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LIFE INSURANCE: Settlement option in Ulips allows policyholders to stay invested

In case you policy does not offer such an option, we would suggest to reinvest your maturity proceeds provided you do not need the funds in the recent times

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My insurance policy is maturing next year. Can I continue with the plan and earn more interest if I don't withdraw the money? 
- Harsh Jeswal

There are few plans available in the insurance market space that offer you the flexibility to continue with your savings even after the tenure of the plan is over. Typically this option is available with unit linked plans. This option is called as a settlement option and during this period you fund continue to remain invested and participate in the growth. As we have limited information on the type of your plan, we suggest you to refer to your policy document and check for this option. In case you policy does not offer such an option, we would suggest to reinvest your maturity proceeds provided you do not need the funds in the recent times.

I am 34, married, and have a five-year-old child. I am a businessman with a lot of savings and have taken a housing loan which helps me save tax. Do I need insurance? 
- Kunal Parikh

Businesses sometimes are unpredictable and have unforeseen risks, which may affect or lower the anticipated profits and if need be we might as well have to induce further capital and here your savings may help for the shorter duration, since you have not quantified how much savings you have accumulated till now.

While it is a good thing that you have a lot of savings it is important to continue with it. However it is better to have an objective so as to create a discipline around your savings. Insurance is an avenue which helps you to do that. Insurance helps you to save or invest for your child, retirement, or any other goals in a disciplined manner in various solutions based on your needs and risk appetite. However to begin with and since you have already taken a loan, it is imperative for you that you first need to safeguard your family against these obligations and you may begin with covering yourself with a term plan. Aside to all these benefits, insurance also helps in savings your taxes.

The writer is MD and CEO- Edelweiss Tokio Life Insurance

Clear your doubts with regard to life insurance. 
Send your queries to
personalfinance@dnaindia.net

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