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First of all: Wishing you and your family a financially prosperous 2011.
And what better a way to start 2011 than knowing how to get rid of your Unit Linked Life Insurance Policy (ULIP). I recently closed one, on D’s behalf, and luckily for us we emerged above water on that one.
It all started over three years ago (even before I met D) when an insurance agent sold LIC’s Money Plus ULIP as a tax-saving tool. The premium was Rs 30,000 per year for 20 years for a basic life insurance cover of Rs 300,000 with an additional accident cover of Rs 300,000! Since two premiums had already been paid and the policy was way under water, I advised her that there was no choice but to pay the third premium and wait for the third-year to get over before we could surrender the policy and hope to get something back.
Once the third-year was up (in June, 2010) and the policy became surrender-able, we tracked it’s surrender value (= NAV x Number of Units Allotted) quite frequently. Our Rs 90,000 invested was even down to Rs 70,000 at one point. Luckily, our capital markets went up and we managed to surrender the policy at a small profit.
Thought I’d share the procedure on how to surrender and close your LIC ULIP. Here’s what you need to do.
Procedure to surrender and close your LIC ULIP.
Get the documents listed below into one file:
- Original life insurance policy document.
- Original premium payment receipts.
- Latest unit balance statement (you get this by post after each premium payment).
- Download this surrender request letter, fill-in your specific details, and print a copy.
- Get a copy of the S.V. Application and Form No. 3510/5074 either from your agent or from a nearby LIC office and fill it up.
- Photocopies of #1, #2, and #3 above.
- Staple together the filled-up surrender request letter, original life insurance policy document, photocopy of premium paid receipts, photocopy of latest units allotted statement, S.V. Application and Form No. 3510/5074 in that order. Let’s call this as our “Submission Packet.” This set of documents is what you’ll need to submit at the LIC Branch Office from where your policy was issued (you cannot submit them at any other branch office).
- Staple together the photocopy of the policy document, original premium paid receipts, and original units allotted statement. Let’s call this as our “Reference Packet.”
- Go to the branch office from where your policy was issued and handover the “Submission Packet” at the counter. Once your policy details are verified, the person at the counter will print and sign an acknowledgment receipt. Verify the details on this receipt and attach it to your “Reference Packet.”
- Wait for the check to reach you by post.
- Once the check arrives, verify your name and account number for correctness and take a photocopy. Attach this photocopy to your “Reference Packet.”
- Deposit the check at your bank.
- Once the check is credited to your account, tear-up your “Reference Packet” if you feel like doing so.
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