Let’s compare LIC’s Jeevan Anand plan with the combination of a term insurance plan (Kotak Life e-Preferred Term) and NSC. We have kept the sum assured same in both cases so that if an eventuality occurred the insured will get the same amount.
Insured Age – 35 Years; Term – 25 Years
In first case (Jeevan Anand) the beneficiaries would got the sum assured of Rs 10,00,000 and on maturity of plan the individual’s beneficiaries would have got approximately Rs 10,51,000 (first years and so on). Total return would be Rs. 22,75,000 in 30 years.
In second case (Term Insurance + NSC) the beneficiaries would still have got the sum assured of Rs 10,00,000 with the term plan (Kotak Life e-Preferred Term). He invests the remaining amount in the NSC. The current rate on the NSC is 8%. At this rate, the individual’s maturity value after a period of 30 years would be approximately Rs 33,78,280. But in addition, they would also have Rs 1,000,000, in case of an eventuality occurred to the insured. That is considerably more than what the nominees would have got had the individual invested all his money in an LIC’s Jeevan Anand.
NSC offers 8% interest compounded half-yearly. Due the compounding, the effective rate per annum works out to 8.16%. It is a cumulative scheme with a term of six years, meaning, though the interest accrues every year, it is paid to the investor together with the initial capital invested at the end of six years. For example, Rs 10,000 invested in NSC today will grow to Rs 16,010 at the end of six years.