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