LIC (Life Insurance Corporation of India) has been a trusted name for decades, offering life insurance and investment plans that promise security and guaranteed returns. But before you invest, there are 5 crucial things you must keep in mind to ensure you don’t lose out on potential profits.
📑 1. Understand the Policy Clearly
Before signing up, read the policy document thoroughly. Know the premium amount, tenure, maturity benefits, and death benefits. Many investors later regret not understanding the fine print and end up with lower-than-expected returns.
💰 2. Compare Plans Before Buying
LIC offers a wide range of products — term insurance, endowment plans, ULIPs, money-back policies. Each has different returns and risk levels. Compare at least 3–4 plans and choose one that matches your goals (wealth creation, risk cover, or regular income).
📈 3. Look Beyond Just “Safety”
While lic is considered safe, some traditional plans offer lower returns (4–6%) compared to other investments like mutual funds or PPF. If wealth creation is your goal, balance lic investments with market-linked options for better growth.
🗓️ 4. Pay Premiums on Time
Late premium payments can lead to policy lapses, which may reduce your benefits or even cancel the policy. Use auto-debit or reminders to ensure timely payments and keep your coverage intact.
🧾 5. Check Tax Benefits & Maturity Rules
LIC premiums qualify for tax deductions under Section 80C, and maturity proceeds are usually tax-free under Section 10(10D). However, if annual premiums exceed a certain percentage of the sum assured, you may lose tax exemption — so check eligibility carefully.
🎯 Bonus Tip: review Your Policy Regularly
Your financial goals change over time. review your policy every few years to ensure it still meets your needs. You may switch to a better plan or increase coverage as your income grows.
Disclaimer:
The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.
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