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...First, of course, is the complexity of the product. Pick up the brochure of any bundled insurance policy and read it. You are likely to have more questions than answers. Second, the returns from these plans are low in the range of 0.5-6%. Given these are long-term products, we don’t recommend them as they can generate negative real rate of return (investment rate minus the inflation rate). And third, of course, is the premature surrender penalty, which hurts the most. This is the money you forfeit when you stop funding the policy prematurely. The surrender penalty is fixed depending on the premium payment term: number of years for which you pay a premium. So, for a premium payment term of less than 10 years, the guaranteed surrender value is 30% of the premiums, provided two annual premium instalments were paid. In other words, if you quit before the second premium, you get no money. If you quit in the third year, you get just 30% of the premiums. ...Live Mint on May 15, 2017, 5:13 p.m.