Dissatisfied with your insurance policy? Here's when to quit

Last Updated: Dec 28, 2015 | 166 Views
I am 33 years old and my family consists of my wife age 32 years and one son age 6 years. Couple of years back I purchased a ULIP which has a cover up to the age of 100. I have an account with Axis Bank and my relationship manager sold this to me. The annual premium is Rs.75,000 every year and I do not see any good returns in this plan. Can you please explain the plan benefits? Their charges are also very high so it looks like I will be incurring these charges for the entire 70 odd years. I have paid two premiums and now I am worried if should I continue this policy or not? If I keep on paying the premiums without getting good returns and they offer cover up to the age of 100 yrs – will it be enough to take care of my dependents in case of my death? I asked my relationship manager as to what should I do – he is now telling me that it is my choice whether to continue or exit  and there is not much he can suggest. 

This plan is discontinued now. Do not exit this plan now but after 2-3 years the surrender charges will be less. You can check the fund value at that time and then decide to exit. Currently - the fund value in ULIPs will be lesser than the total of premiums paid because of the charges in the policy. But over a period of 7 to 8 years, you will see the investment giving good returns. Continue this policy for a few years and exit when you feel that the time is right.
However, MetLife Smart Plus is a regular premium Unit-linked Life Insurance policy that provides life cover protection up to age 100. It offers further customisation through riders - Accidental Death Benefit and Critical Illness. 70 years is a very long period to commit to any investment product – especially an equity-linked product which does not provide any capital guarantee. 

Death Benefit

Met Smart Plus offers Death Benefit option to choose from:
If age at death is less than 7 years - 100% of the Fund Value in the Unit Account
If age at death is equal to or more than 7 years
  • Higher of Sum Assured* and 100% of the Fund Value in the Unit Account.
  • Sum Assured used for computing the Death Benefit will be reduced by the amount of the aggregate (partial) withdrawals made during the preceding two years from the date of death.
Maturity Fund
Met Smart Plus provides 100% of the Fund Value on survival to maturity.

 One of my colleagues is an agent of HDFC Life Insurance Company. He has suggested one plan for my needs – HDFC Life ClassicAssure Plus Insurance Plan. Please tell me if this a good plan or not. Also should I buy it?
HDFC Life ClassicAssure Plus is an investment cum insurance plan that offers guaranteed benefit. It provides protection to your family by way of lump sum payment in case of unfortunate demise during the policy term
Some of the features are:
  • Limited premium payment terms of 7 and 10 years
  • Insurance coverage throughout the policy term
  • Guaranteed reversionary bonus during the premium paying term
  • Option to go for a Short Medical Questionnaire eliminating tedious medical tests
  • The plan can be taken only on a single life basis
 Manoj Aswani
(The author is the Vice President of MyInsuranceClub.com – IRDAI approved insurance web aggregator. Readers may write to him at manoj@myinsuranceclub.com)