InvestorQ : Why should I not top up ULIP policy?
ishika Banerjee made post

Why should I not top up ULIP policy?

simran Kaur answered.
3 years ago
Top-up to ULIP is payment of extra premium other than promised amount. However, you should know that top-up is as similar like buying a single premium ULIP. So this top-up will simply give you investment and insurance as a normal ULIP scheme would have given without any extra benefits. If you are not in need of additional insurance cover, then this top-up serves no purpose. Moreover, as the top-up buy a new scheme your money will get locked for 5 years as ULIP have a lock-in period of minimum 5 years, thus you loose on liquidity if you are in need of money in future. When it comes to taxation, this top-up will be treated as same as the regular one. So taxation also becomes a bit complex.