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Life Insurance Corporation of India announced a new insurance policy called ‘Jeevan Ankur’. This policy on the outlook seems to be aimed at attracting those parents belonging to the age group of 25 to 40 years. The official sales brochure of LIC on this product goes on mentioning that “LIC’s Jeevan Ankur is a conventional with profits plan, specially designed to meet the educational and other needs of your child”. Well, I shouldn’t miss this opportunity to congratulate LIC’s marketing team for coming up with such a catchy plan to attract the not so ‘financially literate‘ masses in India!

LICLet us get in to details of ‘Jeevan Ankur’. In this plan, life of the parent will be insured to cover the risk in favor of a named child (nominee). The policy term depends on the child’s age at maturity, which can be a max of 25 years provided the parent buys this policy as soon as the kid is born! Since the policy will be in the name of the parent, there won’t be any death benefit if the nominee (child) expires except that the policy can be continued in other kid’s name if there is one. On death of the life insured parent during the policy term, basic sum assured shall be payable to the nominee by LIC. Also, an income benefit equal to 10% of sum assured will be payable on each policy anniversary, from the policy anniversary coinciding with or next following the date of death, till the end of the policy term.

Another good thing about this policy is that there are riders to top up the insurance. The plan provides accident benefit rider and critical illness rider, of course these riders come with some special clauses which I am not going to mention here. Feel free to read up the sales brochure on official website of LIC for more details. Also, you may want to refer to the ‘benefit illustration‘ on their site for a reasonable understanding of how this plan works.

Since they have illustrated various scenarios so well with an example, I don’t want to repeat it all over here. Instead, I will do a better illustration to make you understand how pathetic the plan is in terms of benefits it offers when compared with that of ‘Term Insurance‘ (pure life cover) products by LIC.

 Jeevan Ankur  Anmol Jeevan  Amulya Jeevan 
Sum Insured in INR 1,00,00020,00,00025,00,000
Age in Years353535
Policy Term in Years252525
Payment Term in Years252525
Premium in INR3,58711,068 9,925

The numbers shown above are obtained from the official premium calculator provided on the LIC website. There will be advantages and disadvantages of each product when compared against one another. There wont be any benefit upon survival in case of term insurance policies. Similarly, you may not have any riders on some of the mentioned plans above. But the insurance is supposed to be for handing risk incase of unfortunate scenarios and not to be used as an instrument for investment.

I would still go with the thumb rule of not to combine investment with insurance, which is fundamentally wrong in my view. Separate out investment and insurance for reaping the best benefits out of every rupee you have earned. If you are not sure about whether your investments are in the right direction or not, read this article titled ‘Are you Investing in the Right way?

{ 27 comments… add one }

  • Sumon

    I want to invest for my daughter from LIC however, i don’t know that one ought to I take. Could you please recommend ME the proper set up on behalf of me.

    • Lakshmi Deepak

      Hi Sumon,
      My self Deepak, , I am working with IBM as an Deputy.Mngr in Bangalore, I am also an a LIC agent since few years, There are great policies from LIC. I suggest one thing for you, since you are the money earner better take the policy on your name instead of daughter. even though you already have some policies there is no harm for you to take some more policies on your name ( since you are the bread earner to the family ). As per me, all child policies are for name sake & it will not give better benefits say like Jeevan Anand .
      Thanks, deepak.

  • Somendra

    Hi,

    I want to take lic policy for my child,so could u suggest me for better policy for child

    Regards,
    Somendra

  • Babu Darla

    Dear sir,
    My name is BABU DARLA and I am 38 years of age having a son aged 15 months. I want to buy a Child plan for my son from LIC but don’t know which one should I take.
    My main aim is to get money for my son education in his 18 year. And also if something happens to me my son won’t get any trouble in terms of money.
    Could you please suggest me the right plan for me. I shall be highly great full to u.
    Thanks n regards
    babudarla

  • Kamal

    Hi,
    I m looking to invest for my daughter who is 10 months young. I have been advised by some insurance advisors to go fo a child plan like jeevan ankur. I doubt, it wud be beneficial in long run keeping in view its returns. Wud request you to suggest for sone plan which is higher in returns and i can expect some good and guaranteed amount on maturity say after 20 yrs.

    Shall i go for mutual fund rather expecting return from such insurance policies. Pls advise because i want some fix amt for my daughter when she touches 20.

  • Child plans are big avoid for investors. It’s not advisable to mix insurance and investment. Child plans are easy to sell due to emotional binding of parents for their kids. But they are harmful for financial health of the parents.

  • shaik madeena

    My name is Shaik Madeena and I am 31 years of age having a daughter aged 2 months. I want to buy a Child plan for my daughter from LIC but don’t know which one should I take.My main aim is to get money for my daughter education / marriage in her 18 year. And also if something happens to me my daughter won’t get any trouble in terms of money.
    I want to make a long term fixed deposit plan in single investment.
    Could you please suggest me the right plan for me. I shall be highly great full to u.

    • Lakshmi Deepak

      Hello Shaik Madeena,

      I suggest to go for Jeevan Anand, and do not go for Child plans. Jeevan anand will give you more returns than any other plans and it covers doubt accident benefit and the life risk is also covered even after the policy terms overs, i.e if policy holder dies after policy term again the nominee will receive the sum assured.

    • Chirag

      I would also suggest to insure yourself and not your child. You can go for jeevan Anand or simple LIC endowment plans. there are plans which give you insurance for double or even of Sum assured. Please let me know if want to know anything in more details.

  • Tariq

    Dear Mr. Mohan,
    My name is Tariq and I am 34 years of age having a son aged 1 year. I want to buy a
    Child plan for my son from LIC but don’t know which one should I take.
    My main aim is to get money for my son education in his 18 year. And also if something happens to me my son won’t get any trouble in terms of money.
    Could you please suggest me the right plan for me. I shall be highly great full to u.
    Thanks n regards
    Tariq

  • Hi Thanks for writing such an informative article. Actually I would now like to seperate investments and insurance

    • Praveen Bothra

      That is perfect planning…….

      Actually never mix the investments and insurance….

      By do it separate these you get better returns and Higher Risk cover…….

      We also proved Full Financial Planning and Investment calculation………..

  • Jayachandran

    Hi Mohan ,

    Thank you tons for a timely information . I Already made mistakes and then this year also I was about make the same mistake of mixing insurance with investment . You saved me. Trying to do some good investment For my 2 months baby’s future education . Any advice ?
    Thanks,
    Jay

  • Saumen

    Hi Mohan, thanks for yet another well composed write up. Very informative. Will request you to provide your in-depth analysis on LIC’s ONE-TIME investment plan…it is very useful for lower-middle-business class people who earns on seasonal business. Thanks much, God bless !!

    • Yes, I have read about the LIC’s Jeevan Vriddhi, a detailed post on that to come soon here.

      • Saumen

        Thanks Mohan…will wait for your post. God bless !!

  • Hi Thanks for writing such an informative article. Actually I would now like to seperate investments and insurance

  • Dear Mohan
    Congratulations for the article.Jeevan Ankur is similar to Jeevan Chaya in which a parents “Chaya” will be always there on the children.
    Term insurance is totally different, in term insurance investor do not get anything at the time of maturity but gets the S.A. if something happens wrong to the investor.
    It depends on everybody’s needs & requirements.
    Thanks

    • Thanks Manohar. Yes, not everything fits everyone. it needs to be custom tailored!

  • Preeti

    Very informative article Mohan. I have been reading your finance related articles. You should write more often like how you used to in the past. Missing some interesting insights that you share. Keep them coming more often.

    • Good to be back! Thanks Preeti, will try to make it regular ;)

      • Preeti

        Thank you. look forward to your articles.

  • shruti

    Hi MohaN, How u doing? I admit,this write up came at the right time when I want plan “INVESTMENT” for my son..reading the LIC’s new plan in paper 2 days back, I wanted to call and look at it seriously. I learnt my lesson that INVESTMENT is different from INSURANCE….I shall give a thought by reading in detail on the plan and then decide if I should go for Ankur plan…. Am quite handicapped in such investment terms, can U pls suggest a good-long term plan for my son, he is 4 months oldnow and would liketo invest for his higher education….pleaseeeeee

    • Hey Shruti! I am doing good, thanks for visiting back :)
      Yeah, it is a trick that LIC plays every year around this time when everyone is looking for some tax saving as the financial year end approaches. Well, it is not just LIC most of the insurance companies come up with such crazy products with full page ads on news papers and TV channels. Drop me a mail, will connect with you to share the little knowledge I have :)

  • This was very informative, especially the links to your posts on how to buy insurance. Most non-term policies are more in favor of the insurance business than the person buying the policy is what I believe. This information and the comparisons are very useful to insurance illiterate people like me who fall for attractive marketing for money back products and equity linked products. I also agree with your point that insurance and investments need to be seen differently. Thanks, Mohan.

    • Hi Subhorup, glad this article and other linked posts were useful for you. Yes, financial education is something we need in India. Many people just go by what the advisor suggests and end up making wrong choices most of the times.

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