New ULIP guidelines from Sep2010

In India, IRDA( Insurance Regulatory and Development Authority) has issued the following guidelines for ULIPs w.e.f. 1.9.2010

  1. The lock in period cannot be less than 5 years. If any one withdraws from the scheme anytime within 5 years, he will get his payment after deduction of administrative charges only after 5 years.
  2. Surrender charges will be less as only acquisition charges are to be recovered from ULIP holder. This will increase surrender value and beneficial to ULIP holder.
  3. The difference between gross yield and net yield is capped. This cannot exceed certain % and hence investor will get more money and insurance companies cannot charge investors unnecessarily.

C. R. Venkata Ramani



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