Should I exit BSLI Dream Endowment Plan?

I started investing in BSLI dream endowment plan since 2010 and have invested ₹3,95,000 until now. Its current value is ₹4,10,000. Is it wise to continue or should I exit?
-Rajesh Manoharan

We recommend that you surrender this plan and instead buy a low-cost term insurance plan with an adequate cover, in case you have financial dependents.
Unit linked life insurance plans (ULIPs), such as BSLI Dream Endowment Plan, combine insurance and investment but end up providing sub-optimal solution for either. You get an insurance cover which can be grossly inadequate for your dependents. Besides, hefty charges deducted from your premium set your investment corpus right back at the start.
With an average annual return of less than 1%, your policy has performed rather poorly so far. You could have fetched far better returns even from a savings bank account. Since you have completed five years, there shouldn't be any surrender charges. Your surrender value will also be tax-free.

This article was originally published on February 24, 2017.