I am going to opt for one of the plans of SBI life insurance.?

I want to pay around one lakh per year scheme for a minimum period of FIVE Years. they say after due date I will get around EIGHT Lakhs.
Is this SBI plan ok ? May i invest ?
Please do not say ” It is your money and you are free to use it as you like ”

7 Replies to “I am going to opt for one of the plans of SBI life insurance.?”

  1. I Spent nearly 30 minutes to write this article. I will be happy if you spend at least 10 minutes to read this. Because knowledge alone creates money.
    Before you put your money in that plan

    Ask yourself the following questions?

    1) What is the name of the plan?
    2) What is the purpose of investing?
    whether you invest for your children or to generate wealth or for pension.
    Because these are the common available plans with any life insurance companies for investment plans. They are
    Children plan – That is for the purpose of your children. this money will be available to you or to your child only after his/hers completion of 18th age.
    Wealth plan – It is the plan which is available purely to generate our wealth.
    3) Do you have the enough financial support to invest 1 lakh per annum for at least 3 years?
    (Because once you started your investment you have to stay in that plan atleast for 3 years is the rule given by IRDA). Even if you pay 2 lakhs at the end of 2 years and want to relieve from that plan it will not be possible and you might be in a risk of losing the 2 lakhs money.
    4) Why have you chosen to invest for 5 years?
    Most of companies charge fee for these investment plans in the initial 3-6years only. Thus when you start invest at the first time you pay 1 lakh. But subtracting the fee charges your amount of investment will be lesser than that only. say if the fee charges are 10% for the first year then your investment worth only of rs.90,000. After 5-7 the charges are negligible and that is when your investment has a lot of opportunity to grow. If you keep it for a longer period of time for say 15 years or more only then you can reap a good profit or otherwise don’t go to ULIPS. Because you can make money from other products too. Such as Mutual funds, Recurring deposits, fixed deposits and Share market.
    5) Why did you chose to invest 1 lakh as one time investment/year. Why didn’t you select investing 1 lakh by separating it 50,000 once in 6 months. 25,000 once in 3 months.
    (If you would have advised by your insurance agent in that way ask him whether there is an option of investing money monthly or quarterly or half yearly wise. Most of the insurance agents get good commission on the money that you invest. So they usually ask you to invest huge amount at the first time itself. What if immediately after you invest 1 lakh the market goes down. at that time you would think it would have been better if could have chosen 50,000 once in 6 months plan. think over it.
    6) Do you know where the money that is collected from you is invested. it is also invested in Share market. Then why do you think you have to go to an insurance product instead of share markets?
    (If lack of knowledge about the share market is your answer for this question. Look for mutual funds it is purely available to generate wealth where even persons who don’t know anything about share markets also generate wealth. persons who can invest Rs.500/month also can join in this.

    1 lakh is not a small amount of money. So consult with mutual fund advisor (not agents) before invest your money. After consulting with them if you feel like investing in mutual funds ask the advisors to give the name of 3-4 mutual funds which perform really good and then select all of them and invest even money in all of them say 1000 in each/month. So 4000 in total/month. Because if one of the funds doesn’t perform well another will perform. this is the wisest method.

    Select only SIP method. that is investing money in monthly wise. Even if your advisor suggest you to invest a lump-sum amount at one time don’t agree with it.
    (If you want the reason for this collect data from your advisor or from anywhere about the past performance say for past 10 years of SIP investment on one particular mutual fund and normal mode of investment and compare both. You will find that in most of the funds SIP method would have given better results.

    Even after consulting with advisers if you feel to continue this insurance) plan. Plan for a longer period say 10 or more years.

    “All the Best”

  2. I think i give you a clear picture when you tell me about plan name which can discussing with your agent.


    Ideally you should buy ONLY TERM PLANS. And INVEST the premium saved in better avenues like PPF / SIP IN MUTUAL FUNDS / DIRECT EQUITY.

    Returns from insurance policies will hardly beat real inflation.

    No insurance company can guarantee HIGH RETURNS.

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  5. We are ethical and strongly believe in the principles of Business Ethics. Thus we cannot favor one policy over the other unless we know what exactly your needs are.
    You could call us up for free on our toll free number 1800-103-9222 and we can discuss the advantages of this product and how it can be used by you in the most cost effective way.
    Or you are welcome to check out website InsuringIndia.com

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