LIC - Good option??

Having an LIC policy is good but the policy holder needs to pick the right policy.

An LIC policy covers the following

1. Life cover
2. Tax savings
3. ROI - Return on Investment


It looks lucrative when an agent explains it but if you are prefering it as an investment option, then you are definitely at loss.

A conventional policy roughly gives you 7% return at the max, which is less that bank FD/RD/PPF/NSC. Its the least you get.

So going for it as a pure investment option ruins your money as your money does not grow (calculate with 7% inflation)

Yes it is a tax saving option but even your PPF is a good tax saver with higher interest rate.

A term insurance is a good option if you need more life cover at a cheaper rate. And again, dont count a term insurance as an invest option. It is just like your medical and bike insurance. You will not get that amount back when you are well and good. You need to renew it every year

Finally, its upto you to decide on what you need. If you think insurance to be a complete package, go for it. But do your math right and confirm that it is a good one.

Questions/Clarifications are welcome!!