In a new development, IRDA has issued guidelines on unit-linked insurance products (ULIP).
The new guidelines are to apply to all ULIPs from July 1, 2010.
All ULIPs are expected to have an insurance cover payable on death. The regulator stated that pension/annuity products must have insurance cover. And the minimum policy term for ULIPs is to be five years.
No loans are to be granted under ULIPs.
A partial withdrawal in ULIPs will be allowed only after the fifth year of policy.
On partial withdrawals of ULIPs, IRDA stated that “Partial withdrawal is allowed only after fifth policy anniversary for all unit linked products except pension/annuity products. In the case of unit linked pension / annuity products, no partial withdrawal shall be allowed and the insurer shall convert the accumulated fund value into an annuity at maturity.”
A Giridhar, Executive Director, IRDA, said: "The new ULIP norms are based on the insurer's FY10 financials and are aimed at making insurers adhere to the regulations."
These guidelines were issued by the IRDA based on the insurance related data as on year ending March 31, 2010, and as a continuation of the ULIP guidelines “Guidelines on Unit Linked Products”, which had issued on December 21, 2005.
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