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Advice by Anooj Mehta, Vice President, Partner Success at 1 Finance

ULIPs should be viewed as insurance products, not investments. Given that the 5-year lock-in period for your LIC ULIPs has ended, it is advisable to stop paying premiums and surrender these policies. The surrender proceeds will be tax-exempt under Section 10(10D) of the Income Tax Act, and these funds can be effectively redirected to repay your car loan if you feel overwhelmed by debt. However, a 7.5% car loan interest rate is not excessively high. If your cash flow permits, continuing EMI payments while investing the surrendered amount in equity mutual funds could yield better long-term growth.

For the TATA AIA Smart Sampoorna Raksha ULIP, since you have completed only two years, you can continue payments

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