Hi Sreekanth,
Hope you are doing well!!!
For my son's education I need a lump sum of 5,000,000/- in mid of 2025. I have the following:
- I started HDFC Life Young Star policy in 2013 with annual premium of 100000/- for 15 years. Should I drop this policy, because time is not matching and I am slight skeptical about its return and invest the same in mutual fund SIP?
- I have some 10L in hand to invest in lump sum for 8 years so that I can get the good return by mid of 2025. Can you recommend two mutual fund that can give me realistic return over 8 years with minimum risk?
1 Answers
Hi,
HDFC Life Young Star is an ULIP. You may discontinue it and divert the premium amount to equity oriented mutual fund schemes.
But you need to watch out for two things, if you discontinue an ULIP before 5 years ;
- 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.
- Your accumulated fund amount in the policy will be transferred to 'Discontinued fund' and will be given to you only after the 5th policy year, they may pay you nominal interest from the date of discontinuation till 5th year end (after adjusting for any expenses).
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