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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Do it only as the LAST resort! The prospect was required to sign on the illustration while signing the proposal form. This has been changed to some extent. Any payments which need to be made by the insurance company to the policy-holder on account of policy lapse, surrender or discontinuation would be made to the policy-holder only after the lock-in period of 5 years.

Historically it has been proven that a longer investment horizon increases the chance of better returns when invested in the markets.

Further, keeping in view the need for ulpi functioning of the insurance sector for protecting the interests of policyholders, it is necessary to have reliable, timely and accurate data relating to insurance. At no time the annual health cover shall be less than percent of the total premiums paid.

Mention must be made of what is perhaps the most important step that the Authority has taken keeping in view the interests of policyholders. The entire top-up amount used to go into the investment component and would not result in any increase in the amount of mortality cover that would be provided to the insured. This will not only reduce the overall charges on these products, but also smoothen the charge structure for the policyholder.


Good luck on that front! This is a step in the correct direction as insurance should be as a tool for long term investment. Quarterly Supplements to Journal.

This is in line with the usage of ULIPs as a long term investment tool. All ULIPs other than single premium products will have a minimum premium paying term of 5 years.

So go in for a ULIP, only if you have a minimum 5 year horizon — if possible till the end of the policy term. Minimum annual health cover for age at entry of 45 years and above. List of Guiselines Aggregators.

IRDA – Unit Linked Products

During this 5 year period no payments can be made to the customer on account of policy lapsation, surrender or discontinuation. ULIPs norms changed and changed for the better. 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.

There have been quite a few favourable changes that have been introduced in the selling of Unit Linked Insurance Plans. The issues were then presented to and discussed with the members fuidelines the Insurance Advisory Committee as well as the members of the Board of the Authority.

For Regular Premium policies — Sum assured should at least 5 times the annual premium or Rs. Insurance is the subject matter of solicitation. List of Reinsurance Branches. This measure will reduce the expenses of the insurer, thereby lowering premiums to be paid by the policyholder. These are by far the guivelines part of the new guidelines.

The handling of charges was the most controversial of all things related to ULIPs.

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. This rule makes it a rather attractive proposition for the policy-holder where he is not completely at the mercy of the markets.


Minimum annual health cover for age at entry of below 45 years. So all new ULIPs will now have a minimum term of 5 years. For Regular Premium policies — Sum assured should at least 10 times the annual premium. They are as follows: In effect the policy-holder is expected to continue paying premiums for at least 5 years from the start of the policy.

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Unit Linked Products

IRDA has, from time to time, taken various initiatives for protecting the interests of gidelines by bringing out Regulations, Guidelines, Circulars etc applicable to insurers guideelines intermediaries covering the various stages in the lifecycle of an insurance product, commencing from solicitation, sale, policy servicing, to claims servicing and grievance redressal.

IRDA has increased the lock-in period for all Unit Linked Products from three years to five years, including top-up premiums, thereby making them long term financial instruments which basically provide risk protection.

IGMS will not only help monitor the redress systems of insurers but also create a gateway for policyholders to register complaints with insurance companies first and if need be escalate them to the IRDA Grievance Cells. All limited premium unit linked insurance products, other than single premium products shall have premium paying term of at least five years.

The Regulations also clearly define the Grace Period for different modes of premium payment.