LIC is India's pioneer insurance provider giving life insurance and is in the public sector. Now there are a many life insurance providers in the private sector also. Hence there is any number of policy products. So we can have a great choice from them.
Though life itself cannot be compensated, life insurance is a prudent and basically a financial relief provision for the surviving dependants, against unfortunate event of loss of life of the insured person who may be the head of family or earning member. However life insurance can also serve as an investment for persons. In fact now, as the longevity of people has increased, Life Insurance policies serve the dual purpose of life risk cover and investment.
But being primarily a risk provision facility, and not an income generating instrument, Life Insurance policies are having very minimal return only. The return is added as Bonus. Realistically speaking, life insurance offer just about 4 or 5% return only. Hence if one has taken a life insurance policy for a prudent and practical sum assured, then it is not suggested to invest more in life insurance policies, if the aim is return.
There are ULIPs, which are combination of investment return and life cover. Here the one point we should note is the 'amortisation' charges. This charge is deducted from the premium amount we pay. So the units purchased will be for the value net of the amortisation and other charges.
There are single premium policies, long term policies etc.
However if one is starting young, then it is better to have a Term Insurance. Here the main defect is that the amount remitted as premium has no return. But when we join as early young as possible, one can have a policy with a reasonable good sum assured with relatively low premium. Having provided a life risk cover, one can invest the spare amount in high return equity instruments.
Even when you take LIC policies, it is suggested to have policies which will give periodical benefits benefits- i.e money back policies. That can come in help of lump sum needs which come at a later stage.
So before taking a decision, one should sit and decide what the basic aim is. Is there any life cover already and is it sufficient cover. Evaluate the term insurance vis-a-vis the premium and benefit with immediate and long term tax benefit.
So a practical suggestion is to have a minimum prudent and practical cover of sum assured a life insurance. And then to invest in equity linked investments to fetch more returns.
You can compare the various policies available with various providers, keeping your aim. Then you may discuss with agents. However agents may push only the policies that give them more benefit. Hence tell them what exactly you need, read the terms and conditions clearly and then invest. Also, note that online investments can have benefits in premium.