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Surrender ULIP, Invest in Equity Funds

There are no surrender charges once a ULIP has completed 5 years. You will receive 100 per cent of the fund value

I started investing in a ULIP in February 2007 as a 10 year policy. The annual premium I pay is ₹60,000 and I have paid a total of ₹4.8 lakh by now. The fund value is some ₹7.13 lakh today. Would you recommend that I surrender this ULIP and invest the money elsewhere? Or would you recommend I stay invested until the term ends in February 2017?
- Arvind Venkatadri

It is advisable to surrender this ULIP and invest the amount in equity mutual funds in a systematic manner to be able to earn higher returns. Though you haven't named the plan, the returns have been quite low for an eight-year investment period at about 8.75 per cent internal rate of return.

Many equity mutual funds would have delivered much better returns in this period.

As you have completed more than five years in this ULIP, there will no surrender charges and you will receive 100 per cent of the fund value whenever you surrender the policy. You can use the fund selector tool on our website to choose the relevant mutual funds for your investment. Make sure you select a fund with a consistent track record which suits your risk profile.

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