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.

Best ULIP Plans
  • Guaranteed Tax Savings

    Guaranteed Tax Savings^

    Under sec 80C & 10(10D)
  • savings

    ₹1 Crore

    Invest ₹10k Per Month*
  • Zero LTCG Tax

    Zero LTCG Tax^

    Unlike 10% in Mutual Funds
We are rated~
6.7 Crore
Registered Consumers
Insurance Partners
3.4 Crore
Policies Sold

Top performing plans with High Returns*

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

We don’t spam
Please wait. We Are Processing..
Your personal information is secure with us
Plans available only for people of Indian origin 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~
6.7 Crore
Registered Consumers
Insurance Partners
3.4 Crore
Policies Sold

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

*All savings are provided by the insurer as per the IRDAI approved insurance plan.
*Tax benefit is subject to changes in tax laws. Standard T&C Apply
^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
~Source - Google Review Rating available on:-
^^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*
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
You Get
₹80 Lakhs*
You Invest
You Get
₹50 Lakhs*
You Invest
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
Dynamic Asset Allocation

21 May 2024

Dynamic Asset Allocation involves actively adjusting investment
Read more
ULIP Plan Riders

17 Jan 2024

ULIP or Unit Linked Insurance Plans provide rider benefits. They
Read more
ULIP Returns in 40 Years

08 Jan 2024

Estimating the ULIP returns over 40 years offers a unique
Read more
ULIP Returns in 35 Years

04 Jan 2024

A 35-year ULIP (Unit Linked Insurance Plan) emerges as an
Read more
ULIP Returns in 30 Years

03 Jan 2024

A 30-year ULIP (Unit Linked Insurance Plan) is a type of
Read more
ULIP Calculator
A ULIP Calculator is a financial tool designed to help you compare ULIP plans and estimate the maturity amount
Read more
SBI Life Smart Privilege Plan: Benefits & Features
SBI Life Smart Privilege is a unit-linked, non-participating life insurance plan offered by SBI Life Insurance
Read more
ULIP Returns in 5 Years
ULIP means Unit Linked Insurance Plan. It is a unique financial instrument that combines insurance coverage with
Read more
Tata AIA ULIP Plan Calculator
A Tata AIA ULIP Plan Calculator is a premium and returns calculation tool that helps easily and quickly compare
Read more
11 ULIP Charges You Should Know About
Unit-Linked Insurance plan (ULIP) offers dual benefits of insurance and investment. Unlike traditional insurance
Read more


Become a Crorepati

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

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