As I understand under ULIP money paid as premium is invetsted in funds. What happens when we stop paying premium? does the same investment remains active till the time finally we withdraw from the scheme. In short is it advisable to stop paying premium and withdraw when market is up? Thanx
1 Answers
It all depends on your policy wordings. Most of the ULIP can be continued just by paying 3-5 years premium. After these mandatory payment years, you may stop making payments and it will still continue. Some units would be deducted every month towards mortality charges (paying up for the small insurance component).
Fund value in future would depend on market performance and type of fund investment chosen (equity/balanced/debt).
It would be better to withdraw as early as possible and invest same amount into a good equity mutual fund. It would generate better value in long term than a ULIP.
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