ULIP POLICY surrender

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287 Points Posted on 26 January 2024
If the early Redemption amount of ULIP policy is less than the total premiums paid, is the difference eligible for LT capital loss?? Twelve years back when I and my wife turned 60, we were ill-advised, into buying ULIPs at that time. Having only income out of our savings investments, after 60, we now felt the need for extra funds and had to redeem our ULIPs. We feel cheated by so-called Big Insurance companies, since our paid premiums never grew.
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On 26 January 2024 at 10:33 Report
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Quick Summary
This discussion explores the tax and financial implications of surrendering a Unit Linked Insurance Plan (ULIP) policy, particularly when the redemption amount is less than the premiums paid. It clarifies that such a shortfall is generally not eligible for a capital loss claim for tax purposes. The advice given suggests consulting with a financial planner to weigh the benefits of surrendering against holding the policy until maturity, and checking with the insurance provider for specific surrender terms and withdrawal options.

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Accountant
1227 Points Posted on 26 January 2024

Tax perspective : You cannot claim Capital gain / losses if there is a loss in ulip. 

 

Finance perspective : Sit with a financial planner to decide whether leaving it till maturity or redeeming it is good. 

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On 26 January 2024 at 15:19
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463 Points Posted on 26 January 2024

Sorry to heard that sir. You should have planned your retirement plan. However, it was happened. Please check with your insurance provider before surrender your policy. Now days, Indian market is really good. Based on your Ulip maturity period. Now, You can withdrawal monthly basis. Please check then surrender it.

You can't avail LTCG on your investment loss on insurance. Maturity amount usually comes under tax free. 

ULIP withdrawals can be made only after a 5-year lock-in period with regular payment of all the SIP premiums during these years. Once applicable to partially withdraw a ULIP amount, the typical withdrawal limit is up to 10% of the total SIP premium amount, which may go up to a maximum of 20% of the total SIP premium.

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On 26 January 2024 at 15:38

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