Press Esc to close
Wednesday 01 October 2014
News updated at 3:37 PM IST
Weather
Max: 29.3°C
Min : 21.4°C
In Bangalore
Sunny day

Irda raises lock-in period for Ulips to five years

Last updated: 28 June, 2010
Bangalore, June 28, DHNS:

In an effort to protect investors in life insurance, Insurance Regulatory & Development Authority (Irda) of India, on Monday, raised the lock-in period for Unit Linked Insurance Plan (Ulip) to five years from 3 years.

In a late evening circular, Irda said it has increased the lock-in period for all Ulip products from three years to five years, including top-up premiums, thereby making them long term financial instruments which basically provide risk protection.

Irda also said all regular premium / limited premium Ulips shall have uniform and level paying premiums. Which means that any additional payments shall be treated as single premium and they will have to have insurance cover. All limited premium unit linked insurance products, other than single premium products, shall have premium paying term of at least 5 years. It made it mandatory that the insurers shall distribute the overall charges, in Ulips in an even fashion during the lock-in period.

To make sure that all unit linked products, other than pension and annuity products, provide a minimum mortality cover or a health cover, Irda specified that the  minimum mortality cover should be at least 125 per cent of single premium for age at entry below 45 years and 110 per cent of single premium above 45 years. In case of regular premium contract the mortality cover should be 5 times the annualised premiums or Rs 100,000 per annum whichever is higher for entry age up to 45 and for entry age above 45  it should be 5 times the annualised premiums or Rs 75,000 per annum whichever is higher.


Irda has also specified that in case of the accumulated fund value of unit linked pension/annuity products a minimum guaranteed return of 4.5 per cent per annum (or as specified by Irda from time to time) must be offered on the maturity date. This guaranteed return is applicable on the maturity date, for policies where all due premiums are paid.  In the case of unit linked pension / annuity products, no partial withdrawal shall be allowed during the accumulation phase and the insurer shall convert the accumulated fund value into an annuity at the vesting date. However, the insured will have an option to commute up to a maximum of one-third of the accumulated value as lump sum at the time of vesting.  

Go to Top

Photo Gallery
Players of Kerala Blaster football team pose for a group photo with Kathakali Dancers in Thrissur ..

Players of Kerala Blaster football team pose for a group photo with Kathakali Dancers in Thrissur ..

Barack Obama and Narendra Modi, at the dinner hosted in his honour, at the White House ...

Barack Obama and Narendra Modi, at the dinner hosted in his honour, at the White House ...

Actors Vikram and Karthi participating in a fast to protest Jayalalithaa's conviction ...

Actors Vikram and Karthi participating in a fast to protest Jayalalithaa's conviction ...

Lahore Lions skipper Muhammad Hafeez is bowled during the Champions League Twenty 20 ...

Lahore Lions skipper Muhammad Hafeez is bowled during the Champions League Twenty 20 ...

Congress Vice President Rahul Gandhi provides relief packages to a flood victim in Jammu ...

Congress Vice President Rahul Gandhi provides relief packages to a flood victim in Jammu ...

Modi waves to supporters  in front of the Indian Embassy in Washington ...

Modi waves to supporters in front of the Indian Embassy in Washington ...

People enjoy a sheep fight in Hubli, Karnataka ...

People enjoy a sheep fight in Hubli, Karnataka ...

Chief Minister of Assam Tarun Gogoi interacts with flood victims at a relief camp at Boko ...

Chief Minister of Assam Tarun Gogoi interacts with flood victims at a relief camp at Boko ...

Products made out of waste materials by the students of a college in Rohtak ...

Products made out of waste materials by the students of a college in Rohtak ...

India's Sunil Vitalacharya Sowmarpet and Akashdeep Singh celebrate their victory over South Korea ..

India's Sunil Vitalacharya Sowmarpet and Akashdeep Singh celebrate their victory over South Korea ..

Copyright 2014, The Printers (Mysore) Private Ltd., 75, M.G Road, Post Box 5331, Bangalore - 560001
Tel: +91 (80) 25880000 Fax No. +91 (80) 25880523