I started investing ₹5,000 monthly in the SBI Shubh Nivesh investment plan for a term of 15 years. The first premium was paid in October 2015. But now I realise that it is not a good investment. Please advice me what steps could I take?
- Ranjit Samal
SBI Shubh Nivesh is not an investment plan. It is an endowment insurance plan or an insurance-cum-investment plan. For surrendering the policy, you need to complete two full policy years. However, it would be better to forego the premiums you have already paid and stop your future losses. It is true that you will suffer losses if you surrender the plan. Still, you should consider surrendering it. It doesn't make financial sense to continue with a bad investment product.
In future, avoid insurance policies with investment element in them for investment. Such insurance-cum-investment plans typically offer a very small insurance cover. They also offer comparatively lower returns than pure investment products. In fact, endowment policies do not even beat inflation. Even a bank fixed deposit may offer you better guaranteed returns.
It is always better to buy a pure term plan to get an adequate insurance cover to take care of your financial dependents. You can buy a very large cover with a low premium in a pure term insurance plan. You should also opt for pure investment product like an equity mutual fund schemes to achieve your long-term financial needs.
This article was originally published on April 21, 2016.
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