I bought Bajaj Allianz New Family Gain policy on March 2008 and paid total premium of ₹36000 till March 2011 after which I stopped paying premiums. The policy matures in March 2018. Now my fund value stands at ₹27443 only. Last year ₹5013 was deducted from the fund towards various charges. 1) Am I getting any coverage anymore? Policy status shows it to be in force 2) What is advisable - to exit now or continue till 2018?
- Dipankar Sinha
Bajaj Allianz - New Family Gain is a ULIP policy. In these plans, from the premium you pay, the insurer deducts charges towards life insurance (mortality charges), administration expenses and fund management charges. Only the balance amount is invested. Due to these costs, the residual investment of your ULIP may give lower returns even if the market is doing well. Even when you have stopped the premiums, there will be fixed charges applicable on the policy for full tenure and this will be utilized from your existing fund/units.
We recommend that you surrender this plan now to minimize your future losses. The surrender value should be the same as the fund value as at the time of surrender. In paid up status, the life cover continues however the sum assured reduces proportionately.
In future, avoid insurance policies with investment element in them for investment. 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.