I have invested in SBI Life Insurance’s Unit Plus II policy in the name of my wife. I think this is a child plan that has a premium to be paid every 3 months. Should I redeem my money in it after 5 years or continue for 17 years? I had invested in this policy for my child’s education.
-Rameshwar
If this is an older ULIP, then you should keep paying the premium for the first 3 years to avoid forfeiture of your invested money. After 3 years, you can stop paying further premium, but you shouldn’t redeem your money before 5 years. The surrender charges in older ULIPs are pretty high on redemptions made between 3 to 5 years. You can take your money out after 5 years. In future, you should consider buying a term plan to get insurance to protect your family. Look at the term insurance as an expense; don’t expect any return from it. For investments, choose well-performing equity funds.
This article was originally published on June 08, 2012.
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