I have two policies which I want to surrender – LIC Endowment, ICICI Prudential ULIP. Before taking the decision, I want to have some inputs from the expert investors here.
Request you to help me.
01 Policy: Jeevan Shree (16 yrs Premium and 25 years policy)
Premium : Rs. 25476 per annum
Sum Assured: Rs. 5,00,000
Start Date: 20-Jan-2002
End of Payment: 20-Jan-2018
Maturity : 20-Jan-2027
Paid till date:Rs. 2,35,653
To be paid :Rs. 1,97,439
Total payment:Rs. 4,33,092
Today’s Surrender Value: Rs. 1,68,000
Maturity Value: Rs. 16,00,000
Will it make sense for me to surrender policy and take the money. If yes, what are my investment options.
My reason – to get better returns on 20-Jan-2027 or utilize the money today in a better way. I am willing to put all this money in some good Equity MF like Reliance Growth / HDFC Top 200 / Quantum Long Term Equity, etc.
Rs. 1,68,000 for 16 years (from today to policy maturity) @ 16% CAGR gives me Rs. 18,05,665. So, to surrender and invest in Equity MF, I should assume the CAGR to be more than 16%, only then it makes sens. Does this make sense ?
02 ICICI Pru LifeTime (the older version).
I made a payment of Rs. 20,000 for 3 years and then stopped paying. Pulled some money out of the policy and now the policy stands as:
Sum assured Rs. 1,40,000 (from original Rs. 2,00,000) and the current unit balance gives me Rs. 40,000.
Shall I take all my money out of this policy?
This policy, I am more keen and comfortable in surrendering rather than LIC (because of the complex nature of the endowment plan); taking the decision for endowment plan is more confusing.
If I have to put this money in Equity MF, how do I proceed (scared of lumpsum)?
Also, I am thinking of buying a car in near future (another 6-8 months). Shall I use all this money to fund my car 6 months later and park this money (lumpsum) in some ultra shortum MF or FD till then ?
Thanks in advance.