Buy a Life Insurance Plan in a few clicks

Now you can buy life insurance plan online.

Kotak Guaranteed Fortune Builder

A plan that offers guaranteed income for your future goals. Know more

Kotak e-Term

Protect your family's financial future. 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 life cover. Know more

Kotak e-Invest

Insurance and Investment in one plan. Know more

Kotak Lifetime Income Plan

Retirement years are the golden years of life. Know more


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.

Will You Need to Withdraw or Surrender Money From ULIP

Learn about what happens when you surrender your ULIP? Even though there is a lock-in period of 5 years in ULIPs, one may still surrender the policy. Read more to know about it.

  • Mar 02, 2022

In recent years, ULIPs have established themselves as reliable long-term investment tools that provide high profits and returns on investment. A Unit Linked Insurance Plan is a combination of insurance and investment which is subject to a five-year lock-in period. It is one of the most interesting financial instruments available to investors. Unit-Linked Insurance Plans provide insurance coverage while also producing profits through investment sources in a manner similar to mutual funds. The insurance provider launches a new plan and encourages investors to participate - which means that ULIP plans invest in stocks, commodities, and debt instruments. Let us go over some details of ULIP plans to make these terms and conditions clear.

Surrendering ULIPs Before Lock-In Period

ULIPs have a five-year lock-in term, though it is possible to cancel the insurance. The money, on the other hand, will not be paid to the policyholder until the completion of the 5-year period. It’s worth noting that the amount paid after 5 years is not the fund’s actual worth on the day of surrender.

The leftover ULIP fund performance value is transferred to the Discontinued Policy (DP) fund after discontinuation charges are deducted. Until the conclusion of the lock-in term, your funds will stay in the DP fund. During this time, a fund management fee of up to 0.5 percent of the fund’s value may be paid. This fund can also generate interest at a rate of around 4 percent per year, ensuring a minimum guaranteed return.

Surrendering ULIPs After Lock-In Period

While there are no charges on exit fees after the lock-in period, surrendering your plan is not recommended. Staying invested for extended period of time, such as 15-20 years, allows you to profit from market regularization while also distributing mortality, fund management, administrative, and other expenses across the policy’s tenure. Unit cancellation or a reduction in the market value are used to cover the associated expenses. As a result of the larger deductions in the early years, the investment over the 5-year period is smaller than in the later years. Hence, abandoning the fund after the lock-in period reduces the investment value of the ULIP fund performance.

Reviving Surrendered ULIP Plan

Even if you surrender the scheme before the lock-in period is completed, you have the option to revive it within two years of surrender. The surrender costs levied before are returned to the DP fund value upon re-activation, and the outstanding ULIP premium and related charges are subtracted.

ULIPs and Withdrawal

Partial Withdrawal

The sum secured for your ULIP plan is only repaid to its original value after two years if you make a partial withdrawal. This is also contingent on you not withdrawing any further funds during this time. This means that if the withdrawal is made less than two years before the policyholder’s death, the death benefit will be reduced. After the age of 60, any partial withdrawals are subtracted from the death benefit.

To conclude, ULIPs are not only fantastic investment alternatives, but their simplicity of partial withdrawal and policy surrender also makes it simpler to manage one’s finances in the event of an unexpected need or emergency without any major loss. It definitely makes for a good investment!

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

Kotak e-Invest

Download Brochure


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

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


- A Consumer Education Initiative series by Kotak Life

Similar Articles

Can ULIP Help in Achieving Short-Term Financial Goals?

Is Life Insurance Investment Worthy Enough

Why Do You Need A ULIP Plan - All You Need To Know

Difference Between Passive and Active Investing

Why Should You Build an Emergency Fund?

ULIP Investment Benefits You Must Know

Learn About Safe Investments with High Returns in India

Planning For Children's Future

Is ULIP A Good Investment Option?

What is Mutual Funds? | How Mutual Funds Work, Definition

Is ULIP a Complex Financial Product?

What is Compound Interest, And How Do I Calculate it?

How has ULIP Grown Over the Last 3 years?

Can You Invest in Both Term Insurance and ULIP?

How ULIPs can help you achieve your financial goals

ULIP Plans Riders You Should Know About

उच्च रिटर्न प्राप्त करने के लिए सर्वश्रेष्ठ इन्वेस्टमेंट विकल्प

Why Should You Invest in NPS?

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

Which is Better – FD, Mutual Fund, SIP, or ULIP?

Investments Options to Buy a house in India

Know Why You Should Stay Invested in Your ULIP Plan

Top 5 Investment Options in 2022 for Healthy Returns

ULIP As An Investment Option For Senior Citizens

How to Build a Strong Financial Foundation For the Future?

Debt ULIPs vs. Debt Mutual Funds: What's the Difference?

Importance of Portfolio Management

What Is Social Impact Investing and How Does It Benefit Society?

How Increasing Your SIP Every Year Helps You Reach Your Financial Goal Sooner?

What are Some of the Safest Investment Options in India?

Here's are the uses of ULIP your must be aware of

6 Important Tips to Maximize Your Gains with ULIP Investments

Different Types of ULIP Investments in India

How to Calculate Your ULIP Returns?

What are the things to consider before buying ULIPs?

Does Rupee Cost Averaging Work In Unit-Linked Insurance Plans?

Best Investment Options to Cover Your Child's Education

Top 10 Investment Strategies to Create Wealth

Will AI be Your Future Financial Adviser? What Role Will Humans Play?

Beginner's Guide to Wealth Creation: Meaning, Strategies, & Importance

How to Use Recurring Investment Strategies to Build Wealth?

Why are ULIPs One of the Best Tax Saving Instruments?

What are the Minimum and Maximum Investments in ULIP?

How to Create Short-Term and Long-Term Wealth with ULIPs - Kotak Life

How Do One-Time Investment Plans Work?

Why Should I Invest in ULIP?

Benefits of ULIP as a Child Insurance Plan

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

Building wealth through regular investing

What is a Child Money Back Plan, and How Does it Work?

How to Plan your Investment to Achieve Periodic Financial Goals?

Investment Options for NRIs in India

ULIP Plan as a Gift

How to Manage Inheritance Money?

What is ULIP and Its Benefits?

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

ULIP Investment Strategy: Top Tips to Improve Your ULIP Gains

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

ULIPs Investment – A Boon or Bane?

Best Investment Plans For You To Invest In 2023

What is Equity Mutual Funds: Meaning, Types & Benefits

यूलिप प्लान में परिपक्वता लाभ क्या हैं: फंड वैल्यू सम एश्योर्ड या ओनली फंड वैल्यू?

What is Fund Value in ULIP?

ULIP NAV - Everything You Need to Know

Are Investment Returns Guaranteed in a ULIP?

Understanding ULIP Risks: What are the Odds of Losing all my Money and Projected Returns?

How Can ELSS Funds Help You Save Tax & Create Wealth?

Best Investment Options in India in 2022

How to Save Money from Salary?

8 Important Tips to Maximize Gains with ULIP Investments

Creating a second source of income with life insurance

What is ULIP Renewal?

Planning For Son or Daughter's Wedding

How Much Wealth Can You Create from ULIP in 10 years?

Difference Between Linked and Non-Linked Insurance Plans

Difference Between ULIP and Endowment Plan?

What is Savings and the Importance of Saving Money

Here's Whether You Should Link ULIP Plan with your Term Insurance

Successful Financial Planning for Urban Women

ULIP Withdrawal Conditions - Before and After 5 years

Is the surrender value of ULIP taxable?

What is Direct Investment and its Types?

How to Make Your Financial Portfolio?

यूलिप के फायदे (Benefits of ULIP in Hindi)

What Is a Credit Score? Definition, Factors, and Ways to Raise It

How To Track ULIP Performance?

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

How is the Compound Annual Growth Rate (CAGR) Calculated in ULIP?

ULIP Frequently Asked Questions (FAQ) - Kotak Life

Why Are ULIPs Called Flexible Investments?

Four Financial Lessons from The Vedas on Living Life to The Fullest

How Much Wealth Can You Create From ULIP in 10 years?

Long Term Savings Plan - Best Savings Investment Plans in India

Top ULIP Myths That You Must Stop Believing In

5 Reasons to Have a Child Education Plan

What are the Best Investment Options for Young Adults?

Best One-Time Investment Plans in India

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

Top 11 Investment Plans Available in India

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

What are Financial Assets & their types?

What is the Time Value of Money (TVM)?

ULIP policy: What happens when you stop paying ULIP policy premium during lock-in period

How Safe is it to Invest in ULIP plans?

Can You Have ULIP Plan and Health Insurance Plan Both?

Can I Surrender My ULIP Policy after 2 Years?

How to Plan Your Child's Education - A Step-by-Step Guide

What's Better for Your Child's Education? Child Plans or Mutual Funds?

How to Cancel ULIP Policy?

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

Here's Myths on Investments in ULIP Plans

Corporate Bonds: Meaning, Types & Benefits

Is This The Right Time To Invest In ULIP? Why or Why Not?

Balancing Investment Between Risk and Return on Investments

Unit-Linked Life Insurance (ULIPs) vs. Term Insurance

Top 5 Principles That Need to be Followed for Wealth Creation

What are the Best Investment Options For Females?

8 Charges in ULIP That You Must Know

यूलिप और उनके प्रकार क्या हैं?

How Can a Legal Nominee Claim ULIP Benefits are the Policyholder’s Death?

Which are the Best ULIP Plans in India for Children?

Which is a Better Investment - Mutual Funds Or ULIP?

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

How To Invest Money In ULIP?

Do ULIPs Give Good Returns On Investments?

Safe Investment Options with High Returns for FY 2018-19

ULIP Capital Gain Tax: Check Tax Norms for Capital Gain on ULIPs

What is Lock-In Period in ULIPs?

Why ULIP is Better Investment for Long-Term Wealth Creation?

Planning for Your Child's Higher Education? Explore These Investment Options

Customising investments to manage your wealth

How and when should you exit from bad-performing ULIP?

All you need to know about Fund Switching in ULIPs

What are ULIPs and their Types?

The lesser-known facts about ULIP policy that customers should be aware of?

Difference Between Guaranteed Savings Plan and ULIP

What are the Best Investment Options for Students in India?

वित्तीय संपत्तियां और उनके प्रकार

Factors Affecting Share Prices In The Stock Market

5 Reasons to Buy ULIPS for a Financially Secured Future

ULIP vs FD - Which is Better and Why?

Know How to Invest at Every Age for Larger Returns

How to Manage Your Portfolio Like a Professional?

Receiving regular payouts at various stages of life

What is ULIP Plan, and How Does it Work?

Asset Allocations in ULIP - Know the Top Benefits

What is Partial Withdrawal in ULIPs?

How to Start Saving Money in 10 Simple Ways?

Are Money Back Policies Helpful? A Complete Guide

Learn About Safe Investments with High Returns in India

Can ULIP Policy be Transferred?

उच्च रिटर्न प्राप्त करने के लिए सर्वश्रेष्ठ इन्वेस्टमेंट विकल्प

All you need to know about claiming maturity proceeds from Ulip

What are loyalty additions, and how do they work in a ULIP?

Do You Know the Difference Between Savings and Investment?

Tax-Deferred Savings Plan: Overview, Benefits, Works

Endowment Plan vs Fixed Deposit?

यूलिप में 8 शुल्क जो आपको अवश्य जानना चाहिए

What Is Financial Planning?

ULIPs: Suitable for all

What are the Advantages and Disadvantages of ULIP?

What are Index Funds, and How Do They Work?

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

How to Fix the 9 Most Common Financial Problems Your Family is Facing

5 Best Long Term Investments To Add To Your Portfolio in 2023

Got a Salary Hike? Here’s How to Plan your investment further

First Job? Here are Some Tips on How to Manage Finances

Planning Financial Goals and Objectives of Financial Planning

What is Money Management? Definition & Example

Rate of Interest on Different Investment Plans in India

FAQs on Taxation of ULIPs

Here's Why it's a Good Time to Explore ULIPs as an Investment

How to Increase Net Worth Along with Family Protection

What are the Best Investment Options for Beginners or Amateur Investors in India?

Develop an investing plan

Are Gains from ULIP Sale Taxable?

Savings Plan for Grandchildren

How to Set Financial Goals for Your Future

Early Investing and the Power of Compounding

What is Fund Switch in ULIP? And ULIP Fund Switching Techniques

What are the Best Short-Term Investment Plans with High Returns?

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

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

ULIP Vs Life Insurance Plan Know the Difference

How Can ULIP Plan be as an Investment for Your Child

Why ULIP Should Be a Part of Your Investment Portfolio?

Can NRIs Invest in ULIP Plans Offered in India?

What is a Savings Plan and What are is Benefits?

Why is Portfolio Diversification Important? How to Diversify Your Portfolio?

4 Rules To Keep In Mind To Secure Your Child’s Future Financially

How to Apply for Death Claim Benefits in ULIPs - Kotak Life

ULIP Plan or Traditional Insurance Plans - Which is better?

What is a Bond Fund and How It Works?

यूलिप के फायदे और नुकसान क्या हैं?

What is SIP Calculator, and How it Works?

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

यूनिट लिंक्ड इंश्योरेंस प्लान में लॉयल्टी एडिशन कैसे काम करते हैं

ULIP Benefits You Can Avail from Early Investing