Most investment insurance (UL) policies have a validity period of five years or more. Adhil Shetty, CEO of Bankbazaar.com, notes: “UL has a validity period of five years, during which partial or full withdrawals are generally not allowed. After this period, you can withdraw the full or partial amount, provided you have paid all premiums for the first five years of the policy. During the validity period, policyholders cannot withdraw their funds, but they can switch between different fund options offered under the UL.”
What is a lockout period?
The lockout period in life insurance refers to a specified period during which the policyholder cannot withdraw funds transferred to the insurer without paying penalties or losing benefits. This period is set by the insurance company and is required for some types of life insurance policies, such as investment life insurance (UL) and some life insurance plans and retirement annuities.
Fines
If the policyholder decides to terminate the contract with the insurance company during the lockout period, they may face penalties. The surrender value the policyholder receives when the policy is terminated is usually lower than the premiums paid.
Therefore, it is important to carefully study the lockout period and other conditions before purchasing a policy; this will help avoid confusion and frustration.
Source: https://www.financialexpress.com/money/insurance-mind-the-lock-in-period-in-your-ulip-3525360/
Photos are from open sources.
