Once you realise Ulips are not what you imagined, the urge to exit goes up and that is when you need to know where you stand for a hassle free exit.
Among the many forms of life insurance, the unit-linked insurance plans (Ulips) are most widely discussed for their merits and complex construct. Like every other financial product, if you understand what a Ulip does and take it, you will not be complaining. However, if you have taken it up because an agent sold it to you or you thought it was a wonderful investment instrument, chances are you will be wondering what to do with this lemon.
The year-end sales of Ulips go up mostly due to the last minute tax planning that people get into. Whatever the reason, it is also possible that you may feel the need to weed out Ulips from your portfolio while reviewing it. Before you take that call, you must weigh several options to make sure that you do not end up further compounding the mistake of buying an unsuitable Ulip.
Take the case of 35-year-old Dipan Gajjar from Mumbai; he bought a Ulip, entailing a premium of ₹33,000 in 2010 primarily to claim deductions under section 80C. “I had purchased it for tax-saving purposes, but the returns were poor. I was not happy with the Ulip,” he laments. It is not that only those without a finance background get it wrong; several people well-versed with finance could also get it wrong. Financial services professional Praful Ghildiyal, 28, faced a similar predicament in 2014 when he realised that his Ulip did not meet his requirements.
Esta historia es de la edición January 2017 de Outlook Money.
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