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POSTED BY ON November 29, 2012 9:15 pm COMMENTS (2)
I had opted for ICICI Life stage pension ULIP three years back. It was a spur of the moment decision as the bank guy said I’d be getting back 14/unit assured NAV for the initial 10/unit NAV.
I paid three premiums, 50,000 annually, a total of 1,50,000. Presently the fund value is 1,59,000. I’m disgusted and want out of this.I checked with the bank and was told surrendering tomorrow would get me almost 1,47,000 (92 % of fund value after three years) excluding the surrender charges.
What is my best option? Should I use their Cover continuance option which means the policy will remain in force without any premiums and charges would be deducted out of the fund value.But wouldn’t that be foolish cosnidering the fund made only a 9,000 benefit in three years?
If I keep paying the premiums till maturity (:annoyed: 2034) would there be any assured returns? Is that advisable?
Is there any better option or should I just go and surrender the policy tomorrow taking about 1,30,000 (92%-surrender charges) for the 1,50,000 I invested? 🙁
Please help guys, thanks
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Before you close your ULIP, you should consider the following:
ULIPs are long term investments. Since you invested in a ULIP 3 years ago, there were front loading charges at that time (Which the IRDA has abolished now). So the return of 9K that you have earned right now, is actually (Returns – Annual Management Charges – Front Loading charges – Other Fees). These charges and fees normally comedown after the initial 3 years and you see a spike in your returns. Please confirm the same from your insurance provider.
So my recommendation is, since you have already invested in a ULIP keep paying premiums for at least another couple of years and look at the returns.
For your information, these insurance companies earn profits from customers like you (Who get angry after looking at the first 3 year returns and close their policy, in which case these companies earn their charges but don’t have to pay the returns).
Also for any future investments, please keep your insurance and investments separate. If you want to buy a life insurance, get a term insurance; It’s much cheaper. Also if you want to earn returns from the market, invest in mutual funds through SIPs or lump sum buys.
Hope the above helps.
there are two views here
1. As you are totally disgusted, you can just end the relationship with ulip and move on
2. As the markets have not shown much action for so many years, now its the time equity can perform , hence better stay in it for some time now , however you can just surrender the ULIP and use the proceeds in a mutual fund too ! . thats also one way !