Q&A: Our expert guide in matters relating to insurance

Pankaj Mathpal, CFP & MD, Optima Money Managers

No Capital Guarantee in Ulip

I bought two insurance policies though StanChart. The annual premium is Rs1 lakh each. The fund value of the first policy kept decreasing and it never touched Rs4 lakh. I stopped paying premiums. The policies are due in November 2012 and February 2013, respectively. Will I get at least Rs4 lakh and Rs3 lakh?

Kishan Sharma

Returns under Ulips are not assured and depend on the performance of underlying assets in the scheme’s portfolio. Also, there are various charges applicable which further bring down the net yield of your investment.

Since your Ulip does not offer capital guarantee, surrender your policy as soon as the lock-in period is over and reinvest the proceeds in an assured return investment scheme to recover losses.

Insurance & Investment

I am a 30-year old and earn Rs15 lakh per annum. I am supporting my younger brother, who is a student, by paying him Rs10,000 every month. I have polices like ICICI Pru Life - RGF, LIC Jeevan Saral and Future Generali - FGI Guarantee Advantage-Non Participating Universal Life.

Amit kumar Singh

You are paying Rs1,89,900 per annum towards premium of the three insurance policies. It does not make financial sense investing such high amounts in insurance policies. I appreciate your decision to buy a term insurance plan and advise you to consider HDFC Term Assurance Plan.