Is LIC Policy a Good Investment?

1952

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LIC is one of the most trusted and reliable public sector insurance companies in India. The company has been serving customers with their varied insurance needs for a number of decades now. Let us know more about LIC policies in this post. 

LIC is a government backed insurance company known for its enduring commitment for its customers. Over the years, the company has grown manifold to become India’s largest insurer in the public sector domain. With consistent returns, LIC policies over the years have helped many people with financial security. In this post, we are talking about how good an LIC investment is?

About LIC 

LIC or life insurance corporation of India was established in the year 1956 and it functions with a customer base of 250 million. With a 60% market share in the insurance sector, the company is serving its huge customer base with varied plans and products.

Moreover, the insurance company has a distinctive base of distribution network that comprises over one and a half-lakh insurance agents, partners and online channels of sales etc. Among the various products offered by LIC include ULIPs, pension plans, endowment plans, money-back policies, life and term-insurance policies and many other LIC new policies.

Why should you purchase LIC policies?

Being a government backed insurance provider, LIC policies have always been regarded as safe insurance schemes. The company has also consistently reported a high claim settlement ratio (CSR) over the years. The CSR portrays the total number of claims being settled by the insurer as compared to the total claims raised by customers within a year. LIC has reported a CSR of 98.62% in FY 2020-21.

Over the years, LIC policies have ensured that the family members of the insured receive the best benefits to lead a comfortable life in case of sudden demise of the policyholder.

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Are LIC Policies Promising Avenues of Investment?

For people who want to maximize savings and to receive good returns on investments, Life investment plans by LIC may or may not suit their purpose as they are mostly available with a low rate of interest. So, to tackle the high inflation rate in the best possible manner, LIC has come up with ULIP and other lucrative plans that serve the purpose of both insurance and investments for the policyholder. LIC also offers other medium to high-risk plans to customers for them to gain better.

However, insurance plans of LIC also offer different benefits. They are low in terms of risks and allow decent returns. They also ensure the financial security of your dependents in the event of your sudden demise.

Benefits of purchasing LIC Policy

There are multiple benefits of LIC policies as mentioned below:

Government backed plans:

LIC is an Indian government backed insurer and thus offers safe and reliable plans of investment.

Tax Benefits:

The LIC policies allow the insured to enjoy tax saving on the paid premium. Even the maturity benefits are subject to tax exemptions.

Additional Returns:

LIC also offers customers with additional returns by investing the premiums that are pooled in from policyholders in government securities. The profits earned from such investments are offered as extra earnings to its customers as bonus.

Financial Security:

LIC plans provide financial protection to the dependents of insurance policyholders and they secure the future of the nominees in case any misfortune befalls them.

Different types of LIC plans

Here’s a LIC plan list with some of the different plans offered by LIC: 

Term Insurance 

Life Insurance

TROP

Term Insurance for senior citizens

Term insurance for NRI

Endowment Plans

LIC critical illness plans

LIC child plan

Term saving plans

Term plans for family

LIC Mutual fund

LIC SIP

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Are there any shortcomings of LIC policies?

The only thing that you may have double thoughts about while investing in LIC plans is that the interest rate offered under the scheme is very low as compared to market-linked investment instruments. So, you may receive low returns on LIC plans when they mature as compared to what you can receive under FDs and PPFs. So, looking at the inflation rate, LIC plans might not be able to cover you well. However, if you have other investments/savings along with LIC, you may be able to ensure enough protection.

To Conclude  

To have a balanced box of financial planning, it is important to purchase insurance, while also investing in investments. Thus, it is important to give equal importance to both the plans while doing financial planning.

With LIC policies, you are sure to get good benefits and security of your family in terms of finances after you are gone. But to generate enough corpus, they may not serve your purpose. Hence, you should look at investing in a diverse portfolio of financial instruments to serve your different purposes. You can check for LIC insurance share price or LIC stock price before purchasing an LIC plan to get better information and benefit.

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FAQs: Is LIC Policy a Good Investment?

How safe is investment in LIC?

Since LIC is a government organization, the investments of the people under LIC are absolutely safe.

Is LIC a good investment?

Yes, LIC plans are good and 100% secured investment policies.

Is LIC better than mutual funds?

Life insurance is less risky in comparison to mutual funds.

What are the benefits of LIC policy?

LIC policies allow guarantee of government backing, hence they are reliable. They help in tax exemptions, and guarantee the security of your family after you are gone.

What are the best LIC plans?

~ LIC Jeevan Umang
~ Bima Jyoti Plan
~ LIC SIP plan
~ LIC New Jeevan Anand plan
~ LIC New Pension Plus plan

What are the different types of LIC insurance policies?

~ Insurance
~ Endowment
~ Money-back
~ Term plans
~ Pension plans
~ ULIPs etc.

Can I buy LIC policy online?

Yes, there are many LIC policies that are available online these days to suit the needs of customers accordingly.

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May 17, 2023
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PayBima Team
PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.

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