Are you wondering whether you can withdraw funds from your Kotak e-Invest plan before maturity? Read through the guide to know the details about ULIPs and withdrawals.
If you invest in Kotak e-Invest Plan, then you will be able to choose ULIP as a reliable tool for long-term investment. ULIP comes with a five-year lock-in period. But you can opt for a partial withdrawal before that. Let’s get into the details about ULIPs and withdrawals.
Can You Cancel ULIPs Before the Lock-in Period?
Even though there’s a five-year lock-in period for ULIPs, you can cancel them beforehand. The money does not get paid to the policyholder before the lock-in period. The amount paid after five years won’t be the fund’s original value on the day of the surrender.
The remaining ULIP fund value is transferred to the Discounted Policy fund after discontinuation charges are deducted. A fund management charge of around 0.5% of the fund’s value gets paid around this time. The fund also generates 4% interest every year and guarantees a minimum return.
Can You Cancel ULIPs After the Lock-In Period?
If you cancel your ULIP after the lock-in period, then you won’t have to bear any charges. But it’s prudent not to cancel it as a long-term investment of 15 to 20 years can help you gain returns from market regularisation. It also distributes fund management, administrative, mortality, and other charges throughout the policy’s tenure.
Unit cancellation or market value reduction is used to meet the involved expenses. Due to heavy deductions during the initial years, the investment is lower in the later years. Therefore, abandoning the fund after the lock-in period will minimise the investment value of the ULIP fund performance.
Can you Revive a Cancelled ULIP Plan?
Have you cancelled your ULIP plan earlier but changed your mind later? Even if you cancel your ULIP before the lock-in period, you can revive it later. But you will have to take the initiative to activate your ULIP before the completion of two years of surrender.
Several people are worried about the cancellation charges they had to bear earlier. The cancellation charges get returned to the DP fund the moment you reactivate your ULIP policy. Therefore, your outstanding ULIP premium and other associated charges get deducted.
Partial Withdrawal
The amount secured for your ULIP plan is repaid to its original value after 24 months in case of a partial withdrawal. If the funds get withdrawn before at least two years of the policyholder’s death, then the death benefits get reduced. Any partial withdrawal after the age of 60 gets deducted from the death benefit.
To Conclude
ULIPs have replaced conventional insurance policies in recent times. The ease of policy surrender and partial withdrawal makes it even more attractive. It is great for managing finances during an unexpected emergency without having to incur a major loss.
Click here to know more about Kotak Life ULIP Plan: https://www.kotaklife.com/online-plans/ulip-plan
