What Is Partial Withdrawal Of ULIPs?

IndiaFirst Life
• 24 Oct, 2024

A Unit Linked Insurance Plan (ULIP) offers the dual benefit of investment and insurance. One of the flexible features of ULIPs is the option for partial withdrawals. Understanding how and when to make partial withdrawals can help policyholders manage their financial needs without completely surrendering their policy.

What is ULIP?

A ULIP is a financial product combining life insurance with investment in various funds such as equity, debt, or balanced. Part of the premium paid is used for life insurance coverage, while the rest is invested to generate returns.

Features of a ULIP Plan

Provides both insurance and investment.
Allows switching between different funds based on market conditions.
Enables withdrawing a portion of the invested amount after a certain period.

Partial Withdrawal in ULIPs

Partial withdrawal refers to the ability to withdraw a portion of the accumulated funds from your ULIP policy after a specified lock-in period, usually five years. This feature adds liquidity to the investment, allowing access to funds in times of need without terminating the policy.

Conditions for Partial Withdrawal

Lock-In Period: Partial withdrawals are typically allowed after the completion of the five-year lock-in period.
Minimum Balance: A certain minimum fund value must be maintained in the policy after the withdrawal.
Frequency and Amount: Insurers may set limits on the frequency and amount of partial withdrawals.

Benefits of Partial Withdrawal

Liquidity

Partial withdrawals provide liquidity, making it easier to meet financial emergencies or other needs without surrendering the entire policy.

Flexibility

This feature adds flexibility to the ULIP, allowing policyholders to access funds as required while keeping the policy active.

ULIP Tax Benefits**

Withdrawals made after the lock-in period are generally tax-free, provided the annual premium does not exceed 10% of the sum assured. This ensures policyholders can enjoy ULIP tax benefits while accessing their investment.

Using ULIP Returns Calculator

Before making a partial withdrawal, it’s advisable to use a ULIP returns calculator to assess the potential impact on your investment. This tool helps in estimating the returns based on the current fund value and can aid in making an informed decision.

Partial withdrawal is a valuable feature of a ULIP plan, offering liquidity and flexibility while maintaining the benefits of insurance and investment. By understanding the conditions and using tools such as a ULIP returns calculator, policyholders can make informed decisions that align with their financial goals and needs. Ensure to consider the tax implications and maintain the minimum balance to continue enjoying the benefits of your ULIP policy.**

** Tax exemptions are as per applicable tax laws from time to time.

Disclaimers:

Unit Linked Insurance Products are different from the traditional insurance products and are subject to risk factors. The Premium paid in unit-linked life insurance policies are subject to investment risks associated with capital markets and NAVs of the units may go up or down, based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. IndiaFirst Life Insurance Company Limited is only name of the Insurance Company and _________________ (UIN__________) is only the name of the Unit Linked Life Insurance contract and does not in any way indicate the quality of the contract, its future prospects, or returns. Please know the associated risks and the applicable charges from your Insurance Agent or the Intermediary or policy document issued by the Insurance Company. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns. For more details on risk factors and terms and conditions, please read the sales brochure carefully before concluding the sale.

IndiaFirst Life Insurance Company Limited, IRDAI Regn No.143, CIN: U66010MH2008PLC183679, Address: 12th & 13th floor, North [C] Wing, Tower 4, Nesco IT Park, Nesco Center, Western Express Highway, Goregaon (East), Mumbai – 400 063. Toll free No – 1800 209 8700. Email Id:customer.first@indiafirstlife.com, Website :www.indiafirstlife.com, Fax No. +91226570600. Trade logo displayed above belongs to our promoter M/s Bank of Baroda and is used by IndiaFirst Life Insurance Co. Ltd. under license. Adv. Ref. No.:_________.

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by IndiaFirst Life
Headquartered in Mumbai, IndiaFirst Life Insurance Company Limited (IndiaFirst Life), with a paid-up share capital of INR 754.37 crore, is one of the fastest growing private life insurers in India in terms of New Business IRP in Fiscal 2023. Our key differentiators are our simple, easy-to-understand products that are optimally priced. As of Sept 30, 2023, we offered 30 retail products, 13 group products along with six riders (across retail and group portfolios), along with policies under the PMJJBY scheme, catering to protection, savings, health and retirement needs of our customers, leveraging multiple distribution capabilities and augmenting various investment options. In all propositions under the categories of Participating Plans, Non-Participating Savings Plans, Non-Participating Protection Plans, Unit Linked Insurance Plans, Group Protection Plans, Corporate Funds Plans, Riders & PMJJBY form a complete suite of offerings that help our customers prepare for the certainties of life. Our products are easy to understand and optimally priced with a developed comprehensive risk management framework/policy.