Insurance Regulatory and Development Authority of India (IRDAI) is an autonomous apex statutory body headquarters at Hyderabad, Telangana.

It regulates and develops the insurance industry in India.

It was constituted by a Parliament of India act called Insurance Regulatory and Development Authority Act, 1999

Changes in Unit Linked Insurance Products (ULIPs)

ULIP Structure Related Changes-

Lock in period increased to five years:

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

Minimum Premium Paying Term Of Five Years:

All limited premium unit linked insurance products, other than single premium products shall have premium paying term of at least five years.

Level Paying Premiums:

All regular premium /limited premium ULIPs shall have uniform/level paying premiums.

Even Distribution of Charges:

Charges are mandated to be evenly distributed during the lock in period, to ensure that high front ending of expenses is eliminated.

Increase In Risk Component:

All unit linked products, other than pension and annuity products shall provide a mortality cover or a health cover thereby increasing the risk cover component in such products.

The minimum mortality cover should be as follows:

Minimum Sum assured for age at entry of below 45 years-

Single Premium (SP) contracts: 125 percent of single premium.

Regular Premium (RP) including limited premium paying (LPP) contracts: 10 times the annualized premiums or (0.5 X T X annualized premium) whichever is higher. At no time the death benefit shall be less than 105 percent of the total premiums (including top-ups) paid.

Minimum Sum assured for age at entry of 45 years and above-

Single Premium (SP) contracts: 110 percent of single premium

Regular Premium (RP) including limited premium paying (LPP) contracts: 7 times the annualized premiums or (0.25 X T X annualized premium) whichever is higher. At no time the death benefit shall be less than 105 percent of the total premiums (including top-ups) paid.

For more details here is the attachment

Attached Files

IRDA Unit Linked Insurance Products (ULIPs.doc (38.5 KB, 57 views)