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ULIPs do not guarantee the security of your principle amount

If the markets are on a downside the sum assured is bound to be of a lesser value

I invest Rs 15,000 annually in Max Life Insurance since July 2005 and will have to do it for 20 years. The surrender value amounts to Rs 1,35,000. I want to terminate this policy and invest in a better instrument. I am 46 and can withstand some risk. What should I do?
-Deeptha Reddy

You have not named your policy but it appears to be a Unit Linked Insurance Plan (ULIP). It is good that you are able to recover the principal amount in surrender value.

You should surrender your policy if it's a ULIP. ULIPs mix insurance and investment and do not provide the best of either. It is best to separate the two.

Since you can tolerate some risk, you can select a five-star rated large and mid-cap fund with the fund selector tool on our website. Do not invest in a lump sum, but with an SIP.

You will lose the insurance protection once you surrender the policy. Buy an adequate pure term policy that can provide financial protection to your family in your absence. Term policies are definite buy for everyone as they provide high coverage with lesser cost.

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