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Surrender of ULIP before the lock in period

Surrender Value will be paid out to you after the 5 year lock-in and after deducting surrender charges

I am paying premium of ₹50,000 per annum since 3 years for one ULIP policy of HDFC SL Crest-Highest NAV Guarantee Fund. Now, the premium is due for 4th year. Should I continue or discontinue this policy?
- Mahendra

HDFC SL Crest is a Unit Linked Insurance Plan. We don't advise buying insurance-cum-investment plans for the investment needs. Not only are their costs high, you would only able to secure a modest insurance cover through them. The returns would be lower than pure investment products because of the insurance element in them.

Since you haven't completed 5 years in this scheme, even if you surrender the plan now you will not be able to withdraw the money. The fund value will move to a discontinued fund. This will be paid out to you after the 5 year lock-in and after deducting surrender charges applicable on this plan. The fund value will depend on the NAV of the fund as on the date of surrender. To get the exact amount of surrender value you can contact the insurer.

We suggest you surrender this policy after the fifth year and invest this amount and the future premiums in an investment which gives better returns. We always recommend pure term insurance plans to buy an adequate life insurance. You can choose equity or balanced funds for long-term goals of five years and above. Equity has the potential to offer better returns than other assets over a long period.

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