Close
Close

Buy a Life Insurance Plan in a few clicks

Now you can buy life insurance plan online.

Kotak e-Term

Protect Your family’s financial future with Kotak e-Term. 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 Lifetime Income Plan

Retirement years are the golden years of life. Know more

Close

Get a Call

Enter your contact details below and we will get in touch with you at the earliest.

  • Select your Query

Thank you

Our representative will get in touch with you at the earliest.

What is Lock-In Period in ULIPs?

The ULIP lock-in period refers to the time period during which you are unable to withdraw your investment. Click here to get more clarity over the lock-in duration of the ULIP policy in depth in this article.

  • Feb 28, 2022
  • 5,058 Views

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.

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

Kotak e-Invest

Download Brochure

Features

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

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

T&C

- A Consumer Education Initiative series by Kotak Life

Similar Articles

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

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

How Does NPS Work?

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

How To Make Most of Your Money After Retirement?

Retirement: A New Start to Life!

How Can I Achieve My Wealth Goal with ULIP Investment?

Is ULIP A Good Investment Option?

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

What are Fixed Maturity Plans and Why Should I Invest in Them?

Why ULIP Should Be a Part of Your Investment Portfolio?

Is It Worth Buying ULIP Plans For 10 Years?

How Safe is it to Invest in ULIP plans?

ELSS vs ULIP: Which is a Better Investment?

What are the Instruments Available for Building a Retirement Corpus?

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

Inflation: A Key Factor to Consider into Retirement Planning

Can I Surrender My ULIP Policy after 2 Years?

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

What Happens to ULIP Premiums Paid if the Market Crashes?

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

ULIP Plan or Traditional Insurance Plans - Which is better?

Calculating a Retirement Corpus that can Support Your Lifestyle

Save Early to Keep Living Your Dreams Post Retirement

Pros and Cons of Retirement Annuities

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

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

Types of Pension Plans for Your Retirement

What are the Benefits of ULIP - Explained

Important Questions To Ask Yourself Before Choosing A Good Retirement Plan

Retirement Planning Guide for Working Men and Women

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

Long Term Investment Guide for Your Retirement

Which Pension Plan Suits You best?

Best Insurance Plans for a Guaranteed Monthly Income After Retirement!

What are the Charges Levied on ULIP?

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

Are Annuities Great For Early Retirement?

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

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

The Significance of Number 8,000 in Retirement Planning

यूलिप में 8 शुल्क जो आपको अवश्य जानना चाहिए

How has ULIP Grown Over the Last 3 years?

5 Reasons to Buy ULIP for a Secured Financial Future

Which Is Better: ULIP or SIP?

What Are Superannuation Benefits?

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

What is a Defined Benefit Plan and How it Works?

Top Investment Options for Retirement Planning

EPF Grievance Management: All You Need to Know

Benefits Of Retirement & How Investments Can Help You Enjoy Them

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

What are the things to consider before buying ULIPs?

Demystifying the Retirement Planning Process

Different Types of ULIP Investments in India

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

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

What are the Rules for Exit From NPS?

Retirement Planning: Use our Retirement Calculator to Plan Ahead

Importance of financial Planning for Retirement

What Are Mortality Charges In ULIP?

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

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

Benefits of Early Retirement Plans

Top 6 Reasons Why You Should Get A Pension Plan

Do Pension Plans Allow any Death Benefits?

FAQs on Taxation of ULIPs

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

What is the Minimum Lock-in Period for ULIP?

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

What is the difference between Life Insurance and ULIP?

Retirement Planning at 50? You Are Still Good to Go

Invest for your second innings with a guaranteed savings plan

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

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

What is an Annuity Plan, and How Does Annuity Plan Work?

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

A Quick Guide to Retirement Plans

Ten Signs That You're Ready to Retire

How should one decide on fund allocation within NPS?

Importance of Retirement Planning

NPS for Housewife

How Do Annuity Options Work In NPS

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

How Has NPS Performed in Comparison with Other Instruments?

Give Your Retirement Savings A Booster-Shot with Annuities

What are the Uses of ULIP?

What Are Retirement Pension Plans?

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

How can NPS help you save tax?

A Beginner's Guide to Understanding 401k Retirement Plan

यूलिप और उनके प्रकार क्या हैं?

What is Fund Value in ULIP?

What is a Retirement Plan - What are its Features?

How Much Corpus Does One Need for Retirement?

Meaning of Sum Assured in a ULIP

Top 6 Flexible Benefits That ULIPs Offer

At What Age Should You Start Your Retirement Planning?

Different Types of Retirement Schemes

What are ULIPs and their Types?

Is it possible to live a financially independent life, even after you retire?

5 Common ULIP Myths That You Should Stop Believing

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

How Does Pension Plans in India Works?

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

What are the Differences Between ELSS ULIP and Mutual Funds?

Tips to invest your voluntary retirement scheme money

Saving for approaching retirement with retirement insurance

Understanding Annuity Plans

Advantages of Pension Schemes and Retirement Plans

Top 4 Mistakes To Avoid While Planning For Your Retirement

What is Partial Withdrawal in ULIPs?

How To Choose The Right Pension Plan?

How to Win at Retirement Savings?

How To Keep Your Retirement Accounts from Being Hacked?

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

Retirement Planning for Millennials

Un-Retirement - Are You Ready For It?

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

Types of Retirement Plans

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

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

Is ULIP a Complex Financial Product?

Can NRIs Invest in ULIP Plans Offered in India?

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

Benefits of Early Retirement Planning in India

What tax benefits are there on saving for retirement?

How to Maximize Your Retirement Savings with a Pension Scheme in India

5 Notable Investment Options for Retirees

Is ULIP Better Than FD?

Top 4 Myths About ULIP Investments You Should Know

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

5 Steps to Gift a Smart Retirement Plan to Your Parents

Retirement planning with a systematic life insurance plan

Is ULIP a Good Option for People Above 60?

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

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

7 Secrets that can Make Your Post-Retirement Phase Prosperous

Know Why You Should Stay Invested in Your ULIP Plan

Why Should You Invest in NPS?

Why You Should Invest In An Annuity Plan?

How Does ULIP Work in India?

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

Terminologies You Should Understand About Retirement Plans

Do ULIPs Give Good Returns On Investments?

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

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