I am talking about specific endowment policy: Jeevan Anand. Firstly, there was old Jevaan Anand (Plan 149). And now there is new Jeevan Anand (plan 815). I had old Jeevan Anand policy. It is endowment policy (lifecover + maturity amount). My agent gave me very detailed quotations. I have uploaded the quotation on my dropbox: link
I paid only one premium, but then reading online I felt as if the policy is not that good. So I discontinued it. Now I got a revival notice from LIC saying better bonus accrued. My agent also called me back saying try reviewing quotation, the new policy is not that good, but old one is just fine.
I am trying to evaluate it only in terms of returns, not life cover (though I know facts like I should not mix investment and lifecover, since I just want to give it a try to know, say, how it fairs against FDs and other tax saving options like PPF. EPF).
My yearly premium is Rs. 26289. On this amount I will save tax of Rs. 7887. So net premium is Rs. 18402. If I take 7.5% annual returns quarterly compounding with zero initial investment and if I create one FD every year for 20 years, on 20th year I will get 8.7L on FD of Rs. 18402 and 12.5L on FD of Rs. 12.5L (LESS TAX). Calculations can be seen in this screenshot: link
Now with the policy I will get 9.65L at the end of 20 years as can be seen in quotation. (I will also get 5L when I am 100 years old, which I am ignoring since I cant see how much actual value will be considering inflation).
As per quotation the policy gives 8.53% returns considering tax benefits. Plus any bonus and finally a life cover. Isnt it good? Should I revive this policy? Or am missing something? Does it fair good against popular tax saving options such as PPF, EPF (which also offer 8.0+ interest rate)?
Am noob in finance. Just trying it out.