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I have already paid three installments of ICICI Pru Pinnacle Super-LP plan and the next installment is due next month. Is it advisable to continue this plan as I bought it based on wrong advice from an agent who simply did not pick up the phone after the "free look" period of policy ended? What are the consequences (loss) of closing the said policy now? What needs to be done to close this policy pre-maturity?
- Deepesh Agarwal
The high expenses charged by the plan make it unattractive. ICICI Pru Pinnacle Super is a unit linked policy which charges about 8 percent in costs, for the first policy year. The charges reduce a bit over the years but that is not a good reason to go with it, as higher charges during the initial years will influence returns from it.
If you surrender your policy at anytime before completion of five years, you will have to incur a surrender charge. The table of surrender charges is as below:
| Premium Discontinuance Charge | |||
| Year of Premium Discontinuance | AP < ₹25,000 | AP > ₹25,000 | |
| 2 | 15% of lower of (AP or FV), subject to a max. of ₹2000 | 4% of lower of (AP or FV), subject to a max of ₹5000 | |
| 3 | 10% of lower of (AP or FV), subject to a max. of ₹1500 | 3% of lower of (AP or FV), subject to a max of ₹4000 | |
| 4 | 5% of lower of (AP or FV), subject to a max. of ₹1000 | 2% of lower of (AP or FV), subject to a max of ₹2000 | |
| 5 | Nil | Nil | |
| AP is Annual Premium; FV is Fund Value | |||
Continuing with a sub-optimal investment is not a good idea. To surrender, you need to visit the insurance company in person along with original policy bond, identity proof, address proof and cancelled cheque of the bank where you wish to receive your funds. Fill in the surrender form and submit it along with documents.
This article was originally published on December 03, 2014.
Disclaimer: This content is for information only and should not be considered investment advice or a recommendation.
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