Surrendering or making a policy paid-up?

[shameek]

I need advice about my 2 insurance policies. I need to know whether I should continue paying, convert these into paid up or surrender them. I plan to buy term & health insurance policies from the saved premiums.

My 2 policies are as follows:

a) LIC Jeevan Sree - 1 : Commencement Date of this policy is June 2005. I pay a half yearly premium of Rs 12850/- for this. The Sum Assured is 5 Lakhs. The policy term is 25 years with a premium paying term of 16 years. This is a traditional endowment policy. Please advise whether I should continue paying the premium or convert this into a paid up. I thought about surrendering it but the surrender value was around Rs 1 Lakh, which is even less than the amount I have paid so far.

b) ICICI Prudential Assure Wealth - Super: This is a ULIP which was mis-sold to me recently. The Sum Assured is 1 Lakh. I pay an annual premium of Rs 20000 for this. I started this policy in February 2010 & have paid 3 premiums already. The next premium due is on February 2013, but I do NOT want to pay this since it will NOT even qualify for tax savings this year! I want to surrender this policy in February 2013 instead, as soon as 3 years are up, & cut my losses, if any. Should I do this?

Could you please advise me on these?

[Rahul]

a) LIC Jeevan Sree - 1 : Commencement Date of this policy is June 2005. I pay a half yearly premium of Rs 12850/- for this. The Sum Assured is 5 Lakhs. The policy term is 25 years with a premium paying term of 16 years. This is a traditional endowment policy. Please advise whether I should continue paying the premium or convert this into a paid up. I thought about surrendering it but the surrender value was around Rs 1 Lakh, which is even less than the amount I have paid so far.

Paid Up -
If you stop paying the premiums after 3 policy years, the policy acquires a Paid Up Value for a Reduced Sum Assured but the policy would be eligible for any future regular additions.

Surrender Value -
If you want to surrender the policy – There is a Guaranteed Surrender Value after 3 policy years
You will get -
Guaranteed Surrender Value = 30% of all premiums paid – 1st year’s premium

[Rahul]

b) ICICI Prudential Assure Wealth - Super: This is a ULIP which was mis-sold to me recently. The Sum Assured is 1 Lakh. I pay an annual premium of Rs 20000 for this. I started this policy in February 2010 & have paid 3 premiums already. The next premium due is on February 2013, but I do NOT want to pay this since it will NOT even qualify for tax savings this year! I want to surrender this policy in February 2013 instead, as soon as 3 years are up, & cut my losses, if any. Should I do this?
First buy term insurance for your life cover. Also check tax provisions before surrender (http://www.policywala.com/content.php/206-Surrendering-your-insurance-policy-check-income-tax-provisions!).