What Is Partial Withdrawal in ULIP?

When Can You Withdraw Money from Your ULIP Account?

What Are the Limits on ULIP Partial Withdrawal?

What Are the Effects of Partial Withdrawal in ULIP?

What Are the Things to Keep in Mind When Making Partial Withdrawals?

FAQs on Partial Withdrawal in ULIP

Do you have to pay additional tax when partially withdrawing money from your ULIP account?

According to Section 10(10D) of the Income Tax Act, you will not have to pay any additional tax during partial withdrawals. However, you should note that there are some criteria that you should fulfil to stand eligible for the exemption.

How many intervals between two consecutive withdrawals are mandatory?

Maintaining a gap of at least three months between two consecutive withdrawals is imperative. However, you should ideally maintain a gap of two years or more to ensure the previous withdrawal recovers before applying for a new one.

Who is eligible for partial withdrawals in ULIPs?

The policyholder must be at least 18 to make partial withdrawals in ULIP. Furthermore, completion of 5 years after the policy purchase is mandatory for you to be able to withdraw before maturity.

What are the effects on the sum assured after partial withdrawal if the policyholder's age is beyond 60 years?

When the policyholder's age extends beyond 60, there is a permanent decrease in the sum assured. This reduction is proportional to the premature withdrawals made during the policy tenure.

What are the partial withdrawal rules in case of top-ups?

If you have made a top-up on your policy amount and are making a partial withdrawal, the insurer will deduct it from that extra investment. However, if the top-up amount does not complete in 5 years, you cannot extract money from it.

Is there any restriction on the amount for partial withdrawals?

Yes, there is a restriction on the amount for partial withdrawals. The minimum and maximum amounts for partial withdrawal vary with policy terms and insurance providers. However, this value usually ranges between 10% and 20% of the sum assured paid, depending on the insurer.