LIC Jeevan Anand is a combination of Endowment Assurance and Whole Life plan which cover you against death throughout lifetime with a provision of paying a lump sum amount on survival, at the end of chosen term. This means either your nominee will receive death benefit in the event of your death during policy term or you will receive maturity benefit on survival. If the policyholder dies after the term, nominees will still get death benefit.

LIC Jeevan Anand is not a recommended policy and the returns on it are quite low. As a long-term investment, it is unlikely to beat inflation.

If you surrender now, the insurance company will pay a guaranteed surrender value equal to 30% of all premiums paid after deducting the first year's premium. In practice, the Corporation will pay a Special Surrender Value - which is either equal to or more than the Guaranteed Surrender Value. The benefit payable on surrender reflects the discounted value of the reduced claim amount that would be payable on death or at maturity. This value will depend on the duration for which premiums have been paid and the policy duration at the date of surrender. In some circumstances, in case of early termination of the policy, the surrender value payable may be less than the total premium paid.

Surrender the policy and start investing in mutual funds based on your objectives. To start with, you may invest in balanced funds or ELSS.

To know exact amount that you will get on surrender, you need to talk to insurance company.

This policy can be surrendered at any time. However, if you surrender it before completion of three years, you will not get any sum in return. On surrendering after three policy years, the insurance company will pay a guaranteed surrender value equal to 30% of all premiums paid after deducting the first year's premium. Let us calculate your loss in both the cases.

Case 1: If you surrender now, you will incur a loss of R52,000.

Case 2: If you surrender after third year you will incur a loss equal to R62,400.

You made a wrong choice while selecting this policy for tax saving purposes. The only choices you have now are to either compromise on returns or forget about premiums already paid to surrender the policy. We think it would be better to surrender your policy and limit your losses now itself. In some cases, the insurance company may also pay a special surrender value which will depend on the duration for which premiums have been paid. However, no quantitative details of this are available in the policy documents. Nowhere do the policy documents say that the entire money will be refunded if you pay premiums for five years. The agent seems to be making misleading claims, to earn his commission.

LIC Jeevan Anand is a combination of Endowment Assurance and Whole Life plan which cover you against death throughout lifetime with a provision of paying a lump sum amount on survival, at the end of chosen term. This means either your nominee will receive death benefit in the event of death during policy term or you will receive maturity benefit on survival. If the policyholder dies after the term, nominees will still get death benefit.

Looking at your case, you are paying nearly Rs 50,000 annually for a Sum Assured of Rs 15 lakh and an annual bonus. This bonus has ranged between 4 and 4.3 for a period from 2004-05 to 2010-11. On an average LIC Jeevan Anand has declared an annual bonus of 4.1 per cent per annum. LIC may also add a Final (Additional) bonus if you hold your policy for a certain period.

This policy is costly and lacks transparency as well. Looking at the annual bonus rates, even a bank fixed deposit will give you better guaranteed returns. If you buy the Amulya Jeevan term plan, it will cost you one-third of what you pay for your current policy. In Rs 15,000 per annum you can nearly triple your Sum Assured to Rs 50 lakhs with a policy term of 35 years.

Buy term insurance plan without any delay to protect your family against financial distress in case of any mishap. As far as switching from this policy to LIC Amulya Jeevan Plan is concerned, it is not possible. You cannot even surrender your policy before completion of three policy years. However we recommend you to stop paying premiums from now. Though it will put you into immediate losses but will simultaneously save your losses to grow further. Make sure you buy a Sum Assured sufficient enough to take care of your dependents at least till their lifetime or till someone else in the family can replace you as bread earner.