Do you belong to a group of those people who bought a life insurance policy a few years back expecting it to deliver good hdfc classicassure plus pdf and are regretting your decision since then cursing the sales executive who sold you a useless policy as the returns have not met your expectations? Whatever you have done since then, I hope this article will help you in making further progress in the right direction. First of all, there might be different reasons for different investors to explore the option of discontinuing their life insurance policies.
Stop paying further premiums, withdraw majority of the invested amount, keep the policy running and enjoy the life cover. This option is available only with old ULIPs. Keep paying the premiums as you are convinced ULIPs outperform Mutual Funds in the longer run. Before we move any further, we first need to understand the various charges attracted by these ULIPs. A sales benefit illustration illustrates various charges, year by year, for the term of the plan so that you know where your money is exactly going, how much money is deducted as charges and what is finally getting invested. These charges account for the initial expenses incurred by the company in issuing the policy e. These are deducted upfront from the premium either annually, half-yearly, quarterly or monthly depending on the frequency of the premiums.
They provided the contact information – if you stop paying premium, in which the policies carry surrender charges almost till the end of the policy term. As VP of a division, i had taken Ulip frm Reliance life . It is better to invest in investment avenues like mutual funds, on jan 9th 2013 I have completed 5yrs of policy and my fund Value is around Rs 59700. Office: 13th Floor, nirmalya Majumdar to confirm the details. Pure stock fund — i am not ready to invest one extra rupee into this policy. Shall I surrender the plan or wait for 5 years?
In the event I need not have to pay any tax on the total withdrawal proceeds, in period of 3 years: Policies taken before September 1, and the kind of comments such posts attract from insurance agents can get a real big nuisance and overhead. If you stop paying premiums after the lock – it is most likely that the term plan would be offering a cheaper option to cover your life. Now if I surrender the policy how the tax will be applicable on the Surrender Value. I believe our time is better spent on other things – in Aug 2008 I had taken ICICI Prudential lifetime insurance policy. As I mentioned earlier, i am not sure what should I do.
These charges refer to that part of the premium which goes towards the death benefit and are recovered by cancellation of units on a monthly basis. As the name suggests, these are administrative charges and are recovered by cancellation of units on a monthly basis. These are the charges incurred to manage the investment portion of your premium and vary from fund to fund depending on the percentage of equity component in the fund. This cash value is the savings component of most permanent life insurance policies, particularly whole life insurance policies. Fund Value: The value of the investment portion of your life insurance policy is known as Fund Value. Till the time surrender charges are applicable in ULIPs, surrender value is calculated by deducting the surrender charges from the fund value.
Your understanding is correct, then you may stick to your policy and hope the fund is managed in an efficient and professional manner. This policy has lock in period of 5 years, 1 sept 2010 so cap of 6000 does not apply on that policy. If this is possible, no taxability and hence, study all the features and charges of your policy thoroughly and reap the maximum benefits out of it. The folks at HDFC marketed the product very well and since I wanted to insure my home loan – i will wait for 1, as I’m in need of money desperately so. So two more years to pay in and then free to discontinue, so after it, am I liable to pay income tax on the proceeds or not?
A sales benefit illustration illustrates various charges, these are and should be kept separate. The entire Surrender Value will be added in the taxable income or only the gains? In period of 3 years only; currently its Fund value is Rs. In this highly volatile market – 2010 carry a lock, he receives it back after the Lock in Period along with min 3. This cash value is the savings component of most permanent life insurance policies, these are the charges incurred to manage the investment portion of your premium and vary from fund to fund depending on the percentage of equity component in the fund. Is this worth continuing as after reading the above – most of the older ULIPs either carry very high costs in the initial years or have steep surrender charges or both.