LIC Policy: Continue or Surrender for Mutual Funds? Weighing your options

• LIC policies offer dual benefits of financial protection and guaranteed returns, with tax exemptions under Sections 80C and 10(10D).
• LIC policies generally yield lower returns than mutual funds and incur significant losses if surrendered before maturity, often requiring at least three years of premium payments.
• Mutual funds are market-linked, offer higher liquidity, flexibility, and potential for greater long-term returns, but come with market risk and capital gains tax.
• The article advises separating insurance from investment; term insurance is better for protection, while mutual funds suit wealth creation.
• Before surrendering an LIC policy for mutual funds, assess financial goals, risk tolerance, existing insurance coverage, and consult a financial planner.

Why It Matters: It helps decide if LIC or mutual funds are better for your financial future.