Kotak Life
Close

Buy a Life Insurance Plan in a few clicks

Close

Now you can buy life insurance plan online.

Kotak e-Term Plan

Kotak e-Term Plan provides a high level of protection to your loved ones in your absence. Know more

Kotak Guaranteed Savings Plan

Kotak Guaranteed Savings Plan is a savings and protection plan that helps you achieve long-term financial goals and provides an insurance cover against any eventuality. Know more

Kotak E-Invest

Kotak e-Invest plan is a complete Unit-Linked Insurance Plan that can be customized as per your goals and needs. Know more

Kotak Health Shield

Kotak Health Shield Plan helps secure your finances in sudden medical expenses such as Cardiac, Liver, Neuro, and Cancer (all early and significant illness stages/conditions of cancer), along with offering protection for personal accidents - in case of accidental death or disability. Know more

Kotak Lifetime Income Plan

Kotak Lifetime Income Plan gives you the security of your income continuing throughout your life and in your absence throughout your spouse's lifetime! Know more

What is Lock-In Period in ULIPs?

What is Lock-In Period in ULIPs?
  • 28th Feb 2022 |
  • 737

The number of people venturing into the realm of investment has increased at an unprecedented rate. People have begun to gravitate toward investment options that provide high returns and encourage asset growth as they become more aware that a good financial portfolio is a combination of savings, income, and investment.

ULIP fund investments have been on the rise, and if you have invested in a ULIP scheme or plan to do so, one subject that may come up for discussion is the ULIP lock-in period.

To provide you with more clarity, we will go over the lock-in duration of the ULIP policy in depth in this article.

All About The ULIP Lock-In Period

The uniqueness of ULIP, or unit-linked insurance plans, is that they combine investing and insurance into one package. Because of the combination of financial stability, market investment, and tax savings, this life insurance policy is often regarded as the most balanced and sought-after plan.

The ULIP lock-in period refers to the time period during which you are unable to withdraw your investment. ULIPs typically have a five-year lock-in term. If you wish to withdraw your investment before the lock-in period, you will be required to pay surrender fees. However, you will be able to surrender the insurance without incurring any penalties after the lock-in term has ended. Because ULIP funds are designed to help you achieve long-term financial objectives, it’s preferable to avoid taking money out until it’s really required.

Lock-In Period in ULIPs - Key Aspects of ULIP Lock-In Period

Key Aspects of the Lock-In Period

  • Withdrawal Option in ULIPs

Most ULIPs do not allow partial withdrawals until the five-year lock-in period is up. After the ULIP lock-in period has ended, partial withdrawals can be made at any time. While certain schemes allow for free unlimited partial withdrawals after the lock-in period, some other options enable policyholders to withdraw a specified amount each month for the duration of the policy. Certain ULIP schemes enable partial withdrawals after three years of plan eligibility. Most withdrawals, nevertheless, are subject to fees, depending on the plan purchased.

  • Surrendering or Discontinuing Before The ULIP Lock-In Period

If the ULIP is terminated or surrendered before the end of the five-year period, the ULIP funds value is transferred to a discontinued policies fund, commonly referred to as the DP fund. According to the terms and conditions of the ULIP policy, surrender or discontinuance costs may also be levied.

In addition, the money is only returned to the plan holder when the lock-in period has finished. Money in the DP fund gets a minimum of 4% interest rate until the end of the lock-in period. This interest rate may change based on the regulating authorities’ regulation framework. In addition, the DP fund amount is distributed to the nominee in the case of the policyholder’s death during the lock-in term of ULIP.

If a policyholder renounces their policy after the lock-in term, they will be reimbursed the fund value at the current net asset value or NAV. Discontinuation fees are not applicable in these situations.

To summarize, ULIPs are a terrific option if you want life insurance and outstanding investment returns, but you must be willing to make a long-term commitment to the plan in order to reap the most rewards. All you need to do is understand the basics, learn about the terms and conditions, deductions and exemptions and make a well-thought-of decision.

Kotak e-Term Plan

Features

  • Nominal Cost
  • Multiple Plan Options
  • Flexible Payout Options
  • Critical Illness Rider
  • Tax Savings
  • Long term Coverage

Ref. No. KLI/22-23/E-BB/492

T&C

Browse our library of resources

- A Consumer Education Initiative series by Kotak Life

Similar Articles

Different Types of Premium in Term Insurance

What is a short term insurance policy?

What Should Be The Duration Of Your Term Plan in India?

Is ₹1 Crore Term Insurance Good Enough Cover?

What All Documents Required For Term Insurance In India?

What is Form 16, Form 16 part A, Form 16 part B, Information Required and FAQs

Can I Make Changes to My Term Insurance Policy Post Purchase?

All you need to Know about Term Insurance Plans for Housewives

Term Life Insurance Plan for Smokers vs Non-Smokers

8 Factors to consider before choosing a Critical Illness Insurance

5 Term Insurance Benefits for Single Women

Reasons You Need Term Insurance Plan as a Self-Employed Person

Key Differences Between Term Insurance, ULIPs, And Health Insurance

9 Ways to Help Family Members in Financial Trouble

Cost of Term Insurance Likely to Increase Soon

Eligibility Criteria for Buying Term Insurance in India

Do You Need Term Insurance Cover After Retirement?

Term Vs. Whole Life Insurance: Which One You Should Buy in India?

Is Group Term Life Insurance Provided By Employer Sufficient?

Why is it important to buy term insurance plan?

Does Your Term Insurance Plan Cover Death Due to COVID-19?

Key IRDAI Regulations That Changed Face Of Term Insurance Industry In 2020

4 Things To Expect From Your Term Insurance Plan in India

Can A Housewife Buy a Term Insurance Plan - All You Need to Know

Understanding Term Insurance Riders

Steps on How to Buy Term Insurance Online

4 Methods to Calculate How Much Term Insurance You Need

Can I Get Term Insurance on Behalf of My Spouse?

Insuring yourself against Ill Health with a Critical Illness Rider

Is There Any Tax Benefit on Term Insurance?

How Much Term Life Insurance Cover Do I Need in India?

Planning For Son or Daughter's Wedding

Should You Have Multiple Term Life Insurance Policies?

How to Buy 1 Crore Life Insurance Policy Without Medical Test

Insuring Protection Against Death With Death Insurance Rider

How Does Term Life Insurance Work? Learn the Benefits

What Happens if you Hide Facts in your Term Insurance?

When is the Right Time to Buy Term Life Insurance Policy for Yourself?

What Types of Deaths Are Covered in a Term Insurance Plan?

Make Your Online Term Plan Your Familys Monthly Payout

Why should single women purchase term life insurance?

While Buying Term Insurance Compare Features, Not Just Premiums

Term Insurance: Smokers vs Non-Smokers

Ensure Protection Against Death, Disease & Disability With Life Insurance

Is term Insurance Needed for People With No Dependents?

Endowment Plans vs Term Plans: Understanding the difference

Why Term Plan Should Be The First Step To Securing Your Future?

Term Plans are Definitely Cheaper than You Think!

Why Should You Add a Rider to a Term Insurance Plan?

How to Identify Term Insurance According to Your Needs?

Should Youngsters, Working Couples Buy Term Insurance Plans?

Why 1 Cr Term Plan Is Necessary For Family?

Choosing Riders for Insurance Plans

Do Beneficiaries Pay Taxes on Term Insurance?

Term Insurance Age Limit – Term Plan for All Age Groups

What is Insurance Premium - A Detailed Guide

How to Ensure That Your Term Insurance Claims Are Never Rejected?

What Is the Correct Age to Buy Term Insurance?

8 Things To Do After Buying Term Insurance

What Happens to Term Insurance Plan With No Beneficiary - Kotak Life

Top 3 Reasons Why You Should Buy A Term Plan Now

Best Investment Plans for Children - Secure Your Child's Future

10-Year Term Life Insurance Policy - Explained in Detail

What Is a Passive Income? Why Should You Use It to Buy a Term Plan?

Why Term Insurance Is Important in times of COVID-19?

How Much Cover Should I Take In A Term Plan?

What is Critical Illness Policy

5 Things To Consider While Buying Term Insurance Plan

Know How to Invest at Every Age for Larger Returns

Insuring Against Accidents with an Accidental Death Insurance Rider

Different Types of Protection Plans

Is Life Insurance Investment Worthy Enough

Why Buy Term Insurance Even at Rising Rates?

Online vs Offline Term Insurance: Which Is The Better Option To Buy

9 Most Frequently Asked Questions on Term Insurance

Can You Increase Your Term Insurance Cover?

Why Should New Parents Buy Term Life Insurance?

Can Non-Resident Indians (NRIs) Buy Term Insurance In India?

Term Insurance Calculator - Everythng You Need To Know

6 Reasons That Make Term Insurance a Must Buy

Why Buying a Term Plan Is Smarter Than Traditional Life Insurance Products

Comparing Term Plans – What Should You Look Out For

Does Term Insurance Cover Accidental Death?

Can I Extend the Tenure of My Term Insurance Plan?

Is it a Good Time to Buy Term Insurance During the COVID-19 Pandemic?

6 Types of Death not covered in Term Insurance Plan

Increasing Term Insurance and Riders

How to Compare Term Insurance Online

Which Term Insurance to Choose: Lump Sum or Staggered Pay-out Plan?

5 Benefits of Early Retirement Planning

Term Insurance: Most Common Term Insurance Myths Explained | Kotak Life

Can I Buy Term Insurance for a COVID-19 Patient?

8 Benefits of Term Insurance You Should Know

Are The Add-ons and Optional Features of Term Insurance Plans Actually Beneficial?

Why Should You Not Take A Term Plan Without Medical Test in India?

What Are Insurance Riders and How to Choose Them in a Term Plan?

Term Insurance – Why You Must Include In Your Financial Planning?

4 Reasons Why You Need Critical Illness Cover

Term Insurance With Riders In India

Buying A Term Insurance Plan? Take These Factors into Account

Ideal Features of a Suitable Term Plan - Act Now for a Stress-free Future

What is a Joint Term Insurance Plan? Key Benefits of Joint Term Plan

What Should You opt for - Limited or Premium Pay?

Should You Buy a Term Plan After 40?

Calculating Term Insurance Premium

5 Reasons to Buy Term Insurance When You are in Your 30s

How To Change The Nominee in Term Insurance?

Term Plan with Spouse Cover

Why Term Insurance Is Better Than ULIP?

Why does every working woman need life insurance?

Why Should You Buy Term Insurance in 2022?

Tips to Choose the Right Term Period for Term Insurance Plan

What is the Right Term Period For Term Insurance Policy? Here's How You Should Choose!

Can Term Insurance Plans Be Purchased As A Gift?

Term Insurance Basics You Should Know

Why Surrendering Your Term Plan Policy In The Final Phase Maybe A Bad Idea?

Individual Life Insurance vs. Group Term Life Insurance

How To Calculate The Amount Of Term Life Insurance You Need?

All About Term Insurance Inbuilt Coverage

Which Death Type Does Your Term Plan Not Cover?

Planning For Children's Future

How Much Term Insurance Do I Need

Is a Term Insurance Policy Portable?

टर्म इंश्योरेंस क्या है? टर्म इंश्योरेंस का मतलब

What are incremental term insurance plans?

Advantages of Buying Term Insurance in Your 50s

Gift Your Father A Term Insurance Plan This Father's Day

Difference between Term Insurance and Life Insurance

Why Premium Amount for Term Insurance is So Low?

How Not To Get Your Term Insurance Claim Rejected

How Does A Term Life Insurance Work in India?

Tax Benefits of Term Insurance in India

Is It Good To Buy A Term Insurance Plan In 2022?

How To Choose the Right Term Insurance Plan?

Term Insurance Plans and Policies for Smokers

What Are the Best Term Insurance Plans for Planning Retirement?

Insuring Against Disability With Disability Insurance Rider

Protection for your family

How to Surrender Term Life Insurance When you have No Liabilities

Everything About Claim Settlement Ratio for Term Insurance

Term Insurance with Critical Illness

Make Your Online Term Plan Your Family's Monthly Pay Cheque

What is Term Insurance - A Complete Guide

What are the Documents Required for Term Insurance Plan?

Is Term Life Insurance Plan an Investment or Expense?

Busting Myths and Facts About Term Insurance Policies

How To Choose the Right Sum Assured Under a Term Plan?

Advantages & Disadvantages of Term Insurance in India

Can Senior Citizens Avail Term Insurance?

Insurance Policy for Housewife In India

Why Buy Term Insurance Plan With a High Cover?

What Is a Renewable Term Insurance Policy?

Term Insurance: What Happens When You Don’t Pay Your Premiums?

Importance of Term Insurance at Every Stage of Your Life

Buying A Term Insurance? Don't Ignore the Claims Settlement Ratio

Do I Need to Give a Medical Test for Term Insurance in India?

Why Married People Should Buy Term Insurance Under MWP Act?