Due to ignorance about different types of life insurance and tax saving schemes, I opted for jeevan anand policy (whole life policy) of LIC last year and paid premium of Rs 38k. The policy matures in 25 years. Later I learned a term insurance for me would have been a better option since that requires much less premium per year and if compared to the policy I have taken, I could easily invest the rest amount in other profitable channels, like mutual fund and PPF. Now I am planning to stop this policy (I am more upset because I clearly understand I was fooled by the agent) and buy a term insurance. Before that I would like to get suggestions from experienced people regarding this. Do you approve my plan? This is my first question.
My second question is, instead of surrendering the policy, the policy , as I heard, can be made paid-up, or in other words, I can get loan against the policy. However, I do not understand this process at all. Can anybody please explain me what this means and whether I should go for it.