My wife has taken kotak life insurance (headstart) and paid premium from 14.01.2008 to 31.12.201 (three years continuously without a break. now last premium to paid in 14.01.2011. but the fund value is only rs.80,446/- (total premium paid till 31.12.2010 is rs.75,000/- (rs.25,000 x 3 years). is it worth to keep this policy alive or can she surrender it? as far as the fund value concerned is very low than what premiums paid. kindly advise somebody whether surrender or keep till fund value rise? is there any hope for increase in fund value/
Insurance Products has many charges which affects the returns. Allocation charges are highest in 1st year and 2nd year onwards it comes down. If you have not understood the product before buying than you must consult agent from whom you have bought this. You must also check what is the risk cover in this policy, as you have bought an insurance product. Than try to see the fund in which you have invested and compare the fund returns with mutual fund returns. If it is neither insurance product nor investment product than better to quit, but check there are no surrender charges in the plan.
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As far as I know the policy has a maturity perod of 10 years.So if you do not need the money now you may continue the policy till maturity (10 years from the date of purchase) but you may stop paying further premiums now as I don't think it will give any good returns.