Life insurance policies

At some point in everyone's life, one is made to believe and rightly so that his/her life is worth insuring.

And there will be an agent around, a very friendly one who will very seriously explain benefits of certain policies.

Thus I have policies for which I will have to pay Rs. 50000 for another 12 years. This is all because I was promised and sold that along with my life being insured, my money will also grow. Like most, not being money savvy, I loved the idea and commited for something I now repent.

Life insurance policies are not the best growth investment option. If now, I wish to grow my investment, I go for mutual fund, equities, even the goverment bonds pay more.

For life insurance, I would buy term policies which are much cheaper and more meaningful. One has to pay ~Rs 3000/lakh of sum assured for a 20 year policy. So by making a one time payment of ~Rs. 3000, I can insure my life for Rs. 10 lakh. However, for the same sum assured for the same period I will have to pay much more for much longer, this money can be invested wisely to get a return much more that what the LIC policies with money back options can ever return.

So dont be cheated, go for a term deposit and the rest of the money can be wisely invested, even fixed deposites will yield more return ad most importantly, one is not making any long time commitment unncessarily.

Your agents will not tell you about the terms policies as their commissions arent much for these, even the insurance companies dont encourage these as their profits from these arent much. Your money and not your life is what is important to them.