LIC (Life Insurance Corporation of India) policies, particularly traditional endowment plans, often feature lower returns (frequently failing to beat inflation) compared to market-linked investments. Key disadvantages include high premiums for relatively low coverage, limited liquidity due to long lock-in periods, and significant penalties for early surrender.
High Premiums: LIC policies often cost more for lower coverage compared to term plans. 4. Inflation Impact: LIC returns can't keep up with inflation, reducing your money's value over time.
LIC doesn't give good enough return and locks your money for a long period of time. Most of the time returns mentioned by Insurance companies are what do with their own calculations of interest. Effectively you get half of they are projecting. There are multiple option to invest which are better than LIC.
There isn't any age cut-off that makes life insurance no longer worth it; it's all about your personal situation. That being said, it is often worth having life insurance after 65 if you have dependents who rely on you financially.
Dave Ramsey advises getting term life insurance only, covering 10–12 times your annual income for a 15–20 year term, to replace lost income if you die, while investing the savings in mutual funds instead of expensive whole life policies that mix insurance with investing. He recommends policies for income-earners and stay-at-home parents, avoiding riders and focusing on simplicity to become self-insured over time.
If you don't “use” whole life insurance, the policy stays active until the day you die — guaranteed payout. Plus, it builds cash value you can use while you're alive. So technically, with whole life insurance, you're always using it — either now or later.
Surrender of policy is not recommended since the surrender value would always be proportionately low. Should you decide to go in for another insurance at this stage further insurance would be available to you at a much higher premium because your age would have advanced since taking out the earlier policy.
10 Best Life Insurance Companies in India 2026
Lack of innovation: LIC is a government-owned company with a long history. However, it has been slow to innovate and adapt to the changing market landscape. This has made it less competitive against its private sector peers. Weak execution: The LIC IPO process was marred by a number of delays and glitches.
LIC policies offer several benefits that are primarily centred around financial security and stability. They provide life insurance coverage and ensure that the policyholder's family is financially protected in the event of the policyholder's demise.
Where, “Sum Assured on Death” is defined as higher of 125% of the Basic Sum Assured or 10 times of annualized premium. This death benefit shall not be less than 105% of the total premiums paid as on date of death. The premiums mentioned above exclude tax, extra premium and rider premium, if any.
Whether it's term or permanent insurance, the golden rule is to get the coverage amount correct. To get the proper amount of benefit so the family is taken care of.
Suze believes that permanent life insurance such as whole life or indexed universal life (IUL) are bad investments, much like other financial entertainers such as Dave Ramsey. In her opinion, she feels you would be better off investing the money you save by buying cheaper term life, than by investing in life insurance.
Life Insurance as a wealth preservation tool: Wealthy individuals use Whole Life Insurance to shelter assets from taxes, creditors, and economic downturns. The policy's guaranteed cash value grows steadily, providing a secure financial base that supports long-term goals.
Suze Orman's view on annuities has evolved: she once largely warned against them but now sees certain types, like fixed indexed and immediate annuities, as useful for guaranteed lifetime income, especially for those fearing running out of money, but emphasizes avoiding high-fee, complex variable annuities and prioritizing core retirement plans like 401(k)s, focusing on PILL (Principal Protection, Income, Legacy, Long-Term Care) benefits while being wary of surrender charges and tax implications.