Life Insurance cover is must for ULIP : IRDA

Insurance regulator Irda, , has reemphasized that insurers should offer assured life insurance cover with Ulips.
Reiterating its December 2005 order on Ulips, Irda in an order late Monday night said: "All Unit linked Insurance products (Ulips), including pension/annuity products must have a minimum assured sum payable on death."Irda, however, clarified that provision of death benefit will not be mandatory in case of unit linked products providing health insurance cover.
Ulips, it further said, cannot be used to obtain loans. "No loan shall be granted under Unit Linked Insurance Products."
Irda further said that minimum policy term would be five years in the case of individual products, while the group products would continue to be renewed annually.
Partial withdrawal from the policies, Irda said, would be allowed only after the fifth policy anniversary for all unit linked products, except pension or annuity products.
In the case of unit linked pension or annuity products, no partial withdrawal will be permitted and the insurer will be allowed to convert the accumulated fund value into an annuity only at maturity.
Every top-up premium will have a lock in period of three years from the date of payment of that top-up premium, it said, adding they will not be allowed during the last three years of the contract.
The revised norms, Irda said, will come into effect from 1 July, 2010.
It seems IRDA finally realized that without above conditions, ULIPS are just like Mutual Funds. It can't defend it's jurisdiction in the supreme court. ULIPS are neither a good investment product nor a good insurance product. From the returns perspective, ULIPS are not the best and so investors should stay away from them. In case you need life insurance cover then  go for term insurance that too online. In case you plan to exit Ulips before the completion of five years, then you shall be liable to pay tax on all the deductions claimed against the premium paid till the year of termination. You will also have to pay a high surrender charge.

0 comments:

Post a Comment

All comments are moderated. Please post no spam

Disclaimer & Privacy Policies

(c) Mrs. Ruby Christy. This site and contents are owned by Mrs. Ruby Christy;
Use of this website and/or services offered by us indicates your acceptance of our Disclaimer& Privacy Policies.

Information and opinions provided on this website (www.investchips.com) has been independently obtained from sources believed to be reliable. However, such information may include inaccuracies, errors or omissions. Investchips.com and its affiliates, information providers or content providers and R.John Christy and his Family shall have no liability to you or third parties for the accuracy, completeness, timeliness or correct sequencing of information available on this website or feeds, or for any decision made or action taken by you in reliance upon such information, or for the delay or interruption of such information. Investchips.com,its affiliates, information providers ,content providers and R. John Christy and his Family shall have no liability for investment decisions or other actions taken or made by you based on the information provided on this website. Any action you choose to take in the markets is totally your own responsibility. Investchips.com and R. John Christy and his Family will not be liable for any, direct or indirect, consequential or incidental damages or loss arising out of the use of this information. This information is neither an offer to sell nor solicitation to buy any of the securities mentioned herein. Opinions expressed by R. John Christy are his own and not of his past, present and future employers.
The DoubleClick DART cookie is used by Google in the ads served on this websites displaying AdSense for content ads. When users visit this website and either view or click on an ad, a cookie may be dropped on that end user's browser.
  • Google, as a third party vendor, uses cookies to serve ads on this site.
  • Google's use of the DART cookie enables it to serve ads to your users based on their visit to this site and other sites on the Internet.
  • Users may opt out of the use of the DART cookie by visiting the Google ad and content network privacy policy.
  • www.investchips.com never collects any personal information of visitors.