Clients often come to us seeking help after purchasing unnecessary policies without understanding their advantages and disadvantages. In any case, first of all it’s important to understand the clear difference between Insurance and Investment as I detail in this answer - Anmol Gupta's answer to What is a major advantage of investing money in insurance over other investments like mutual funds or stock markets which give high returns?
For term life insurance, claim settlement of LIC is highest across the industry but term life insurance of LIC is also very expensive than that of other private companies. Taking a term life insurance with LIC is fine if highest claim settlement ratio at the price of more premium is fine with you.
As far as LIC’s hybrid policies (insurance + investment) are concerned, they give you the return they have promised without default. But then, the kind of returns which you get in such policies is very very low. It’s better to not ‘invest’ in such policies even if you are risk averse as there are many other better and safe options available for investments.
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Note: Originally published on Quora