Insurance Regulatory and Development Authority (IRDAI) on Monday issued new rules for life insurance policies, including ULIP and non-linked products. According to the new rules, the minimum death benefit has been reduced from 10 times to 7 times in non-linked policies. In a non-linked policy, if the customer surrenders the policy after two years, then it will get a fixed amount. Also, the time limit for renewal of non-linked policy has been increased from 2 years to 5 years now.
According to experts, these changes in the rules of life insurance policies are going to help customers in the long run. In the new rules, the minimum duration for a single policy has been fixed at 5 years. According to the new rules, customers will be allowed to withdraw 25 percent of the sum insured from pension products. This can only be done in the event of an emergency, like serious illness, marriage, and education of children.
If a customer wants to buy ULIP with the rider, he may take the permission of the additional premium. In the ULIP policy, customers will now be allowed to add several riders, including the payment of additional premium, including critical illness. At present, if a customer takes the Rider in the ULIP policy, then the company has the option of reducing the unit.
In the month of May, IRDAI approved new rules in the insurance sector for life insurance policies. It is expected that this step will benefit the insurance sector as it will facilitate the process of introducing new products and services to the customers.
The regulator has allowed a reduction in premium after the payment of premium for the first five policy years and once the premium is reduced, the premium cannot be extended later. The non-linked whole life policy will provide coverage of up to 80 years.
On the pension front, the regulator has brought insurance on par with the National Pension System. It has allowed the holders of pension plans to use all or at least 60% to buy an immediate annuity or deferred annuity from the prevailing annuity rate or from any other insurer to the same insurer.