Discontinuation Rules for ULIPs


ULIP is a marathon and not a 100 meters race!


ULIP rules A Unit Linked Insurance Policy (ULIP) is a long term instrument for risk protection with a lock-in period of 5 years.


  • Do you know that if you do not pay your premiums on time, your policy  stands discontinued? You must keep your policy alive by paying premium on time.
  • Do you know that if your policy is discontinued you have an option of reviving it or completely withdrawing from it? If you don’t exercise the option within 30 days. it would be deemed that you are withdrawing from the policy.
  • Do you know what you will get when you discontinue your policy? If you discontinue your policy, the proceeds of the discontinued policy will be given to you on completion of five years and you earn an interest rate of 3.50% on the fund from the date of discontinuance.
  • Have you ascertained the charges levied for discontinuance of your policy? Ask for details of the Discontinuance charges.


Remember that if you don’t pay premium every year for 5 years, there will be a Discontinuance Charge. This charge will not apply to single premium policies.


You may contact IRDA call centre at 155255 if your grievance has not been attended to by the insurance company or may approach insurance ombudsman, if applicable. For further more information visit or


*This is a part of the IRDA’s public awareness initiative.


Read more useful articles on Insurance and use the insurance calculator to find out how much insurance do you need.

Published Jan 30 2011



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