Q. – Is it better to go for an annuity like Jeevan Tarang of LIC or an MF with term insurance.Annuity offers returns for lifetime whereas MF does not.Also please tell me which is the best annuity available.My age is 39 and i am due to retire on age 58? – Vinod Pulari

ANS. – Dear Vinod Pulari, Plz. don’t opt Jeevan Tarang, for ur age the return from this policy r very poor. Sample this –
For a 5L cover, for ur age, the prem. for 20Y policy = 24610 Rs.

Hence total prem. paid over 20 years = 492200 Rs.
For past 4 years the LIC have announced 48 Rs. bonus per annum per 000 sum assured, so we can take this as benchmark for our calculation.
At the end of 20 year, u ‘ll get amount = 20*48*500 = 480000 Rs. or appx. ur prem. back.
From 21st year u ‘ll get 25000 Rs. (5% of 5L Rs.) as survival benefit every year tax free till u r alive.
After ur death, ur nominee ‘ll get the basic sum assured of 5L Rs. back as maturity benefit.
Now compare this with the combo of PPF+Term Plan (Anmol Jeevan from LIC).
Plz. note cheaper term insurance plans r available in market but i’m limiting it to LIC’s Anmol Jeevan for comparing of product within same Ins. co. The annual prem. for 5L cover for 20 Year plan = 3193 Rs.
difference in the prem. = 24610-3193 = 21417 Rs.
Invest this amt. every year in PPF, at the end of 20 year, the amt. in PPF = 10.58L

Withdraw from PPF amt. equal to bonus declared by LIC = 10.58L – 4.8L = 5.78L Rs.
This 5.78L Rs. ‘ll remain in PPF ‘ll earn interest for next year. After 1 year the interest on 5.78L Rs. = 46240 out of which u may withdraw 25K Rs. as tax free.
Balance amt. ‘ll remain with PPF & like vise every year, u ‘ll withdraw only 25K & the PPF amt. ‘ll keep on increasing.
Plz. note in this case even after 25 years or 30 years from now onwards or for ur age of 65-70, at ur death, ur nominee ‘ll receive more than what they ‘ll get in Jeevan Tarang (the basic sum assured of 5L Rs. only).
Now do tell me, what r u going to opt? Plz. note here i have not advised to invest in any Eq. MFs for betterment of return. U r already aware that PPF is one of the safest scheme.




  1. lakshmipathy says:

    Great Explanation as always as your trademark. Thanks for teaching

  2. william alphonso says:

    pls can u tell how much bonus i will get for my jeevan tarang policy of ten lakhs for ten years period upon maturity?!!

  3. Raju Deb says:

    Dear Sir,
    i am buy Jeevan Tarang lic policy Table No.- 178
    My age 34 years
    Premium paying term: 20 years.
    Premium Rs. 12,562/- quarterly.
    Sum Assured Rs. 10,00,000/-
    How much maturity bonus amount i will get at the end of 20 years.
    and jeevan tarang lic policy other benefit.
    please reply me.

    • ashalanshu says:

      Dear Raju, The JeevanTarang policy Bonus are not guaranteed but based upon the past data for your 20Y policy, you may expect 48 Rs. per 1000 sum assured per year. So the Bonus calculation ‘ll be like this –

      Bonus for year = 48 * 1000 (1000 multiple of your 10L sum assured) = 48000
      Total Bonus for 20Y = 48000 * 20 = 960000 Rs.

      At the end of term i.e. 20Y you ‘ll get back this bonus amount as partial maturity amount. After that every year you ‘ll get 5% of sum assured i.e. 50000 Rs. as survival benefit from next year onwards.

      As your qtly prem. is 12562, so your yly prem. = 50248 Rs.

      So your total outgo for Prem. payment in 20Y = 50248 * 20 = 1004960


      • Abhishek says:

        Nice to know…
        Dear ashalanshu ,
        Already I took a Jeevan Tarang policy of 57864 Rs. per years till 20 year from 2009 , how much i will get after maturity and
        Can i switch this in to other better ..pls suggest .

        • ashalanshu says:

          Dear Abhishek, what’s the sum assured in this plan for you? Please update.



          • Abhishek says:


          • ashalanshu says:

            Dear Abhishek, in this plan, Bonus rate is not gtd, If we assume that same bonus rate ‘ll be there for all these 20Y, the maturity amount ‘ll be 11.52L Rs. Now from 21st years on wards, you ‘ll get 5% of this 12L Rs. which is 60K Rs. as an annuity or should I say 5K mly. Can you arrange a better annuity on your own? Please think over this.



          • Abhishek says:

            Return After Maturity-Bonus 48Rs. per 1000 Rs. of Sum assured at the time of Maturity of 20 years(20*1200*48=1152000 Rs.)
            yearly Return:-5.5% of Sum Assured PA (66000 Rs. p a)

        • Abhishek says:

          thanks ashalanshu
          pls suggest ,How i can exit from current plan

  4. srikanth says:

    Your explanation is really good.Only risk here is we are assuming PPF gives 8% returns.

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