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Redeeming ULIPs

Don’t mix investments with insurance. Follow these guidelines to redeem your older ULIPs…

I have two ULIP plans of ICICI Prudential. I have paid the premium for 3 years. In the first plan, I am being told that I will have to pay redemption charges of 2 per cent. In the second plan, I have to invest for 5 years and will get the first premium back after 10 years because it has been converted into an FD. What should I do now?
-Birbal

In general, our advice regarding older ULIPs is that you should pay the premium for 3 years so that your money is not forfeited. You shouldn't redeem your investments between the 3rd and 5th year, even if you don't pay any further premium, because the surrender charges are high during this period. After 5 years, you should redeem your investments and remember to not mix investments with insurance in the future. Buy term insurance you fulfill your insurance needs, and choose an investment vehicle that matches your risk profile.



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