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Go for Term Insurance

Redeem your ULIPs after the 5th year. Buy a term insurance policy, which is the ideal plan that you should have…

I have two life insurance policies. One is in Bajaj Allianz Invest Gain, in which I have paid four premiums in the past 4 years. The next premium under this policy is due this month. The second is in SBI Life Smart Performer, Rs 3 lakh per year for 5 years. I want to know if I should continue with these policies.
- Chandan

The policies you hold are not the ideal kind of life insurance that you should have. The best and the only kind of insurance that any person with dependants should have is a term plan. The two plans you hold are ULIPs. However, you have already paid premium during the years when the expenses are high. These are old ULIPs and after the 5th year, it is possible to take your money out of them. But before you redeem, liberally estimate how much money your dependants will need if you're not around, and buy a term plan accordingly. And finally, look at insurance as an expense, not as an investment.

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