I have terminated two of the four ULIP policies that I had and have started investing in mutual funds. I want to take a term assurance policy, but I came to know that there is no cover for the first three years in these policies. Is this true?
- Viren Saldhana
It is a good move to separate insurance and investment and you have set on the right path by doing so. However, it is not true that there is no cover in term assurance policies for the first three years. This type of policy is designed with only death benefits and no investments. Simply put, should anything happen to you, your nominee would receive the sum assured. And, if you outlive the term, you get nothing, a reason for which these policies are less expensive on the premiums.