Taking extra caution, insurance regulator, Insurance Regulatory & Development Authority (Irda) based upon the insurance related data as of year ending March 31,2010 and related discussions, has issued clarifications on guidelines on unit linked products (Ulips).
All life insurers are advised that only the Ulips, which conform to these revised guidelines, shall be permitted to offer sale from July 1.
IRDA has reiterated that in case of individual products, the minimum policy term shall be five years and group products will continue to be on annually renewable basis. All linked products including pension / annuity products must have a minimum sum assured payable on death.
In case of unit-linked products providing health insurance cover, the provision of death benefit is not mandatory. In addition, no loan shall be granted under Ulips
IRDA has said partial withdrawal is allowed only after fifth policy anniversary for all Ulips except pension/annuity products. In case of unit linked pension/annuity products, no partial withdrawal shall be allowed and the insurer will convert the accumulated fund value into an annuity at maturity.
However, the insured will have the option to commute up to a maximum of one-third of the accumulated value as lump sum at the time of maturity. In the case of surrender, only up to a maximum of one-third of the surrender, value could be availed in lump sum and the remaining amount must be used to purchase an annuity.
Every top-up premium shall have a lock in period of three years from the date of payment of that top up premium. However, top-ups are not allowed during the last three years of the contract.
All life insurers are advised that only the Ulips, which conform to these revised guidelines, shall be permitted to offer sale from July 1.
IRDA has reiterated that in case of individual products, the minimum policy term shall be five years and group products will continue to be on annually renewable basis. All linked products including pension / annuity products must have a minimum sum assured payable on death.
In case of unit-linked products providing health insurance cover, the provision of death benefit is not mandatory. In addition, no loan shall be granted under Ulips
IRDA has said partial withdrawal is allowed only after fifth policy anniversary for all Ulips except pension/annuity products. In case of unit linked pension/annuity products, no partial withdrawal shall be allowed and the insurer will convert the accumulated fund value into an annuity at maturity.
However, the insured will have the option to commute up to a maximum of one-third of the accumulated value as lump sum at the time of maturity. In the case of surrender, only up to a maximum of one-third of the surrender, value could be availed in lump sum and the remaining amount must be used to purchase an annuity.
Every top-up premium shall have a lock in period of three years from the date of payment of that top up premium. However, top-ups are not allowed during the last three years of the contract.
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