The lack of disclosures on charges makes HDFC Life Classic Assurance Plan a bad policy
14-Oct-2014 •Research Desk
I hold the HDFC Life Classic Assurance Plan which I bought in 2011. I have already paid three insurance premiums of ₹30,465 each. But I do not wish to continue the policy due to its bad returns. I know that I had made a bad decision while buying this policy. Please advise on whether it is okay to discontinue?
- Anuj Mathur
HDFC Life Classic Assurance is a savings cum investment plan which declares reversionary bonus at end of financial year and a Terminal bonus on maturity. Such plans are silent on the applicable charges. These bonuses would depend on the investment returns, and charges under the policy. Lack of disclosure makes such policies a bad choice. We suggest that you discontinue and surrender this plan. You will surely make losses while surrendering but it would not be wise to continue putting your hard earned money into a bad product. As you have completed three years with the policy, you can surrender this plan and receive a minimum guaranteed value of 50% of basic premiums paid less first year's premium. The insurer may at their discretion pay you a higher value than the minimum guaranteed surrender value. Before you surrender, make sure you purchase an adequate term insurance policy and invest in mutual funds towards your goals. In future, do not mix insurance and investment.