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I have taken a life insurance policy from ICICI called "ICICI Pru Saving Suraksha LP". The details of my policy is given below.

Term: 15 years
Premium Amount: Rs 50,000.00
Sum Assured: Rs 500,000.00
Frequency of Payment: Annual
My age: 23 years (Non-smoker, non-alcoholic)

I want to know how much return will I get after the maturity?

Support docs: https://www.iciciprulife.com/public/Brochures/Savings_Suraksha_brochure_New.pdf https://www.iciciprulife.com/public/Life-plans/Savings_Suraksha.htm

PS: I feel, I actually made mistake. To save tax, I just bought policy without any kind of research.

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    You are paying a premium that is 10% of the face value of the policy and you will be paying it for 15 years? Normally, with whole-life policies (which, in India, are loved as the greatest invention since sliced bread), you get the face value of the policy at the end of the term. If that is so, then it is up to you to decide whether paying Rs 750K in 15 equal installments of Rs 50K in order to get back Rs 500K after 15 years is a good thing to have or not. – Dilip Sarwate Dec 22 '14 at 4:49
  • So you mean to say I will lose Rs 250K? Then what is whole benefit of the policy? – Xyroid Dec 22 '14 at 7:03
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    All insurance is a gamble. With a term life policy, you are placing a bet (the premium that you pay) that will return a huge amount (the face value of the policy) if you should die. The payoff is huge, but your beneficiary gets the payoff only if you die. Whether you view this event as a win is up to you. With whole life policy (which is what you seem to have), your beneficiary gets the face value if you die, and you get the face value if you survive the entire period. Premiums for whole life are much higher but the total sum of the premiums usually is smaller than the face value. – Dilip Sarwate Dec 22 '14 at 14:22
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    Reading the prospect, you have 14 or 28 days to cancel the contract, depending on how exactly the contract was entered. So there may still be time to do some research. There is some cost involved with cancellation, but if the deal is no good, then it would be better than paying for many years. – gnasher729 Dec 23 '14 at 14:58
  • I have paid one premium already in last year. Next is due in March 2015. What to do now? – Xyroid Dec 23 '14 at 16:37
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Consider buying a term insurance for 1 Crore for ~8,000RS on-wards at your age. And invest the remaining in 42,000 in anyone the top rated ELSS mutual fund. Continue to do this for 7 years, you would far out smart the insurance you have taken.

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The insurance premium depends on your age, but it seems absurdly high.

To get a better handle on the payments, I'll split it up into two parts:

You pay 30,000 per year for 15 years (450,000 total), and after 15 years you get 500,000 if you live; if you die, they keep what you paid and you stop paying. Not a good deal. 11% interest after 15 years and you lose it if you die.

You also pay 20,000 per year for 15 years (300,000 total), and if you die, your heirs get 500,000 and you stop paying. In the UK, as a 30 year old smoker you pay about £6.80 a year for £100,000 life insurance (risk only), that would be £408 per year for £500,000. You are paying 20,000 per year.

Xyroid, you asked what's the benefit of the policy: The benefit is filling the pockets of whoever sold it to you.

Edit: Looking at their prospect, the "500,000" is a meaningless number. They suggest that your payout after 15 years should be substantially higher than 500,000. Much of it is not guaranteed, but estimated, so you will get more or less money, depending on probably how well they invest your money. So this is not the ripoff that it first seemed to be.

Premiums for insuring a payment on your death should be really low unless your age is 50 years or upward, so you can mostly ignore this. Which means this is not really a life insurance at all; it is a tiny bit of life insurance, together with a huge 15 year savings contract.

You should find someone who is willing to go through the numbers with you and figuring out what you signed up for. But I must say, you should have asked your question here before signing.

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So finally I understand what would be return of this policy. At maturity I will get

Maturity Benefit =

  • Guaranteed Maturity Benefit (GMB, which is decided according to insured person's age, gender, premium amount, term, etc parameters) +
  • accrued Guaranteed Additions (5% of GMB fixed, which will be added for 5 years only) +
  • vested reversionary bonuses, if any (yearly added which depends upon investment returns) +
  • terminal bonus, if any (Which will be declared at the maturity which also depends upon investment return)

I will pay premium for 7 years, not for 15 years. It's maturity period.

Bonus declaratios can be checked from here

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