Before investing in an insurance plan of any kind, it is important to ensure that it aligns with your long-term goals and objectives. This is perhaps more true in the case of Unit-Linked Insurance Plans than most others. With the combined ULIP benefits of both investment and insurance, they are specifically suited for fulfilling the long-term goals of a variety of investors.
However, due to certain reasons, a ULIP investor might consider surrendering his policy well before its maturity date. To achieve this, a ULIP investor needs to be aware of how to cancel his ULIP policy. However, it is far more important to be aware of whether surrendering a ULIP policy is an advisable move at all. Let us delve into the topic in more detail:
What Is ULIP?
Let us start by reviewing what is ULIP and the various benefits it can offer to an investor. ULIPs are primarily designed to provide protection along with market linked returns. When you make an investment into a ULIP, It offers the policyholder dual benefit of investing in either in equity funds or debt funds or both while providing life insurance coverage. A professional fund manager handles the investment corpus and every ULIP investor is provided with a variety of fund options to choose from, ranging from debt and equity funds.
As an investor in a ULIP, you can choose a fund option that aligns with your long-term financial goal. For instance, the relatively safer debt funds might be ideal for those investing for their retirement. On the other hand, equity funds might be ideal for those that seek wealth creation. You also get the option to switch your investments between different ULIP funds based on your risk appetite and market conditions during the tenure of the policy.