This is now followed by a notfication dated 12 July titled “IRDA (Treatment of Discontinued Linked Insurance Policies) Regulations ”. A summary of the . IRDA (Treatment of discontinued Unit Linked Policies) Regulations The lock-in period for ULIPs (and any rider issued with a ULIP) has been increased. In order to ensure fair treatment to the policyholder, IRDA has taken several single premium for the purpose of insurance cover Charges on ULIPs should be .

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Guidwlines has been put in place to ensure that the policy holder stays with the insurance policy for a longer period of time as the benefits for most investment products need some time before they start making money.

He is a strong proponent of online insurance and is often found pointlessly babbling about it! This guaranteed return is for policies in which all premiums have been paid. Link to IIB’s website.

The discontinuance charges have been capped both as percentage of fund value and premium and also in absolute value. Life and health cover can be extended to the policy as additional riders. These are by far the best part of the new guidelines. Critics had been shouting foul that ULIPs hardly offer any insurance cover for the amount of money that was being invested, hence making them more of a investment tool rather than a hybrid product which offers a healthy mix of both insurance and investment.

Unit Linked Products

Company Information About Us. Even then it is advisable to stay invested for at least 3 years to make good returns.

Increase In Risk Gidelines There are other tools like mutual funds which are much more efficient for short term investments. Do it only as the LAST resort! An exposure draft on this requirement is already circulated and responses are coming in. For Regular Premium policies — Sum assured should at least 5 times the annual premium or Rs. The Regulations stipulate that an insurer shall recover only the incurred acquisition costs in the event guixelines discontinuance of policy and that these charges are not excessive.


Gross yield means the returns that you would get before deducting any charges and net yield is the returns the policy generates after the charges are deducted.

The Regulations cast obligations on the referral company as well as the insurer including submission of data as and when called for by the Authority. Terms and Conditions for FY IRDA therefore initiated exposure drafts covering these areas and received considerable feedback from various stakeholders on the issues put forth.

Any payments which need to be made by the insurance irxa to the policy-holder on account of policy lapse, surrender or discontinuation would be made to the ghidelines only after the lock-in period of 5 irfa.

This has been changed to some extent. This rule makes it a rather attractive proposition for the policy-holder where he is not completely at the mercy of the markets. Motor Third Party Obligation. So, as the names suggests, your money is locked in.

All top-up premiums made during the policy term should have an insurance cover and would be treated as single premiums.

For Regular Premium policies — Sum assured should at least 10 times the annual premium. Upon discontinuance of a policy, a policyholder shall be entitled to exercise an option of either reviving the policy or completely withdrawing from the policy without any risk cover. The lock-in period is the time frame during which you cannot exit the insurance policy due to any circumstances. Any premium paid over and above the pre-decided annual guivelines is top-up premium.

The entire top-up amount used to go into guidelunes investment component and would not result in any increase in irfa amount of mortality cover that would be provided to the insured.

From the 1st of September only plans which meet the new norms guidelinws be sold by insurance companies. ULIPs norms changed and changed for guidekines better. Companies which wish to share their database of customers with insurers would need to get approval from IRDA after having conformed to the requirements as laid down in the Regulations.

In case of whole life contracts, term T shall be taken as 70 minus age at entry. Difference between Gross Yield and Net Yield.

Further, there are restrictions on the business activities of the referral company to ensure that there is no misuse of the system. The Consumer Affairs department goes beyond facilitation and works towards taking grievances to their logical end by calling for explanations irdda required, carrying out enquiries and inspections etc.


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New ULIP Guidelines – Change in ULIP norms for all life insurance companies

But insurance companies might find this a tough pill to swallow and would be very careful before launching ULIP pension products because of this clause. Even Distribution of Charges: The handling of charges was the most controversial of all things related to ULIPs.

Regular Premium RP contracts: Further, all unit linked products, other than pension and annuity products shall provide a mortality cover or a health cover thereby increasing the risk cover component in such products. All ULIPs guidekines have an increased death cover mortality or health cover depending on the type of policy.

IRDA – Unit Linked Products

At no time the annual health cover shall be less than percent of the total premiums paid. Programmes to advance understanding of RTI. This is a great improvement to have in the ULIP category and makes it a better hybrid product with a good component of insurance to go along with the investment component. During this 5 year period no payments can be made to the customer on account of policy lapsation, surrender or discontinuation.

This will protect the life time savings for the pensioners, from any adverse fluctuations at the time of maturity. The mortality rates were half of the new regulations which were considered to be too low by a lot many.

This rate may be changed by IRDA though from time to time. The prospect guide,ines required to sign on the illustration while guidelimes the proposal form. With a view to smoothening the cap on charges, the capping been rationalized to ensure that the difference in yield is capped from the 5 th year onwards.