How's HDFC endowment policy? They're claiming a >30% return on the principal amount. Are there any risks involved with such a policy? Anyone invested in such policies?
No instrument in the world can assure you 30% returns annually.
If you want insurance, buy simple term life policy. If you want investment, buy stocks or MF. I would suggest to avoid fancy products which we don’t understand
It's not for term/life insurance that I'm taking this but purely as an investment option. Since it's giving assured 30% returns.
Ask them to give the assurance about the same on a Stamp Paper as a Legal Document and tell them after that You will invest.
Better, I too will invest as if I get 30% return in 1 Year, I can practically retire in 5 Years.
Sometimes you need to lose money in endowment plans to realise it's never an investment, so take the life lesson by yourself.
Guys confirmed with them. It's not 30% but 30k fixed every year lol 😹
Definitely not worth it. Thanks for all your suggestions.
Buy HDFC shares instead (DYOR)
Can you do an IRR calculation on excel/Google sheets?
Think from first principles
All the endowment plan invest in g-secs which yield around 7-8% now.
Insurance company takes a cut of 1-2%.
On all premiums you are taxed under GST
You are technical investing 82% of your premium
In the end your yield should be around 4-5.5% which is absimal not even beating the inflation
Good amount of discussion happened in this post:
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