Taking a term plan for your insurance needs and starting a mutual fund SIP for investment is a good decision
23-Mar-2015 •Research Desk
I have been investing in the Saral Anand Plan of Future Generali from 16/05/2011. I paid premiums for 3 years but do not want to continue. How much will be the paid up value of the policy I will get at end of 5th year? The term is 15 yrs and premium is ₹7350 annually. Should I opt for surrender or wait for lapse of policy? I think investing in mutual funds through SIP will be better, and taking a term plan instead is the best option. Please guide me.
Yes, as you say, taking a term plan for your insurance needs and starting a mutual fund SIP for investment is a good decision. It is unwise to mix insurance with investment. Insurance products lack liquidity and transparency which should be an important part of the investment option. The costs are usually higher in investment products offered by insurance companies as compared to mutual funds.
You can surrender this savings policy from Future Generali. The surrender value has two components- Guaranteed Surrender Value and Special Surrender Value. The Guaranteed Surrender Value will be 30 per cent of the premiums paid, excluding the first year premium. The company will also pay a Special Surrender Value which will be either equal to or more than the Guaranteed Surrender Value. This value will depend on the duration for which premiums have been paid and the policy duration at the date of surrender. In some circumstances, in case of early termination of the policy, the surrender value payable may be less than the total premium paid.
And you can refer to the fund analyst choice on our website to choose a mutual fund suitable to your risk profile.