Advice reagrding discountinuing ULIP

POSTED BY Sunny ON September 29, 2010 10:44 am COMMENTS (4)

I have 2 ULIP policies from LIC of India. Both are active.

1. Policy :Money Plus 180
    Date : 2007
    Policy Term : 20 (Premium term : 20)

Have paid 4 yearly premium.

2. Policy  :  Profit Plus 188
    Date : 2008
    Policy Term : 20 (Premium term : 5)

Have paid 3 year premium.

I would like to know can I surrender these(or any one) policies? If yes How much will be the surrender charges?

In case I don’t want to pay any surrender charges, How long I have to hold these policies?

And can I paid up these? If yes, what are the drawbacks?

 

Actually I am confused about the “premiunm term” , what does that mean?

 

And whats your general opinion about this situation of mine? what shd be done?

 

And No, I was not mislead into buying these. 😐

4 replies on this article “Advice reagrding discountinuing ULIP”

  1. bharat shah says:

    good and clear!

  2. Premium term is maximum term but its not mandatory to pay for full term.

    Paid up will not make much sense in ULIP as still there will be policy admin charges & service tax which are approximately Rs 350-400 every year. These charges are over & above fund management charges.

  3. Sunny says:

    Hi Hemant ,

    Thanks. That was quick.

    Just to re-confirm things.
    Premium term doesn’t mean that I should mandatory pay those many number of premiums?

    And if suppose I just want to freeze my investment. I don’t wanna withdraw. There wont be any units/money lost, right? And I can withdraw whenever I want.

  4. Premium term means Premium Paying Term so in first case it is 20 years & in second case it is 5 years.

    My suggestion is you should not pay any further premium in both the policies as policy charges are too high.

    LIC allow you to surrender any ULIP policy without any charges after completion of 3 years.

    If you have paid the premium for more than 3 years: Whether you should withdraw or hold that investment is based on Alternative Opportunity you have at that point in time. If you find that you will be better off investing in Mutual Fund directly instead of remaining Invested in ULIP, then its better to withdraw the same and make Mutual fund investment. Now this statement applies to all your investment.

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