in 2016 aug i have taken this plan BIRLA SUN LIFE WEALTH ASSURE PLAN and the scheme is PURE EQUITY FUND – this is ULIP i think
Policy Paying term is 5yrs
Policy Term is 20yrs
Policy Amt is 70000 per Annum
** I am availing this 70k under the 80C **
Till now i have paid 3 premiums, and the Fund Value is 180000 less than the principal value, Policy Document says we have to pay minimum 5 premiums to surrender or else before 5yrs if we discontinue it goes into Discontinuous Fund and we can take only after 5 yrs from date of Policy Commencement….
Question is DO YOU ADVICE for DISCONTINUE THIS POLICY but i cant get money now only after 5yrs in my case i have to wait for 2 more years…and in the Discontinue Period it is mentioned customer will get 4% guaranteed interest approx. after the Discontinue Charges are deducted… KINDLY ADVICE ME whether to Stay for 5yrs or Discontinue. ?????
One more thing is if i Discontinue do i need to do the 80C Reversals in my Taxation for current period for the previous 3 yrs i have availed????
Yes, it is an ULIP.
May I know your original investment objective for picking this plan?
Do you invest in any other equity oriented schemes? like Mutual funds, shares?
What about your investment horizon?
If you have an ULIP and terminate (or discontinue) it before making contributions for 5 years, benefits of tax savings have to be forgone. Meaning, the aggregate (total) of tax deductions availed earlier in respect of the plan will have to be considered as the ‘income’. You need to add this to your Taxable Income.
This means the entire deduction claimed on the Ulip premium will be added to the income of the policyholder in the year in which the policy is discontinued. If policy is terminated after completion of five years, the surrender value will be tax free.
Kindly read :