Going by your investment and current fund value, the scheme has generated an IRR of 7% which is lower than a bank fixed deposit
16-Oct-2015 •Research Desk
I want to seek your advise on whether to stay invested in SBI Unit Linked Pension Plan, Horizon II, Option II - Equity. I am with this scheme since 2008 and I pay a total annual premium of ₹12,000 (half-yearly). As on date, the fund value is around ₹1.25 lakh, with investment value of ₹₹90,000.
I have taken this scheme just out of the box when I was starting my career and there was very little information available on the internet. The sum insured is roughly ₹60,000 which is peanuts in the current scenario. I am covered separate under term insurance and I am not very keen to continue with the policy.
Please advise what should I do? Should I surrender or switch to any other options. I am not looking for tax saving options as I have already exceeded ₹1.5 lakh limit. Is it good for retirement option?
You are one of the few lucky ULIP investors who has made profits. You had invested during the time when markets had crashed, that is why your fund value is in green. Going by your investment and current fund value, the scheme has generated an IRR of 7% which is lower than a bank fixed deposit.
Surrender this policy. The scheme would give you fund value after deducting a surrender charge of 1% of fund value. Invest the proceeds in mutual funds via monthly SIP. Balanced funds would be a great option to start with. Once you get acquainted, you may reach out to diversified equity funds. Make sure that you are covered for an adequate sum with the term plan.