Publication details: Money Manager Show โ CNBC Bajar – 18-08-2015
Responses, opinion and view from Kartik Jhaveri.
Question sent by Chintan Purabia :-
Dear Sir, I have the following two LIC policies:
- Bima Gold: sum assured – Rs. 8 lakhs ; term – 20 years ; yearly premium – Rs. 28,747.
- Jeevan Saathi: sum assured – Rs. 2 lakhs ; term – 16 years ; yearly premium – Rs. 13,881.
I want to either surrender these policies or make them paid up. So I request you to advice me on which option is better.
I also wanted to know what is the difference between surrendering a policy and making it paid up?
Advice given:
- Surrender is complete closure of policy and taking most of your money back. Generally do not expect investment returns and there will be penalties for withdrawal as well.
- Paid up is alteration to contract. You do not pay any more premiums and what you have paid is kept as it is – what you have earned as bonus is frozen and money given to you at end of policy term.
- Which one is better depends on how long the policy has run and the alternate investment option you are willing to consider.
