Should I surrender my ULIP before the lock-in period?

I purchased SBI eWealth ULIP in March 2015. The premium for this is Rs 2,500 per month. Should I surrender this plan or continue with it?
-Anurag

SBI eWealth is a Unit Linked Insurance Plan. We don't believe in recommending insurance-cum-investment plans as they are costly and offer a sub-optimal combination of insurance and investment.

If you surrender it before completing 5 years, the fund value will be moved to discontinued fund. This will be paid out to you after the 5-year lock-in and after deducting the applicable discontinuation charges. 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.

Though you will incur losses, we'll still advise you to surrender your policy and take back the fund value after the expiry of the lock-in period. Further, buy a good term insurance plan with an adequate insurance cover and invest the money you would have otherwise paid as future premiums on your ULIP in a couple of good diversified equity mutual funds. This combination (term insurance and equity funds) will cover your insurance and investment needs in a far better way than a ULIP could.

This article was originally published on December 16, 2016.