Hi

I am a 26 yr old Software professional. I am not well versed with the investment and policy fundas (I am working on it!) so if I say something incorrect, go easy on me!

I currently have a Jeevan Anand LIC Policy with Sum Assured of 500,000. The annual permium is ~25k. It started in Nov 2007 and by Nov 2010 I had already paid 4 premiums. Last year, I was researching on new investment opportunities and came across articles on 'Why NOT to buy Jeevan Anand and similar Insurance policies'. After doing some more research, I became convinced that I would be better off with a Term plan rather than Jeevan Anand. So I did not pay the premium last year with a view of either surrendering the policy or converting it to its'paid up ' value.

But a few days back I came to know that one can get cheaper (and easier) loans against the Jeevan Anand Policy which according to my father is a big advantage. You know the 'kab time kharab ho aur zaroorat pad jaye' wala funda!

So now I am two minds and I hope the folks here can guide me to the right decision.

My questions:

1. How much difference is there in the interest rate for say a personal loan and a loan against the policy? Is is significant enough to keep this policy active?


2. Are there any alternative assets that I can invest in which would yield better results than JA and can be used as a security for loans?


Thanks in advance!

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