I am writing this topic on the basis of my own experience regarding insurance mistake. a lot of us blindly buy Postal Life Insurance Policies without weighing its utility just because its sold by Post offices. I am too one of them and regretting my mistake now after getting myself fixed in this trouble for rest of my life.

I have bought 04 PLI Policies of Endowment Assurance(Santosh) in 2010 in parts i.e. 2 lac for the age of 45, 6 lac for the age of 50 and more 2 lac for the age of 60. So in total i have insured myself for 10 lacs at a high premium of Rs 47000/- per year. Post office agent talk about high bonuses on this policies and show you a chart of maturity value in lacs, IT exemption etc. which tempts you to buy this product. But why its a mistake?

Let me tell you now:
1. Bonus is not fixed and it may go down drastically depending upon the acturial valuation of PLI fund. You can see the downward bonus trend in last 2-3 years.
2. Now the most important part i.e. surrender. When you surrender this policy after 3 years, you may get a heart attack due to heavy loss. But even after surrendering it after 5 years when you also get the bonus, surrender value is not so good.

Let me put calculation here:

I have paid around 2.35 lac in last 5 years. Now if I surrender today, I may get around 1.65 lac(70 k less) or may be even less(only around 50% of what i paid) even though with bonus means I have paid 14k per year for insurance of 10 lac. While one can get same amount of term insurance for just Rs. 1200 per year.

So I have bought something for 14k which is actually worth only 1.2k per year. In addition you face all the nonsense of poor services by Post offices across the country. The way surrender value is calculated is ridiculous and worst in whole insurance industry. Actually its loot of hard earned money of unaware govt. employees, who think that just because govt. is involved it must be good.

I have learnt this lesson after incurring heavy loss. So my advise to all the friends here is:
1. Never mix insurance with investment.
2. Buy only term insurance policies. Insurance is meant for safeguarding your family after you and not meant for investing money.
3. Always check claim settlement ratio of the company before buying any term policy.
4. Do insure yourself for the sake of your family.
5. Never buy a Postal Life Insurance.