IRDA Initiates ULIPs Reformation To Meet Investor’s Needs

The Insurance Regulatory and Development Authority (IRDA) is stiffening the regulations for Unit Linked Insurance Plans (ULIPs) with its intention to retain the investment component of debt/equity option in a product’s lifecycle, instead of a stipulated time period.

kapil-sharma
  • 4.8~ Rated
  • 7.7 Crore Registered Consumer
  • 50 Partners Insurance Partners
  • 4.2 Crore Policies Sold

ULIP Plans

  • Plan starting from ₹1,000/month
  • Save upto ₹46,800 in Tax under section 80C^
  • Zero LTCG Tax
  • In built life cover
We are rated~
rating
7.7 Crore
Registered Consumer
50
Insurance Partners
4.2 Crore
Policies Sold

Top performing plans with High Returns**

Invest ₹10K/month & Get ₹1 Crore# on Maturity

+91
Secure
We don’t spam
Please wait. We Are Processing..
Your personal information is secure with us
By clicking on "View Plans" you agree to our Privacy Policy and Terms of use #For a 55 year on investment of 20Lacs #Discount offered by insurance company
Get Updates on WhatsApp
We are rated~
rating
7.7 Crore
Registered Consumer
50
Insurance Partners
4.2 Crore
Policies Sold
Disclaimer: #The investment risk in the portfolio is borne by the policyholder. Life insurance is available in this product. The maturity amount of Rs 1 Cr. is for a 30 year old healthy individual investing Rs 10,000/- per month for 30 years, with assumed rates of returns @ 8% p.a. that is not guaranteed and is not the upper or lower limits as the value of your policy depends on a number of factors including future investment performance. In Unit Linked Insurance Plans, the investment risk in the investment portfolio is borne by the policyholder and the returns are not guaranteed. Maturity Value: ₹1,05,02,174 @ CAGR 8%; ₹50,45,591 @ CAGR 4%. *Tax benefits and savings are subject to changes in tax laws. All plans listed here are of insurance companies’ funds.

The IRDA had previously advised that life insurance products should incorporate a saving element, such as, the consistent gross yield of 4% per annum attached to a bank linked savings account. Similarly, the expected maturity in linked insurance products should be minimal 90% of the total premium paid excluding the service tax.

Industry experts believe that due to the desired fund value of 90% at maturity for the premiums paid, IRDA is making it difficult to write ULIPs for older age group. For people above the age of 55 years where the mortality charge is high, the effect on the yield could go beyond 4%. This is an outright discouragement on ULIP investments for the retired investors.

Another private insurance company alleges that IRDA fund option is not independent of the product and does not favor closed-ended insurance schemes. The government watchdog intends to further reform the ULIPs for safeguarding the investors’ interest, with the view that IRDA cannot withdraw the fund options, even when the stock market corrects sharply.

The reforms in ULIPs has certainly improved the investors interest in 2014, with 33% increase in the premiums, raising the collected premium sums to INR 1,625 crore during the months of April-June as compared to a year-ago period.

The BSE Sensex index advanced to 26% in 2014 with the formation of a stable government augmenting economic reforms. Moreover, the private insurance companies are riding on the wave of bullish stock market to monetize the investments. Most insurance companies have already filed the online ULIPs schemes with IRDA.

The IRDA has instructed insurance companies to evaluate the pros and cons of the reformed ULIP schemes at each phase of execution to ensure the new, proposed featuresmeets the investor’s wealth accumulation goals, and will not claim any possibility for mis-selling.

The ULIP has undergone a revamp with the IRDA, specifying the minimum risk cover and the cap on the discontinuance charge. The maximum yield reduction at maturity is the difference between the gross and the net yields. Subsequently, the policies with a tenure of 10 years or less is capped at 3%, where as plans exceeding the 10 years time frame cannot exceed 2.25% in total charges.

Consequently, the internal rate of return (IRR) on ULIPs must not be lower than 7.75% yield. Additionally, IRDA has mandated an upsurge in the lock-in period, raising the bar from 3 years to 5 years, and thus guaranteeing that ULIP policies will have a long-term orientation.

 (Source: This article has been adapted from the article "IRDA moves to reform Ulip to stem mis-selling and meet needs of users" that appeared on October 29, 2014  ineconomictimes.indiatimes.com)

Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. The sorting is based on past 10 years’ fund performance (Fund Data Source: Value Research). For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
*All savings are provided by the insurer as per the IRDAI approved insurance plan.
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
+Returns Since Inception of LIC Growth Fund
¶Long-term capital gains (LTCG) tax (12.5%) is exempted on annual premiums up to 2.5 lacs.
~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ
^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.

Grow your wealth & meet your Financial goals

Systematically Invest in high growth plans with returns upto 18%*
View plans
Standard T & C Apply*
Insurers Offering ULIPs

Tata AIA

Aditya Birla Sun Life

Bajaj Allianz

Max Life

HDFC Life

ICICI Prudential

Bharti AXA Life

Edelweiss Life

Kotak Life

Future Generali

PNB MetLife

SBI Life

Aviva

Bandhan Life

Canara HSBC

IDBI Federal

IndiaFirst

Pramerica Life

Reliance Life

Sahara Life

Shriram Life

Star Union

View more insurers
Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.
Invest More Get More!
You Get
₹1 Crores*
You Invest
₹10K/month
You Get
₹80 Lakhs*
You Invest
₹8K/month
You Get
₹50 Lakhs*
You Invest
₹5K/month
capital guarantee
Investment Calculator
  • One time
  • Monthly
/ Year
Sensex has given 10% return from 2010 - 2020
You invest
You get
View plans

Ulip plans articles

Recent Articles
Popular Articles
Aditya Birla Salaried Suraksha ULIP Plan

05 Dec 2024

The ABSLI Salaried Suraksha ULIP is a unit-linked
Read more
Bajaj Allianz Life Assured Wealth Goal - Platinum Plan

05 Dec 2024

The Bajaj Allianz Life Assured Wealth Goal Plan is a life
Read more
14 ULIP Charges You Should Know About

14 Nov 2024

When investing in Unit-Linked Insurance Plans (ULIPs), it’s
Read more
Top-Up Premium in ULIP

11 Nov 2024

A top-up premium in a ULIP (Unit Linked Insurance Plan) allows
Read more
Sum Assured in ULIP

05 Nov 2024

Sum Assured in a Unit Linked Insurance Plan (ULIP) is the
Read more
ULIP Calculator
  • 08 Oct 2018
  • 128859
A ULIP Calculator is a financial tool designed to help you compare ULIP plans and estimate the maturity amount
Read more
SBI Life Smart Platina Plus
  • 09 Sep 2024
  • 30110
SBI Life Smart Platina Plus is a life insurance savings plan designed to provide financial security and income in
Read more
SBI Life Smart Privilege Plan: Benefits & Features
  • 11 Jan 2017
  • 107563
SBI Life Smart Privilege is a unit-linked, non-participating life insurance plan offered by SBI Life Insurance
Read more
Tata AIA ULIP Plan Calculator
  • 07 Feb 2023
  • 8662
A Tata AIA ULIP Plan Calculator is a premium and returns calculation tool that helps easily and quickly compare
Read more
SBI Life Smart Platina Assure
  • 23 Aug 2024
  • 4066
SBI Life Smart Platina Assure is a life insurance savings plan that offers guaranteed returns. It's a non-linked
Read more

top

Become a Crorepati

Invest ₹10K/Month & Get ₹1 Crore returns*

Mobile +91
*T&C Applied.
Close
Download the Policybazaar app
to manage all your insurance needs.
INSTALL