THE CARDINAL rule is not to mix insurance with investment.

Yet, millions of traditional insurance policies that give the "triple benefits" of life insurance, long-term savings and tax benefits are bought every year. These policies not only give sub-optimal returns of 5-6%, but also force the policyholder into a multi-year commitment.

Is there a way out? Yes, you can surrender a policy if you have paid premiums for a minimum number of years. Be ready to suffer a loss when you do this.

You can also convert an insurance policy into a paid-up plan after three years. The policy will continue with a reduced sum assured but you won't have to pay the premiums any further. The paid-up value is given to the policyholder on maturity. The policy turns into a paid-up plan if premiums are not paid for two consecutive years.

This is an option you can explore. It is better than paying premiums for the full term and earning 5-6% returns.