surrender of ulip

POSTED BY dilip ON April 19, 2011 8:31 pm COMMENTS (3)


I have SBI Life UNIT Plus ii pension plan,which started in sep 2008 and IDBI wealthsurance ULIP.


I would like to surrender it after 3years of completion.

Recently IRDA has issued new rules(i.e restricting surrender chrages) regarding surrender of ulips.

does these new rules applicapable to my policy also?

IDBI has huge surrender charges and only after completion of my tenure i will get the max amount.


is it worth to continue with the policy?


3 replies on this article “surrender of ulip”

  1. If you’re not aggressive in investments at age 30, do you think you’ll take risk @age 60?

    This is the right time to manage your equity portfolio in more aggressive manner and take defensive mode near retirement age. Forget balanced & debt funds now.

    Also, I’m sure you’ve not understood the funds properly, where you’ve invested your money like NAV guarantee fund because after understanding you’ll NEVER invest in that fund.

    Guarantee fund does not give guarantee on your investments; it’s only on NAV. So, consider the charges also. It’s more like 80% debt and 20% equity. That’s how, the fund manager secures your money. After all, the risk of equity is same for everyone.

    Your ideal funds should be:
    In SBI – equity fund and Growth fund – 50% each
    and in IDBI – Equity Growth fund and asset allocator fund – 50% each.

    Last but not the least, always do top-up as per your budget an target amount whenever you see blood bath in equity market. Review your funds performance regularly and take necessary steps.

    Hope it will help you.

  2. The new low surrender charges are applicable to new policies i.e. policies bought after Sep 2010. The charges in your policy will remain same as mentioned in your policy bond.

    If you surrender SBI pension plan, the whole amount will be added to your taxable income. You can continue with this plan and save regularly for your sunset years. The lock-in of pension plans will “restrict” you not to withdraw the money.

    IDBI foundation plan is also a good plan. You can continue with that. Ofcourse, you’ve already paid the initially charges. Now, it’s time to watch your fund grow. Consider, it’s asset allocation fund and equity fund – both are giving good returns. Divide your portfolio in these 2. This plan also offers you partial withdrawal facility also after 3 years in case of emergency.

    Also, learn the benefits of top-up and switching funds in ULIP. If you learn that, you’ll love ULIP.

    Hope it will help you.

    1. dilip says:

      Thank you.
      My pension plan portfolio is like this: Equity-30% Balanced-30% Bond-10% Growth-30%

      In IDBI,50% is allocated to Nav guarantee and 50% in Equity

      My age is 30.Is this allocation is ok?

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.