Ask Money Today: Should I surrender my existing term plan to buy bigger insurance cover?
Never mix your insurance and investment. If you mix both, you neither get adequate insurance cover nor adequate returns on your investments
Insurance and investments are different products and serve different purposes
I am 35-year-old and have invested in LIC Jeevan Anand policy, which has an annual premium of Rs 16,171 annually for a sum assured of Rs 3 lakh. The term of the policy is 20 years. I have already paid the premium for 11 years. I also have a term plan for 28 years, with a sum assured of Rs 50 lakh. Now I want to buy a term plan of Rs 1 crore for 40 years. I wish to stop my existing term plan and buy a new one. Please advise, should I surrender my LIC Jeevan Anand Policy as well?
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Last Updated: Jun 01, 2021, 09:02 AM IST
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Synopsis
As with everything in life, there are some things that you actively participate in and some others where you are passive.
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As with everything in life, there are some things that you actively participate in and some others where you are passive. Active participation is when you are directly engaged and involved in the outcome. Passive participation is just the opposite, wherein you observe the proceedings without directly influencing the activities or their outcome.
When it comes to investing, the same principle applies. You can actively invest in specific stocks and create a portfolio or you can just invest in a basket of stocks selected by someone else using pre-determined rules. Some of the foremost amongst such investments, are ETFs and Index Funds. Both these asset classes originate from the same family of passive funds, which mirror the Index