I believe I have made one of the worst errors by investing in a whole life insurance product in 2007.

Being an NRI, currently working in Dubai, I was desperate to have a pension income at the earliest and also an insurance policy. This was essential for me as I didn't know how long I could hold on to my NRI status.

Hence I was approached by my insurance agent, who advised me to consider TATA-AIG's Mahalife policy where the insurance premium will be paid for 12 years and thereafter I will get a sum assured return of guaranteed 5 per cent for the rest of my life (whole life).

Besides, I will get a non-guaranteed bonus of few percentages depending on the company's performance from the 6th year onwards. Since it was initial days of private insurance, I jumped in and bought the policy, convincing myself that this was an ideal solution for me. Even though the annual premium is huge (Rs 1,58,000*2 = Rs 3,16,000).

But today as I am trying to get the courage to get out of the policy, I find there is a huge loss since the semi-annual premium being paid is Rs 1,58,000. And the returns � the sum assured as well as guaranteed bonus and an annual dividend coupon � were not commensurate with what I will be putting for 12 years.

After investing Rs 37,92,000 (Rs 3,16,000812), I was getting a sum assured of only Rs 46 lakhs. Any term insurance policy would have given me a higher sum assured than this insurance policy.

What I am really worried is that the 5 per cent annual return will not beat the inflation and the money will be meagre then (when I retire) as a pension, even though it seems huge today.

I approached the same insurance agent and requested if I could switch to some ULIP so that I could beat the inflation. Or start investing in an MF.

But he said it is not possible to switch. And also, there will be no guarantee of what will I be eligible in terms of insurance coverage if I closed the insurance policy.

Hence I am in a bigger mess now having a liability on one side, a huge premium which I could have used elsewhere to achieve my objectivity. Unfortunately I have not found any trustworthy financial advisor in Dubai. Hence, I have still not found the solution.

Meanwhile I am continuing with the policy and hoping to put the 5 per cent guaranteed bonus into an MF as and when it comes after 12 years.

Policy details:

Policy name: Mahalife from TATA-AIG

Policy start date: 26/11/2004

Premium to be paid for: 12 years

Sum assured: Rs 46 lakhs

Semi-annual premium: Rs 1,58,000

I have paid the premium for 3 years + 1 semi annual (totaling Rs 11,06,000). Still another 20 lakhs to go!

Other benefits:

~ 12th policy year onwards is a 5 per cent guaranteed coupon

~ 6th policy year onwards an annual dividend coupon will be declared based on company performance