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Recovering investments from annuity plans

Return your annuity plans if they are still in the free-look period, says Dhirendra Kumar

I have learnt that annuities are not a good investment. Unfortunately, I have already invested Rs 10 lakh in two annuity plans of LIC. Now, I am regretting the decision. Is there any way to recover the investment?
- Surendra Nath

Check the details like when you bought these two annuity plans and what sort of annuity plans they are. All life insurance policies provide a free-look period. If they are still in the free-look period, you can straightaway return them.

Annuity comes in two to three formats. One is a fixed-income annuity where you are told that by depositing Rs 10 lakh, you will get this much money till you are alive. In another form, the annuity that you receive every year keeps on increasing slightly to keep pace with inflation. There is another type of annuity, where you will keep getting a certain amount of money till you are alive and thereafter, your nominee will get the principal back. These type of annuities yield lower returns. I feel a simple Systematic Withdrawal Plan (SWP), along with right asset allocation, is sufficient for most investors. So, just check the papers of these annuity plans and see whether they allow any form of withdrawal. If they do, you are sorted.