Withdrawal Conditions of ULIPs
A ULIP is a great investment plan as it combines insurance and investment. It allows you to withdraw a large sum of money when required, making it flexible. You can avoid loans and breaking your fixed deposit in case you require a large sum. The partial withdrawal feature of ULIP makes it an unique and flexible plan.
The partial withdrawal feature is a big perk of the ULIP. You can avail a ULIP withdrawal even before the policy matures. But the flexibility that it offers comes with a few terms and conditions. And any withdrawal could have an effect on the life cover.
There is no limit policy on how much you can withdraw from the plan. But withdrawing too much is not an option either as it can lead to termination of the policy. The wise thing to do is to leave enough in the fund to help cover the cost of ULIP plan.
There is no fixed withdrawal limit and it varies across policies and companies. A standard ULIP might permit withdrawal of up to 10% of the total premium paid. At times, the limit is 20% of the premium paid. Withdrawal is possible here after the completion of five years.
Some policies have a limit based on the fund value after the withdrawal. For example, the fund value after the withdrawal should be at least three times the annual premium. Another might demand a post-withdrawal fund value of one annual premium. Some insurers even have a cap on the minimum amount one can withdraw.
There may be limit on the no of withdrawals. Once you exceed that, a small fee may apply for any withdrawal after that. This feature is only available on active policies. To enjoy partial withdrawal, ensure you keep paying your premium.
Every ULIP comes with a lock-in period of five years. This lock-in period plays a valuable function. Your fund value is low in the beginning. Only after you have paid a few premiums does your fund value begin to grow. Consider this when looking at a partial withdrawal.
Partial withdrawal only becomes an option after the lock-in period is complete. You have to consider a few things before that. Did you make any top-up payments towards your policy? In this case, the insurer will settle your withdrawals from the top-up amount first. Only if there is no top-up amount will the base fund value come into play. Or it could be that the five-year tenure for the top-up amount is not complete. In that case, payments will be made from the base fund.
The partial withdrawal feature can help you when you really require funds. But please note that a withdrawal reduces the size of your corpus. It is suggested to use this feature only when absolutely necessary.
HDFC LIFE offers a sound ULIP to help you create wealth. Check out the link below to make a wise investment.
Income Tax Slab 2021-22
February 17, 2020
Income Tax Return Guide - Details You Should Know
November 07, 2016
Best Tax Saving Investment Options in 2022 (FY 2022-2023)
November 08, 2016
Subscribe to get the latest articles directly in your inbox
14 Best Investment Options In India
October 30, 2018
Short Term Investments: Top 11 Short Term Investment Options For 2022
November 08, 2016
Insurance vs Investment - Did You Get the Right Financial Plan?
November 05, 2018
Popular & Recent Articles
How to Plan for Retirement as Per your Age
"The thumb rule for retirement planning is - the earlier you start, the more you save. However, with age, your priorities change too. So, you need to factor in the cost of living in the present vis- a -vis future."
HDFC Life Insurance Company Limited. CIN: L65110MH2000PLC128245, IRDAI Reg. No. 101.
Registered Office: Lodha Excelus, 13th Floor, Apollo Mills Compound, N.M. Joshi Marg, Mahalaxmi, Mumbai 400 011. Email: [email protected], Tel No: 1800-266-9777 (10 am to 7 pm). The name/letters “HDFC” in the name/logo of the company belongs to Housing Development Finance Corporation Limited (“HDFC Limited”) and is used by HDFC Life under an agreement entered into with HDFC Limited.
For more details on risk factors, associated terms and conditions and exclusions please read sales brochure carefully before concluding a sale.
|BEWARE OF SPURIOUS PHONE CALLS AND FICTIOUS/FRAUDULENT OFFERS
- term insurance plan
- savings plan
- ulip plan
- retirement plans
- health plans
- child insurance plans
- group insurance plans
- long term savings plan
- fixed maturity plan
- monthly income advantage plan
- income tax calculator
- pension calculator
- bmi calculator
- compound interest calculator
- term insurance calculator
- income tax
- tax saving investment options
- best investment plans
- benefits of term insurance calculator
- what is term insurance
- why to invest in life insurance
- tax planning for salaried employees
- how to choose best child insurance plan
- tips for buying retirement plan
- 1 crore term insurance
- importance of saving
- short term saving plans
- types of investment in india
- investment declaration