return after a stipulated period of time. But in reality, it is not so. This is a myth. Term insurance is the simplest and powerful form of insurance, which will not give you a penny even after sincere payment of premiums every year. Does it feel awkward? If I say something like you invest X amount every year, for 25 years and you get Y amount after 25 years, say normally with 8% return per annum. This seems to be convincing, right! Your LIC agent is exactly doing this trick.

Term insurance will provide you the full insured amount only after the insurer death to the nominee. But the premium for a hefty insured amount like 25 lakhs to 35 lakhs is minimum, when compared to premiums of endorsement insurance, money back insurance and ULIP.

But what is the disadvantage of promoting a term insurance product? The answer is simple. Due to its low premium amount, your friendly LIC agent will get less commission on your policy. More the premium amount, more the commission. Are you shocked? Yes. That is the fact. Popular LIC has got only one term insurance plan so far in their portfolio, I think. Agents will always talk about your child's future and your future etc., and they conveniently avoid topics like personal death and total permanent disability etc. Even if you ask them about those details, they will simply say," Why are you thinking about such inauspicious things? Why you are not thinking positive?"This would be their usual reply. Remember but there are some personal motives behind this answer.

For example, in my case I have one LIC money back plan (hope it is Jeevan Surabhi). The details are:
Insured amount: 1 lakh
Premium quarterly: 2695
In case of death: I get 2 lakhs + some bonus (Which will never exceed 3 ~ 4 lakhs)

I have one ULIP from Birla Sunlife (equivalent to term insurance - It is not a pure term insurance product. But the premiums will be closer to this amount). Total insured amount is 35 lakhs and the premium is 9300. See the difference!

The LIC agents must be blamed for demoralizing Indian women and their families by creating and maintaining a negative and sinful impression that the money obtained after the insured bread winner's death as "Widow's money". Also they were very successful in creating one more myth that using widow's money indicates ill fortune and it is not good for the entire family.

Enough said; now LIC is changing to create some more term insurance products only after some private insurance companies were successful in creating a good market share.

Final word:
1) Don't unnecessarily include investment and insurance together. Prioritize your needs and decide.
2) Not all the insurance products that give you "something" in return are the good product.
3) Don't go by any insurance agents' word. Break your head in deciding the right product for you.
4) Get a term insurance for yourself especially if you are the earning member.