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NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Life Insurance Products

In a unit-linked insurance plan (ULIP), which statement about the lock-in period under the IRDAI framework is correct?

ULIPs have a minimum lock-in of five years, during which units cannot be redeemed through partial withdrawal. Exceptions exist, such as death benefit payment. The lock-in applies to the fund value, not just to charges, so withdrawals from day one or after three years are not permitted.

  1. APartial withdrawals are allowed at any time from day one
  2. BThe policy must be surrendered after 3 years
  3. CUnits cannot be redeemed during the minimum lock-in of 5 years, subject to the permitted exceptions such as deathCorrect
  4. DThe lock-in applies only to the mortality charge portion

Explanation

ULIPs carry a minimum five-year lock-in, during which partial withdrawals are not allowed. Death benefits are payable in the usual way. The 3-year idea belongs to older rules or other products, and the lock-in applies to the fund value.

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