When an average Indian is told he needs life insurance, he understands it as he needs to go to LIC. Not bad considering that over the past 50+ years LIC has done a good job of paying claims and looking after people’s money. Now hold on, managing people’s money? Well the word managing is too big and rightly includes mis-managing also I guess.

If you buy a LIC policy thinking of it as a good INVESTMENT, you need to check your IQ and your ability to read. There is NO WAY in hell that ANY company can sell you an ENDOWMENT plan and hope to give you Inflation beating returns.

Even in ULIP the charging structure will ensure that if you do not pay for at least 12 years you are unlikely to get even YOUR premium paid. This is a sorry state of affairs.

If you see how the government has been ‘persuading’ the Chairman of LIc to buy all the governments equities and debt instruments, it is not funny!

I can of course go on and on…buy here is an article well written by Aarti Krishnan in Hindu business line…

http://www.thehindubusinessline.com/opinion/columns/aarati-krishnan/lics-random-acts-of-kindness/article5844913.ece

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  1. LIC is a Pandora’s box! My dad’s generation swears by it, my colleagues and friends despise it! Guess the road for LIC will end with us…unless it straightens up, of course.

  2. There are enough fools in our generation also who invest money in LIC without giving it a thought. or just bcoz someone ‘advised’ them so.

  3. Can’t we file RTI against LIC to get information on
    1. Total money with LIC.
    2. Total invested money in PSU vs others
    3. Returns on PSA vs others
    4. Average returns for last 5, 10, 15, 20, 25….. year period.
    5. Average returns given across plans — endowment, ULIPS, money back term plan.
    6. Growth rate of LIC vs Profit returns % increase for past 5, 10, 15, 20….year period.

    is it tough for any financial journalist to get this information and publish in clear and transparent way. What i understood is that LIC is playing emotionally with financially illiterate people in the name of “Govt of india” company and looting its own people. When i ask anyone why you invest in LIC, then 90% of time i got same answer that LIC is backed by government so their money is safe. Private insurance companies will not return their money and will run away. And i think it is true to some extent after looking as Sahara.

    LIC has easy game…as private sector insurance companies are also playing dirty with its policy holders then why blame common man. He only choose average crook than a bad crook ?

  4. Sachin

    why ask for all this?

    much simpler to ignore LIC and buy term insurance from the CHEAPEST provider.

    and invest in mutual funds.

    Simpler

  5. people like you and me will buy term plan and invest in direct equities.. but their are many gullible who go with LIC inadvertently. They are good guys but lack financial knowledge on how to invest money efficiently. It hurts me when i see aged people being sold ULIP plans or children plans where they do not need one. And even if the plan is good still returns are subpar. Its nothing short of stealing money from gullible people. And frankly agents are also not aware of these pathetic returns..even they are poor fellows working for food. Its a conspiracy of LIC and regulator to keep structure so opaque that it is really difficult for even few educated people to understand and calculate the near exact returns that any plan will give.
    And similar to Subrato Roy i think all former and current LIC chairmans should also be put in jail by supreme court for same reason.

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