I bought LIC's Wealth Plus plan in 2010. I feel that only company earned from this plan, not us. What to do?
- Shrayesh Chauhan
LIC's Wealth Plus is a ULIP. In these type of plans, from the premium you pay, the insurer deducts charges towards life insurance (mortality charges), administration expenses and fund management charges. So only the balance amount is invested. Due to these costs, your investment in a ULIP may give lower returns even if the market is doing well. These type of policies are sold hard due to the attractive commissions for the agent.
We recommend that you surrender this plan now to minimize your future costs. There is a 5-year lock in period in this policy which you have completed. Hence the surrender value will be the fund value at the time of surrender. The surrender after the lock in period will not attract any penalty or taxation.
In future, do not mix your insurance and investment. Always buy a pure term life insurance to set up an adequate life insurance cover. Term insurance products are ideal for insurance cover because they have low premiums.
This article was originally published on January 06, 2017.
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