Home»Personal Finance»Personal Finance Query: Should I Surrender My 5-Year-Old ULIP?

Paid premiums for 5 years? Don't surrender your ULIP now!

Manikaran Singhal  
Q. I am 25-years-old and not married yet. I had bought a Unit Linked Insurance Plan (ULIP) in January 2008 which requires me to pay an annual premium of Rs 15,000. The plan offers me a life insurance cover of Rs 3 lakh. I have already made the premium payments for the minimum period of 3 years. 
 
Can you tell me whether I should continue with this ULIP? If yes, then should I continue to pay regular premiums or stop doing that?
 
--Govind, Bhopal
 
Expert says: The decision to stop investing in an investment product is dependent on several factors apart from the performance of the product. If you aren't married yet-- and I am also assuming you have no one dependent on you financially yet-- then you do not need life insurance at present. You should have kept this factor in mind before parking your money in the ULIP.
 
Now that your ULIP has completed its initial five years, I will suggest you to not end it. But do ensure first whether you have adequate health insurance and personal accident cover, and that this coverage is not getting negatively affected by your ULIP investment. 
 
In general, any investment decision should be preceded by an accurate assessment of your long-term goals and liabilities.
 
(The personal finance advice here has been provided by Manikaran Singhal, Certified Financial Planner, Marvel Investments, Chandigarh.)
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