NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Life Insurance Products
Rohit, aged 35, buys a regular-premium unit linked insurance plan (ULIP). Which statement about the lock-in period of this ULIP is correct?
A ULIP has a lock-in period of 5 years under IRDAI regulations. During this time the policyholder cannot make partial withdrawals, and surrender proceeds are payable only after the lock-in ends, which makes ULIPs a medium to long-term product.
- AThere is no lock-in period for ULIPs
- BThe lock-in period is 5 yearsCorrect
- CThe lock-in period is 1 year
- DThe lock-in period is 10 years
Explanation
Under IRDAI rules, ULIPs carry a minimum lock-in period of 5 years, during which units cannot be withdrawn. Partial withdrawals are permitted only after this period. A 1-year lock-in is not the rule for ULIPs.
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