Why you shouldn’t let your existing ULIP policy lapse

Nothing satisfies your soul than investing in Unit-Linked Insurance Plan (ULIP). Well, this is simply because investing in ULIPs not only safeguards your family’s needs but also protects them during the time of an unfortunate event. The purpose of a ULIP Plan is to provide you with a life cover that fulfills all your lifetime goals.

On the other hand, lapsing of a ULIP Policy can lead to numerous issues like financial trouble, unprotected needs of your family, and so forth. This will constantly keep you worried about the safety of you and your family. If you’re still wondering about what more can happens when your policy lapses, keep reading:

Reasons why you shouldn’t let your ULIP policy lapse:

  1. No tax free benefits

Apart from offering you with a life cover, ULIPs also provide exemption from the payment of taxes. These tax benefits are offered on the premium paid by every investor. However, failure to renew your policy will lead to its lapse.

In order to keep enjoying ULIP benefits like exemption of taxes, see to it that you renew your policy on time. Renewal of policy will not only save all your time and money but also make sure that you don’t have a hassle-free experience while investing in a ULIP Plan.

  1. No longer insured

With an uncertainty of life, you can never predict what may happen next. This unpredictability of life can simply leave us worried about our family till the very end. Hence, the best you can do to avoid stressing about it is by not letting your ULIP Policy lapse.

In case your ULIP Plan has lapsed at the time of an unforeseen event, you will not get the coverage. Not being able to receive the coverage simply kills the main purpose of owning a ULIP Plan. Hence, see to it that you renew your policy before it lapses in order to enjoy the coverage benefit.

  1. No financial protection

With the help of a ULIP plan, you don’t have to be stressing about the financial stability of your family. This is because when you select the best ULIP plan for yourself, you will not only protect your family but also allow investment of your funds.

Renewing your policy before it lapses ensures you have a life cover to look after you and your family. When you invest in a ULIP Policy, you get to participate in equity markets, at the lowest cost. Having said that, your non-participation will hamper the needs of your family as everything is taken care of by ULIPs.

  1. No surplus return

Failure to renew your ULIP Policy comes with its own set of cons. No return of your surplus funds is one of the many cons of a policy lapse.

When you skip paying the premium in the first five years of the investment, your ULIP policy lapses. You also lose the insurance benefits. This eventually paves way to no return of surplus to an investor.

  1. No premium payment

When you invest in ULIPs, you have to make your timely premium payments in order to keep the policy from lapsing. This recurring savings habit ensures that you have a disciplined approach to financial planning. Once you stop that, your ULIP Policy undoubtedly lapses and you lose the systematic planning approach. Now that you know why you shouldn’t let your existing ULIP policy lapse, see to it that you renew it on timely basis. Renewal will simply act in your benefit and allow you to garner higher returns

Author: Eddy

Eddy is the editorial columnist in Business Fundas, and oversees partner relationships. He posts articles of partners on various topics related to strategy, marketing, supply chain, technology management, social media, e-business, finance, economics and operations management. The articles posted are copyrighted under a Creative Commons unported license 4.0. To contact him, please direct your emails to editor.webposts@gmail.com.