What is Lock-In Period in ULIPs?

Buy a Life Insurance Plan in a few clicks

Now you can buy life insurance plan online.

Kotak e-Term Plan

Protect Your family’s financial future with Kotak e-Term Plan. Know more

Kotak Assured Savings Plan

A plan that offer guaranteed returns and financial protection for your family. Know more

Kotak Guaranteed Savings Plan

A plan that offers long term savings and insurance in one premium. Know more

Kotak e-Invest

Insurance and investment in one plan with Kotak e-Invest. Know more

Kotak Health Shield

Insurance against medical expenses related to heart, brain, liver and Cancer. Know more

What is Lock-In Period in ULIPs?

What is Lock-In Period in ULIPs?
  • 28th Feb 2022 |
  • 1,331

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-Invest

In this policy, the investment risk in the investment portfolio is borne by the policyholder.


  • Return of Mortality Charges*$
  • Enhanced Protection
  • Multiple Plan Options
  • Zero Premium Allocation Charges
  • Tax Savings^

Ref. No. KLI/22-23/E-BB/521


Browse our library of resources

- A Consumer Education Initiative series by Kotak Life

Similar Articles

Retirement Planning Guide: These 5 Steps Will Help You Towards a Safe, Secure and Fun Retirement

How to Win at Retirement Savings?

5 Steps to Gift a Smart Retirement Plan to Your Parents

Top 6 Flexible Benefits That ULIPs Offer

How Does NPS Work?

What are the Differences Between ELSS ULIP and Mutual Funds?

What is Fund Value in ULIP?

Demystifying the Retirement Planning Process

How Is ULIP Different from Other Life Insurance Plans? Where Can I Invest - ELSS, ULIP, or PPF?

How To Make Most of Your Money After Retirement?

Why Should You start Retirement Planning as soon as you start a job?

What are the Rules for Exit From NPS?

What is the Estimated Return Percentage on ULIP? Do Investors Get Compound Interest?

Retirement Planning - How To Calculate Your Retirement Premium in India?

ULIP: Can You Surrender ULIPs or Withdraw Money from It?

Do Pension Plans Allow any Death Benefits?

How Has NPS Performed in Comparison with Other Instruments?

Retirement: A New Start to Life!

5 Reasons Why ULIP Plans are One of The Best Retirement Planning Instruments

Advantages of Pension Schemes and Retirement Plans

Managing Your Retirement Income with an insured retirement plan

यूलिप के 8 शुल्क

What is an Annuity Plan and How Does Annuity Plan Works | Kotak Life

NPS for Housewife

What is NAV in ULIP, and How is it calculated?

Types of Annuity Plan | Annuity Definition - Meaning & Key Benefits | Kotak Life

What are the 4 Financial Phases of Retirement? How to Budget For Each One?

Retirement Planning for Millennials

How Quickly is Fund Switch Effected in ULIPs? Is it Done the Same Day or After a Particular Number of Days?

Top 4 Myths About ULIP Investments You Should Know

Which Is Better: ULIP or SIP?

How Do Annuity Options Work In NPS

What are the things to consider before buying ULIPs?

How is ULIP NAV calculated? How is the return calculated in ULIP?

Why are ULIPs One of the Best Tax Saving Instruments?

Types of Retirement Plans

How Can I Achieve My Wealth Goal with ULIP Investment?

Worried About Running Out of Money in Retirement? 4 Tips to Avoid This Crisis

Are Annuities Great For Early Retirement?

FAQs on Taxation of ULIPs

Importance of financial Planning for Retirement

Long Term Investment Guide for Your Retirement

Is ULIP Better Than FD?

Tips to invest your voluntary retirement scheme money

ULIP Plan or Traditional Insurance Plans - Which is better?

8 Charges in ULIP That You Must Know

What are ULIPs and their Types?

Why Should You Invest in NPS?

Can I Surrender My ULIP Policy after 2 Years?

How To Invest Money In ULIP?

Meaning of Sum Assured in a ULIP

What is a Retirement Plan - What are its Features?

How has ULIP Grown Over the Last 3 years?

Getting Close to Retirement? Six Key Retirement Planning Tips That Can Help You Retire

Looking for Ways to Earn Lifetime Income in Retirement? Here Are 6 of the Top Options

ULIPs or Pension Plans – Which is a Better Retirement Plan?

What tax benefits are there on saving for retirement?

Why ULIP Should Be a Part of Your Investment Portfolio?

6 Signs That You Are Not Financially Ready For An Early Retirement

How Much Corpus Does One Need for Retirement?

How Does Pension Plans in India Works?

What are the Maturity Benefits in a ULIP Plan: Fund Value Sum Assured or Only Fund Value?

What To Do With Your Retirement Accounts During An Employment Lapse?

Does Having Both ULIP Plan and Other Health Insurance Plan Make Sense?

5 Retirement Planning Tips for a Financially Controlled Post-Employment Life

What Happens If I Stop Paying My ULIP Policy Premium After Paying the First Premium? Will I Still Get The Return?

Here's What Retirement Would Look Like 30 Years From Now

What is Partial Withdrawal in ULIPs?

Types of Pension Plans for Your Retirement

Benefits Of Retirement & How Investments Can Help You Enjoy Them

5 Common ULIP Myths That You Should Stop Believing

What are the Instruments Available for Building a Retirement Corpus?

Know Why You Should Stay Invested in Your ULIP Plan

Is it Suggestible to Take a ULIP Plan Linked with a Term Plan?

Ten Signs That You're Ready to Retire

Top 6 Reasons Why You Should Get A Pension Plan

Is ULIP a Complex Financial Product?

Best Insurance Plans for a Guaranteed Monthly Income After Retirement!

At What Age Should You Start Your Retirement Planning?

Do ULIPs Give Good Returns On Investments?

How To Calculate The Present Value And Future Value Of Annuities?

How Safe is it to Invest in ULIP plans?

How to Choose the Best ULIP Plans to Invest in 2022?

How To Choose The Right Pension Plan?

How to Build a Tax-Free Pension Income for Retirement?

Saving for approaching retirement with retirement insurance

Is ULIP A Good Investment Option?

10 Steps to Figure Out How Much Money You Will Need For Your Post Retirement Plans

Different Types of Retirement Schemes

Why Are ULIPs Called Flexible Investments?

What Are Retirement Pension Plans?

Is it Advisable to Withdraw the ULIP Insurance Policy After 5 Years?

Benefits of Early Retirement Planning in India

What are the Uses of ULIP?

What is the Death Claim Payable in the Case of ULIP?

Why Should Retirement Planning Be on Top of Your Priority List?

What is the difference between Life Insurance and ULIP?

Different Types of ULIP Investments in India

How Can ULIPs Help You Plan for Your Child's Future?

Calculating a Retirement Corpus that can Support Your Lifestyle

Retirement and Pension Plans in India- What are Your Options?

What is ULIP and Its Benefits?

ULIP Tax Benefits: यहां निवेश करने पर मिलते हैं 5 बड़े फायदे

Inflation: A Key Factor to Consider into Retirement Planning

7 Secrets that can Make Your Post-Retirement Phase Prosperous

Un-Retirement - Are You Ready For It?

How Does ULIP Work in India?

Importance of Retirement Planning

Benefits of Early Retirement Plans

What Are Mortality Charges In ULIP?

What Are Superannuation Benefits?

Can NRIs Invest in ULIP Plans Offered in India?

How should one decide on fund allocation within NPS?

Understanding Annuity Plans

Invest for your second innings with a guaranteed savings plan

Why You Should Invest In An Annuity Plan?

Single Premium ULIP or a PPF - Which One is Better?

Which Pension Plan Suits You best?

A Quick Guide to Retirement Plans

Retirement Planning Guide for Working Men and Women

Is It Worth Buying ULIP Plans For 10 Years?

Retirement Planning at 50? You Are Still Good to Go

Important Questions To Ask Yourself Before Choosing A Good Retirement Plan

What are the Advantages and Disadvantages of ULIP?

Save Early to Keep Living Your Dreams Post Retirement

Why Should I Invest in ULIP?

Is ULIP a Good Option for People Above 60?

10 Steps to Figure Out How Much Money You Will Need After You Retire

यूलिप के फायदे (Benefits of ULIP in Hindi)

ELSS vs ULIP: Which is a Better Investment?

The Significance of Number 8,000 in Retirement Planning

What Happens to ULIP Premiums Paid if the Market Crashes?

Pros and Cons of Retirement Annuities

A Beginner's Guide to Understanding 401k Retirement Plan

Is the ULIP Policy Surrender Value Taxble?

Top Investment Options for Retirement Planning

Annuity Plan | How to Choose the Right Annuity Plan | Kotak Life

5 Notable Investment Options for Retirees

What is the Difference Between EPF, VPF, and PPF? What are Their Tax Benefits?

How To Keep Your Retirement Accounts from Being Hacked?

What are the Chances of Losing all my Money in ULIP and How Much Return Should I Expect?

What is the Minimum Lock-in Period for ULIP?

What is Premium Redirection in ULIPs Plans | ULIP Insurance Plans | Kotak Life Insurance

Difference Between Unit-Linked Insurance Plans and Non-Linked Plans

What are the Charges Levied on ULIP?

Give Your Retirement Savings A Booster-Shot with Annuities

Top 4 Mistakes To Avoid While Planning For Your Retirement

Terminologies You Should Understand About Retirement Plans

Who Gets the Benefit After the Maturity of ULIP: The Proposer or The Life Insured?

Are You Planning an Early Retirement? Here's Why Buying Annuity Plan Will Make Sense

What are the Benefits of ULIP - Explained

How can NPS help you save tax?

Which are the Best ULIP Plans in India for Children?

Retirement planning with a systematic life insurance plan

What are the minimum and maximum investment in ULIP? Would the Whole Amount Insured in The ULIP Insurance be Invested in the Market?

5 Reasons to Buy ULIP for a Secured Financial Future