Step-by-Step Process to Withdraw Your ULIP in 2025

When you start a ULIP (Unit Linked Insurance Plan), you do this to grow your wealth while staying protected. You may need quick access to your money for an emergency, a wedding or higher education. This is when a ULIP partial withdrawal will be helpful. 

Let’s understand how it works so that you can make confident choices about your money. 

What are the steps to withdraw money from ULIP policy

The process is simple for withdrawing money from your ULIP. Here are the steps that you have to follow to make sure your request is smooth. 

Check your lock-in period

Start by confirming whether your ULIP has completed the five-year lock-in period. If it is still active, only specific withdrawals, like for medical emergencies, might be allowed.

Know your fund value

Log in to your insurer’s portal or check your latest statement to see your current fund value. This helps you decide how much to withdraw without hurting your investment goals.

Submit a withdrawal request

Fill out the ULIP withdrawal form either online or at the nearest branch. Make sure you enter the correct amount and policy details to avoid delays.

Provide KYC Document 

Attach your ID proof, address proof, and policy number for verification. These documents are needed to confirm you are the rightful policyholder.

Wait for Processing 

Once the request is approved, your insurer will process the transaction. The money is usually credited to your bank account within a few working days.

Different Types of ULIP Withdrawals 

There are two ways that you can withdraw money out from a ULIP Policy. Each of these works differently based on your policy status. 

ULIP Withdrawal Before the 5-Year Lock-In Period

If your ULIP is still under the lock-in period, withdrawals are allowed only in special situations. Some insurers permit ULIP partial withdrawal for medical emergencies or education.

Points to note:

• The insurer may deduct charges before paying the amount.
• The life cover may reduce after withdrawal.
• The remaining money stays invested until the lock-in period ends. Because ULIPs are designed for long-term savings, early withdrawal affects your returns.

ULIP Withdrawal After a 5-Year Lock-in Period 

After the five-year period is over, you have more flexibility. You can take a ULIP partial withdrawal up to a limit set by your insurer.

What to keep in mind:

• You can withdraw a certain percentage of your fund value each year.
• Many insurers allow at least one free withdrawal per year.
• Your remaining fund continues to stay invested and grow. This is a smart way to manage money while still staying insured.

How to use the SIP calculator for ULIP Withdrawals? 

A SIP calculator is helpful when you are planning a withdrawal. It shows how much your remaining investment can grow over time.

Here is how to use it:

• Enter your current fund value in the calculator and make sure it matches the amount shown in your latest ULIP statement. This gives you an accurate base to work with.
• Choose an estimated return rate and the number of years you plan to stay invested. Picking a realistic return rate helps you get a clear picture of your potential growth.
• The calculator will then display your future value, showing you how much your investment could be worth at the end of the chosen period.
• With this information, you can decide how much to withdraw now while keeping enough money invested to meet your long-term financial plans.

Impact of ULIP Withdrawals on Life Coverage 

Your life cover is linked to your fund value, so when you make a ULIP partial withdrawal, it may change and affect the protection you have.

• The sum assured may reduce after a withdrawal, which means your family could receive a lower payout in case of a claim.
• Some insurers keep the original cover but adjust your future premiums to maintain the benefit.
• Your nominee will still get the payout, but too many withdrawals can reduce the fund value and bring down the final amount received.

Restrictions and Rules for ULIP Withdrawals

Insurance companies follow specific rules for ULIP withdrawals. These keep the plan working as a mix of insurance and investment.

Here are common restrictions:

• Most insurers allow withdrawals only after five years unless there is an emergency.
• There is a limit on how much you can withdraw each year. Usually, it is 10 to 20 percent of the fund value.
• You cannot withdraw the entire amount unless you are surrendering the policy.
• There might be a gap between two withdrawals, usually six months or one year. When you know these rules, you can plan your withdrawals better.

Important Considerations Before Making a ULIP withdrawal 

Before taking money out of your ULIP, think about these points carefully so you do not affect your financial plans.

Future Goals

 Withdrawing a large amount today might leave your fund too small to meet big goals like buying a house, paying for education, or retirement. Always check how the withdrawal will impact your long-term savings.

Charges 

While some insurers offer free withdrawals, others may deduct charges after a certain number of requests. Always check these charges as they can reduce the amount you receive.

Tax Impact 

ULIP withdrawals are often tax-free under Section 10(10D) if conditions are met. It is better to confirm with your insurer or a tax expert so you do not face unexpected tax liabilities.

Life Cover 

Taking out money from your ULIP may reduce your sum assured, which means lower financial protection for your family. This is important to check before making any withdrawal.

Make Smart Choices for Your ULIP Withdrawal

ULIP withdrawals are not as complex as they seem. Once you know the steps, the rules, and the impact on your coverage, you are in control of your money. Shri Ram Life Insurance is ready to guide you at every stage, making sure your financial security stays strong.

Thinking of taking a ULIP partial withdrawal today? Speak with our experts and plan it wisely so that your future goals stay on track.

Disclaimer: The information provided is intended for general informational purposes only. For personalised recommendations, please consult a certified insurance professional.

ARN:SLIC/Elec/Sep 2025/1164