THE CASE:
We are in USA. My husband’s family is convincing him to make investments in India. For example, my hub mother asks him to do LIC educational plan. I am not on same page on that because we don’t know what’s going to happen in 20 years. I tell my hub to contribute for education funds in the USA than in India. Am I wrong?
He did one other investment in ICICI where he needs pay Rs 10 lakhs premium yearly for 5 years. The name of the ICICI prudential policy is pru elite wealth super.
They have made him invest on lands and property in India. My husband said when we invested in a property back in 2010 he sent more money from US. That money is stuck there it seems and he can’t get it to the USA so he did investment on some product which the ICICI guy convinced.
Are we going on a right route? All these investments are so confusing? Please throw some light.
THE SOLUTION:
- If you intend to provide education to your kids in the US then it makes more sense to invest there itself or in different economies through dollar denominated funds available there.
- The policy brochure itself mentions – “This is a unit linked insurance plan. In this policy, the investment risk in investment portfolio is borne by the Policyholder. Unit linked Insurance products do not offer any liquidity during the first five years of the contract. The Policyholder will not be able to surrender/withdraw the monies invested in unit linked insurance products completely or partially till the end of the fifth year.”
Please note that you still have an option to stop paying further premiums. But before that a thorough analysis will have to be done based on further required information like total policy period (you have only mentioned premium payment term-5 years), portfolio strategy and funds chosen for investment allocation, purpose of this investment, risk profile, etc. Only thereafter any sensible decision can be taken – whether to continue, make it paid-up or surrender the policy.
- The repatriation of the property sale proceeds is possible depending on how it was purchased i.e through NRE account or NRO account (or other accounts before becoming an NRI, assuming 10 years have passed) after payment of due taxes and few tax document formalities.
- A proper Financial Plan will put you on right route. Guidance from a professional advisor would clear most of your confusion and doubts.
Disclaimer: The above may not be the only solution and there could be multiple solutions for the same case. This is only a case study and should not be construed as any kind of advice. Personal and financial situations differ for each individual. Please consult a qualified licensed professional advisor before taking any action.
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