Ask Value Research

Should I surrender Life Maker Premium?

You have not completed five years, you will be taxed heavily if you surrender now

I have invested in Max Life - Life Maker Premium ULIP in 2008.
The plan is as follows.
Annual investment: ₹25,000
Life coverage: ₹6 lakh
Total investment: ₹1.6 lakh
Current value: ₹2.03 lakh

I don't find any merit in continuing with a plan that has low insurance and offers lower returns. Please advise.
- Mudit

You are right. You are not getting enough life coverage or sound returns. It seems, you have not completed five policy years. You will be taxed heavily if you surrender now. For details on taxation, click: Taxation on insurance products.

However, it is better to surrender your policy and minimize your losses.

Buy a term insurance cover for an adequate sum before surrendering. Term plans are the best option to buy life insurance.

This article was originally published on October 19, 2015.

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