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A ULIP Concern

Insubstantial gains and extended lock-in period is troublesome for investors

I have invested in an ICICI Prudential ULIP where the lock-in period is 36 months. The returns are not so substantial. Should I exit after 36 months?

Unit-linked insurance plans (ULIPs) are relatively expensive and one cannot get out of it before 3 years. Even after you get out of it after that, there are terms in which you cannot get the entire amount that is due back. To top it all, your insurance cover would also be closed.

Therefore, after completing three years, you should give it a serious thought whether you want to continue with such an expensive investment. Moreover, in the coming days, insurance and even ULIPs would become cheaper. It is very essential for investors to understand that for investment purposes, you should invest in mutual funds and for insurance, one should go for a term plan. 

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