Millions of Indians hold endowment or money-back policies earning 4–5% while paying for tiny insurance cover. Here's how to decide — with real math, not opinions.
WhatsApp us your policy details; we'll compute the IRR and tell you honestly: continue, paid-up, or exit.
📅 Book a Free Call 💬 WhatsApp UsList every premium paid and every payout received (including maturity). The internal rate of return (IRR) is the truth:
| Option | When it makes sense |
|---|---|
| Continue | Policy is past 70–80% of term, or surrender charges still brutal, or you need the forced-saving discipline |
| Paid-up | Stop premiums, keep reduced cover till maturity — good middle path after 3+ years |
| Surrender & redirect | Early years, low IRR — take the hit, redirect to term + investments |
Example: ₹50,000/year for 20 years = ₹10L paid. Maturity ~₹14L → IRR ≈ 4.3%. The same ₹50k in a 70:30 equity-debt mix at 10% → ~₹31L. The gap — ₹17 lakh — is what the 'safe' choice costs. Add a ₹1Cr term plan (~₹12k/year at 30) and the family is better protected too.
'I've already paid 5 years' is not a reason to pay 15 more at 4%. Judge the policy on future returns from today, not past payments. We do this review free — no selling, just the math.
It depends on the IRR, years completed, and surrender charges. Rough guide: low IRR + early years → surrender and redirect usually wins. Near maturity → often better to continue. We calculate it free from your policy bond.
If you've paid 3+ years' premiums, you can stop paying and convert to a 'paid-up' policy: reduced sum assured continues till maturity without further premiums. A good middle path.
Typically 4–5.5% IRR — below inflation and far below PPF (~7%) or long-term mutual funds. The bundled insurance cover is also tiny compared to a term plan at the same cost.
For most people: surrender (or paid-up) + fresh term cover + redirecting premiums to investments builds far more wealth with better protection. But check surrender charges first — we do the math free.
From our YouTube channel Bima Gyan by ViRa — simple Hindi/Hinglish explainers.
Try it yourself: open the matching calculator →