Insurance as an investment product : Is it really worth??

Insurance vs Investment :

Currently in different TV channels or Financial articles we often came across the topic that insurance is not a good investment product.Is it really true? Let us dig it up a bit.

Various Insurance products

Insurance Companies like LICs , HDFC , MAX ,SBI Life they offer a various kind of Insurance product.

• Pure term life Insurance : This product gives nothing to you.You pay the premium and within the policy tenure if you die the total sum assured amount will be given to your family.It has zero maturity benefit so many people are not interest.
  * This product is highly recommended for the main earning member of the family.
  Buy online version of the term plan to get cheaper premium rates.

• Endowment Plans :  Here you have to invest x amount yearly for y years and after z years of lock-in period will get an maturity amount which consists of Bonus + Premium amount + other.
  * Not recommended for average income people (3-7 lakhs).This will definitely help to save your tax.But only to save taxes one should not invest here because it provides return at around 6% now which lower than F.D. interest rate.
• Savings Solutions :  These have also tax benefit, but yields very lower return on maturity. Premiums are also High.
  Popular schemes : LIC Jeevan Anand, Jeevan Saral etc.
  *Not recommended for investment.
  
• ULIPs:  This is the most sold  misleading product by the brokers.This is a big trap.For example In HDFC ULIP if you invest 50000 p.a for 10years.After 20 years the maturity value would be around 13 Lakhs.
   But instead of it we put that 50000 for 10 years in RD and will put the maturity value for FD of 10 years.We will get 18 Lakhs+.
  
  
  So choose wisely your insurance product.Buying only an online term plan is enough for your life cover.Diversifying investment with several insurance product is ultimately a loss.

Way out : Put your extra money on the Govt backed debt fund like PPF which will give you 8.7% p.a. tax free interest with a lock in period of 15 years.

If you are not comfortable with Lock in of 15 years, invest in Tax saving FDs for 5years.