I am from India. I have a ULIP (Unit Linked Insurance Plan) worth Rs 75000 per year which I started in June 2018. The plan is for 10 years and I have already paid for 1 year. I bought this to get a locker in one of the plans. I am confused about what should I do with it.

  1. Should I continue with the plan for 5 years and then discontinue? Wait for more years and then redeem the investment?
  2. If possible, reduce the premium per year amount?
  3. Discontinue the plan and invest in other mutual funds? (Will the bank ask me to surrender the locker?)

I am willing to redeem the amount invested at least 10 years from now.

What are the pros & cons for the above scenarios? I am open to other options as well.

1 Answer 1


Given the details this is opinion based.

Generally ULIP has 5% commission for initial years. The fund management charges are very high.

If there is no lock-in or penalty, close and invest in any diversified ETF. It would give better returns than ULIP.

As per regulations and directives from RBI, Banks can't bundle products. Hence it is unlikely you have to surrender the locker.

  • Can you please clarify? 5% commission seems criminally high, so I must be misunderstanding. :) Jan 30, 2019 at 14:51
  • 2
    @ChrisInEdmonton Yes it is high. Hence missold. This is after regulations clamping it down. It was around 25%, 15%, 10% for first 3 years, then down to 5 for remaining 5 or 7 year ago. It is now around 5 for 3-5 years and then zero. Plus variety of other fees.
    – Dheer
    Jan 30, 2019 at 16:29

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