ULIP: to surrender or continue without premiums

POSTED BY Mukund Sridharan ON July 19, 2011 6:07 pm ONE COMMENT



I have a SBI Life Unit Plus II ULIP policy which I took in Oct 2008 and maturing after 5 years.

I am paying an annual premimum of 30,000 and have completed 3 premimums till now.

As per my policy the lock in is for 3 years. After that I can take out 99% of the NAV

Also I am told that I need not have to pay the premimum for years 4 and 5.

I have been thinking of changing my investment and move out of ULIP and go into an investment like (MF + Term).

Now I have 2 options.

Option 1: Discontinue the premimums and finsih the 5 years and take the maturity benefit

Option 2: Surrender the ULIP and reinvest the return.

I am not sure which one of these should I follow and what are the pros and cons for both these options.

Also another thought is since most of the charges have already been loaded, should I just continue with this policy, pay the premimums and come out of it when it matures?

Would like some guidance on this.




One reply on this article “ULIP: to surrender or continue without premiums”

  1. Mukund

    The maturirty from ULIP is taxable if taken before 5 yrs, may be you are not aware of this . What I would suggest is , if you are not that confident about market timing , then shift the money in ULIP to debt portfolio (switch it from equity to debt) and stop paying premium , and take the money out from ULIP after total 5 yrs .

    For now restart from scratch and put money in MF through SIP


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