Balaram purchased a Unit Linked Insurance Policy on 1st March, 2015 from ABC Insurance Company. The policy includes both term insurance coverage and estimated investment returns. He took the policy for tax deduction purp

CS Professional · Insurance - Law & Practice · PYQS · December 2022
Balaram purchased a Unit Linked Insurance Policy on 1st March, 2015 from ABC Insurance Company. The policy includes both term insurance coverage and estimated investment returns. He took the policy for tax deduction purpose under Sec. 80C of the Income Tax Act, 1961. In January, 2017, his financial advisor suggested him an annuity plan which comes under Sec. 80CCC of the Income Tax Act, 1961. Balaram is totally convinced with the annuity plan and wants to discontinue the Unit Linked Insurance Policy as paying premiums for both the plans is difficult for him. He approached the insurance company to claim the fund value from the premiums he had paid from March, 2015 to January, 2017. Can he get the fund value immediately? Justify the answer with the latest ULIP regulations of IRDA.

Answer & Explanation:

No, Mr. Balaram cannot get the fund value immediately because there is a lock in period of 5 years under a ULIP Policy from the commencement of the policy, during which the investments cannot be withdrawn. Mr. Balaram has taken the ULIP policy on 1st March, 2015 and wants to discontinue the ULIP policy in January, 2017 i.e. before 5 years from the commencement of the policy, he will not be entitled for fund value.

Topics: Life Insurance

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