INSUBCONTINENT EXCLUSIVE:
Mumbai: The insurance regulator is set to revamp rules governing Ulip schemes for the first time in seven years as it tries to improve the
The regulator, Insurance Regulatory Development Authority of India (Irdai), is likely to tweak Ulips, pension plans and traditional products
It is likely to relax norms on buying annuity after the accumulation phase, do away with minimum capital guarantee, and allow partial
withdrawal on pension plans
Similarly, insurers can be allowed to charge extra premium for buying riders with Ulips
Irdai has constituted a working group to consider the recommendations of stakeholders and the Committee on Review of Product Regulations -
identified.
At present, units are deducted from Ulips if one buys riders with it
Insurance companies offer various riders with Ulips such as critical illness and unit deduction is optional
In what would revive the pension insurance space, the regulator is likely to relax norms on buying annuity after the accumulation phase
Also, like other pension products including the PPF, partial withdrawal could be allowed for reasons such as illnesses, child marriage,
education in insurance pension plans as well
Minimum capital guarantee would be made optional
Today, companies have to invest heavily in debt to offer minimum guarantee
On traditional products, the surrender value at present is paid on 10-year plan premium paying term if the policyholder has paid a minimum
of two years, and for products above 10 years premium paying term, if one has paid for premium for three years.
The regulator has proposed
to guarantee surrender value irrespective of the premium paying term if the policyholder has paid a minimum of two premiums
The last changes were introduced in 2010
Earlier, Ulips were front loaded in terms of charges.
