ULIP Investments

I had invested in a ULIP, but I haven’t been able to pay its premium for the past 11 months. The policy has completed 3 years. Can I still pay the premium or will I face some losses from it now?
-Krishna Gopal

It is compulsory to pay the premium for 3 years in the older ULIPs, otherwise your invested money gets forfeited. Between 3 to 5 years, your policy stays in force even if you don’t pay the premium, which is then deducted from your existing amount. You should try and not redeem your investments between 3 to 5 years because the surrender charges within this period could be as high as 25-30 per cent of the invested amount. You should look at the policy document carefully to see if you’ve paid the premium for the 1st 3 years or not.

This article was originally published on April 05, 2012.