Call Us

FOR EXISTING POLICY

Have query on premium, payout or any servicing need?

Call us:

1 860 266 9966

Monday - Saturday | 10 am - 7 pm IST

Call charges apply

Dedicated NRI Helpdesk:

+91 22 6251 9966

Monday - Saturday | 10 am - 7 pm IST

Call charges apply

FOR NEW POLICY

Want to buy a new policy online?

Call us:

+91 22 6984 9300

Give missed call for a call back:

+91 11 6615 8748

Monday - Sunday | 8 am - 11 pm IST


Exclusively for NRIs:

Call us:

Give missed call for a call back:

+91 11 4473 0242

Monday – Sunday | 9 am – 9 pm IST

Language

Need assistance in choosing the right insurance plan? Get a call from our Expert.

Need assistance in choosing the right insurance plan?Get a call from our Expert.

+91 dropdown arrow

Select Plan dropdown arrow
  • Term plans
  • Saving plans
  • Wealth plans
  • Retirement plans
  • I don't know/I need help

TATA AIA Life Insurance Co. Ltd will send you updates on your policy, new products & services, insurance solutions or related information. Select here to opt-in. T&C apply.

Don't Stop Paying Your ULIP Premiums Before 3 Years: Here's Why

Investments in ULIP Plans are made to create wealth based on market-linked returns. And it is invested for the long term to ensure maximum benefits. However, for various reasons, we default from staying invested in some scenarios. 
 

Stopping to pay premiums for your ULIP insurance before 3 years can significantly impact your investments and your future financial goals. Here is why you should continue paying your ULIP premium at least for the first 3 years.
 

Before we get started, let us understand what the ULIP policy means and the associated lock-in period.

What is the Unit Linked Insurance Plan (ULIP Plan)?

The ULIP plan is a comprehensive life insurance policy that utilises one portion of the premium for the life cover and the other in the financial securities for the market-linked returns. It is a flexible product that allows you to choose and invest in fund options based on your risk appetite. 
 

The ULIP insurance plan has a lock-in period of 5 years. After the 5-year lock-in period, partial withdrawals are allowed.

What happens if you Stop Paying Premiums before 3 years for the ULIP Plan?

 

If you stop paying the premium before 3 years, you may face the following consequences.
 

  • Discontinued Fund

    If you have not paid the premiums for the ULIP investment, you will receive a grace period of about 30 days. If the premiums still remain unpaid, the fund value, minus the applicable discontinuance charges, will be credited to a discontinued fund. The ULIP plan will remain invested in the discontinued policy fund. However, the life cover and the add-on rider# will cease to provide the applicable benefits.
     

    The proceeds of the discontinued policy fund, the fund value as of the date of discontinuance plus the income earned after the deduction of the applicable fund management charges will be provided to you based on your decisions considering the revival period (explained in the following paragraph). In addition, there will be a minimum guarantee of interest as prescribed by the IRDAI. 
     

  • Revival Period

    The discontinued policies will be provided with a revival period of 3 years from the first date of the unpaid premium. The details regarding the revival period will be communicated to you within 3 months from the first date of the unpaid premium. You can choose to revive the ULIP policy during these 3 years and continue to benefit from the policy.
     

    There are 3 possible scenarios concerning the revival period.
     

    1. Not reviving within the revival period - Suppose you opt to revive the policy but do not revive it during the revival period. In that case, the proceeds from the discontinued policy fund will be provided to you when the revival period or the lock-in period ends, whichever is later. Therefore, fund management charges will apply to the discontinued fund during this period. 

    2. Not reviving the ULIP Policy - Suppose you don't revive it during the revival period and do not intend to do it later, the policy will remain invested in the discontinued fund, and the proceeds will be paid to you at the end of the lock-in period, and the policy shall terminate.

    3. Surrendering the ULIP Plan - You can also choose to surrender the ULIP insurance policy at any time, and the proceeds from the discontinued policy will be provided when the lock-in period ends or on the surrender date, whichever is later.
       

  • Single Premium ULIP Plan

    If you have purchased the single premium ULIP plan and wish to discontinue within 3 years, you can surrender it at any time. However, the fund value will be credited to the discontinued fund and remain invested. The proceeds will be paid when the lock-in period ends. 

Why should you not Discontinue your ULIP Policy in 3 Years?

Here are a few reasons, in addition to the ones we mentioned before, why you should not discontinue your ULIP plan.
 

  1. Your investment will be credited to a discontinued policy fund, and the fund management charges will be applicable.

  2. The proceeds from the discontinued policy fund will be provided when the revival period or the lock-in period ends, whichever is applicable.

ULIP Insurance Benefits in the Long Term

It is always highly recommended that you invest in a ULIP policy for the long term. When you invest in the ULIP plan for the long term, you can benefit in the following ways:
 

  1. The investment made in financial securities may significantly appreciate in the long term.

  2. You can choose the fund option and switch between the options during the policy term in a ULIP plan and customise it based on your requirements.

  3. The premium paid and the applicable maturity benefits will qualify for the tax* deduction and tax* exemption benefits under Section 80C and Section 10(10D) of the Income Tax Act, 1961.
     

Therefore, for any reason, if you decide to refrain from paying the premium for the long-term investment plans, such as the ULIP policy, within 3 years, you will lose the applicable benefits. You will still be invested with the applicable charges and not receive the funds until the revival period or the lock-in period, whichever is applicable. 
 

Tata AIA Life Insurance Plans provide a wide range of customisable plan options that help you compare, choose, and customise the policy based on your specific need. 
 

You can utilise our Tata AIA ULIP Calculator to make a well-informed decision and buy the best ULIP plan as per your specific requirements.

Conclusion

The ULIP plans have a lock-in period of 5 years. If you stop paying the premiums within the first three years, the fund value will be credited to a discontinued policy fund. However, a revival period of 3 years will be provided to the investor, but the fund management charges will remain applicable during this period. Based on your decision during the revival period, the policy will either be terminated or revived, while the proceeds will be paid when the revival period or the lock-in period ends as applicable. Therefore, staying invested in the ULIP policy long term is essential to ascertain maximum benefits based on the investment.

 

Get 1 Crore Life Cover + 7% Digital Discount on Year 1 Premium

+91 dropdown arrow
  • +93 Afghanistan

TATA AIA Life Insurance Co. Ltd will send you updates on your policy, new products & services, insurance solutions or related information. Select here to opt-in.


 

Looking to buy a new insurance plan?

Our experts are happy to help you!

+91

Select plan
  • Term plans
  • Saving plans
  • Retirement plans
  • Wealth plans
  • I don't know/I need help

TATA AIA Life Insurance Co. Ltd will send you updates on your policy, new products & services, insurance solutions or related information. Select here to opt-in

People Like You Also Read

How to Cancel a Life Insurance Policy
Read More
Where Should I Save to Get Guaranteed Monthly Income?
Read More
Advantages of Group Term Life Insurance - Get the Best Coverage
Read More
3 Types of People Who Must Buy Term Plan with Return of Premium | Tata AIA
Read More
A Complete Guide to ULIP Charges: Everything You Need to Know
Read More
How ULIP Plan Works - Know The Features and Benefits
Read More
6 Financial Flexibility Benefits of Unit Linked Insurance Plans (ULIPs)
Read More
Child Investment Plans in India 2024 | Tata AIA
Read More

People Like You Also Read

How to Cancel a Life Insurance Policy
Read More
Where Should I Save to Get Guaranteed Monthly Income?
Read More
Advantages of Group Term Life Insurance - Get the Best Coverage
Read More
3 Types of People Who Must Buy Term Plan with Return of Premium | Tata AIA
Read More
A Complete Guide to ULIP Charges: Everything You Need to Know
Read More
How ULIP Plan Works - Know The Features and Benefits
Read More
6 Financial Flexibility Benefits of Unit Linked Insurance Plans (ULIPs)
Read More
Child Investment Plans in India 2024 | Tata AIA
Read More
Website Logo Image Icon

Tata AIA Life Insurance

A joint venture between Tata Sons Pvt. Ltd. and AIA Group Ltd. (AIA),  Tata AIA Life Insurance  is one of the leading life insurance providers in India. We post everything you need to know about life insurance, tax savings and a variety of lateral topics such as savings and investments in this space. You can access and read a host of different blogs, articles and pages at the Tata AIA Life Insurance Knowledge Center or get in touch with us with any queries or questions!

View all posts by Tata AIA Life Insurance

Frequently Asked Questions

What is the revival period provided for the ULIP policy?

The revival period is 3 years from the first date of not paying the premium.

Can I surrender my ULIP policy within 3 years of purchasing the ULIP policy?

Yes, you can surrender a ULIP policy within 3 years. However, the fund value will be credited to a discontinued policy fund, and the proceeds will be paid when the lock-in period ends or on the date of surrender, whichever is later.

Disclaimers

  •  Insurance cover is available under the product.

  • The products are underwritten by Tata AIA Life Insurance Company Ltd.

  • The plans are not a guaranteed issuance plan, and it will be subject to Company’s underwriting and acceptance.

  • For more details on risk factors, terms and conditions please read sales brochure carefully before concluding a sale.

  • This blog is for information and illustrative purposes only and does not purport to any financial or investment services and do not offer or form part of any offer or recommendation. The information is not and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.

  • Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company.

  • Every effort is made to ensure that all information contained in this blog is accurate at the date of publication, however, the Tata AIA Life shall not have any liability for any damages of any kind (including but not limited to errors and omissions) whatsoever relating to this material.

  • *Tax: Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfilment of conditions stipulated therein. Income Tax laws are subject to change from time to time. Tata AIA Life Insurance Company Ltd. does not assume responsibility on tax implications mentioned anywhere in this document. Please consult your own tax consultant to know the tax benefits available to you.

  • 1ULIP:

    • IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER

    • THE LINKED INSURANCE PRODUCT DO NOT OFFER ANY LIQUIDITY DURING THE FIRST FIVE YEARS OF THE CONTRACT. THE POLICY HOLDER WILL NOT BE ABLE TO SURRENDER/WITHDRAW THE MONIES INVESTED IN LINKED INSURANCE PRODUCTS COMPLETELY OR PARTIALLY TILL THE END OF THE FIFTH YEAR.

    • Past performance is not indicative of future performance.

    • All investments made by the Company are subject to market risks. The Company does not guarantee any assured returns. The investment income and price may go down as well as up depending on several factors influencing the market.

    • Please make your own independent decision after consulting your financial or other professional advisor.

  • #Riders are not mandatory and are available for a nominal extra cost. For more details on the benefits, premiums and exclusions under the riders please refer to the Rider Brochure or contact our Insurance Advisor or visit our nearest branch office