I have two Ulips, for which I have been paying premiums for 6 years. I want to withdraw from these and invest in mutual funds as the latter offers more choice. Is this a good move?
—Vineetha Jacob
You have been invested in Ulips and have already paid the minimum premiums applicable for 5 years. While it is good to go through the policy document, you have prima facie paid all the upfront charges applicable for the initial premium payment years and now with the said term being over, you need to evaluate the policy from the performance perspective net of charges as well as factor in the guaranteed accruals as well as loyalty additions, if any, which are typically added in the latter part of the policy years. Compare the Ulip performance with similar mutual funds, i.e. if you have equity holdings in the Ulips, then compare them with mutual funds investing in equities. Mutual funds’ performance is net of charges and hence it would be easy for you to compare and decide.
