Regarding Surrender ULIP

POSTED BY phani.eejntu ON December 14, 2011 2:05 pm COMMENTS (4)

Hi, I am Phaneendra from Hyderabad. I have bought a ULIP (Product Name: New UNIT GAIN II)from BAJAJ ALLIANZ on 13 apr 2010. I am making payments quarterly(12500 each quarter). So, in total I paid rs.87500. But the current fund value of that is 51751. Somehow I sense now that this product was missold to me, infact even if I pay for 2-3 more years, hardly I can make the amount equal to what I pay. I would like to cancel this now. But since the lockin period of 3yrs is not complete yet, if I stop making payments do I get any amount after surrender. What am I going to loose because of this. Any suggestion what would be the best option at this juncture.

It would be great if you can get some suggestion for the above question.

4 replies on this article “Regarding Surrender ULIP”

  1. Dear DP, thanks for the addition. I missed the taxation part while answering the basic query.



    1. says:

      Dear DP, Thanks for your answer on this. According to policy document it says, if I surrender the policy before 3yrs payment, surrender charges are 50% of the 1st year premium. Already 50% of the premium is taken in the first year for life coverage. So, I will be loosing 50k. It is mentioned that if I pay premium for 3yrs and 30%-after 3yrs, 20%-after 4yrs,0% -after 5yrs completion.

      Can you please confirm, if I pay for full 3 yrs and wait till end of 5yrs, will the allocation of units still exposed according to changes NAV or It will be paid an intrest rate of 3-4%. I am not clear about this from the policy document. Also, will there be any life coverage, if premium payment is stopped.

  2. DP says:

    Just to add to Ashal Ji, you surrender value will be added in your income and will be taxable even if withdrawn after 3 years.

  3. Dear Phaneedra, please check your policy documents for the applicable surrender charges. In my view if you opt to stop the prem. right now, the available surrender amount ‘ll be very low (although it ‘ll be available only after 3Y i.e. in 2013). You have to make the call for continue or not at this point of time.



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