We don’t believe that insurance is an investment tool.

No.

Purpose of insurance is to replace the economical loss in case of untimely death and nothing else.

It is not an instrument to ask for returns. Let us see how insurance not an investment tool is by comparing it with other instruments.

LIC Endowment Plan : Investment- 1 lakh. Period: 25 years.

Sum Assured: Rs 25 Lakh.

Returns: 6625000. IRR= 7%

If one had opted for term insurance 1500 Rs would have been the premium for Rs.2500000 and the rest 98500 invested @ 8.6%(PPF) the maturity value Rs.8540078.

If one had opted for term insurance 1500 Rs would have been the premium for Rs.2500000 and the rest 98500 invested @ 20%(assumed for MF) the maturity value Rs.55788164

So depletion in your investment value would be:

In case of 8.6% (PPF):1915078

In case of 20%(Mutual Fund):49163164

So we would suggest insurance only as a insurance product and not combine it with investments.