The first rule of investment in the equity market is to spend time in market and not time the market.
By Ashish Kumar Srivastava
Can I get my money back if I surrender the policy after one year? – Santano Kumar
Regular premium paying policies acquire surrender value after payment of three premiums. The new products which are being launched, will allow policies to acquire surrender value after payment of two premiums. However, if you stop paying your premiums after one payment, your policy will lapse and benefits will cease. I would recommend you to consult a financial advisor and carefully select your insurance portfolio to avoid situations requiring you to surrender policies before the policy term.
I had bought an unit-linked insurance plan (Ulip) six years ago. As the equity markets have become very volatile, should I exit from the plan now? — K C Rajagopal
The first rule of investment in the equity market is to spend time in market and not time the market. Creating a robust plan and sticking to it in a disciplined manner under all circumstances is key to building long term financial assets. Ulip is a combination of life insurance as well as investments in various equity and debt funds. The value of falling market is captured through reduced NAV and in such circumstances, continued payment of premium benefits you through rupee cost averaging. In fact, Ulips are long term contracts where it is advisable to stay for the entire term of the policy so that you don’t lose out on fund growth, which is inherent in long term policies.
What would be the cost structure of Ulips and is it good to invest in such a fund as I am a 50-year old teacher? — Pramod Rastogi
Ulips being market-linked product, aggregates the very best of insurance and investment in a most tax efficient manner. ULIPs offer flexibility to invest in equity or debt funds as per your risk appetite and also unlimited switches to actively manage the investment portfolio. There are plans which offer zero or minimal policy admin-istration and premium allocation charges, however, mortality charges deducted in a unit linked plan increase with age.
How can I take a life insurance policy for my son who is working in the US? — Deepak Singh
You can take a life insurance policy for your son who is working abroad. However, the insured has to visit India, at the time of taking the policy for signing formalities and medical tests, and the policy should be sourced during that visit.
(The writer is MD & CEO, PNB MetLife. Send your queries to email@example.com)