Life Insurance: Amitabh Chaudhry

Amitabh Chaudhry, managing director and chief executive officer at HDFC Life, answers your questions

If I surrender my endowment plan before maturity, will I lose the entire accumulated bonus that have been paid until now?

In case of surrender, you will not lose the entire accumulated bonuses. You will either get 100 per cent of the accumulated bonuses or a percentage of accumulated bonuses will be payable to you as a component of surrender value. Please refer to your policy contract.

Is a single-premium policy better than the one in which I have to pay premiums every year?

The decision on whether to opt for single or annual premiums depends upon the requirement or outlook of the individual. Here are some aspects that can help you decide between lumpsum and annual investment

1. When investing in unit-linked products (ULIPS), the frequency of the investment is crucial. If your stock market outlook is positive then a single premium investment is better in the rising market. Those who want to hedge against the market volatility, systematic investment in the form of annual premiums may average out the returns in the volatile market.
    
2. Single-premium plans in the market usually have higher premium sizes than a regular premium for the same plan which may not be at affordable at the time of investment.
    
3. Single premium policies are ideal for individuals, who may not want to or are not able to commit to regular investment for long term. Regular premiums, on the other hand, are suitable for those who want to invest regularly in a disciplined manner over a long period of time.

The views expressed are expert's own. Send your queries to yourmoney@bsmail.in