Irda Put Coundition For ULIP Policy Holders

Mumbai: The Insurance Regulatory Development Authority (Irda) has said that the policyholders in the unit linked insurance plans (ULIPs) can continue to invest in the policy for a short period after maturity, but cannot withdraw any amount or engage in fund management activities. In response to industry queries and for the benefit of policyholders, the Irda, in its clarification, has specified that while the policyholder had the option to remain with the scheme even after maturity, they cannot engage in fund management activities. To be precise, the policy holder will not have the option of switching funds, either to equity or debt or withdraw the amount. The decision to continue with the scheme after maturity will purely be the option of the policyholder.
While the permission has been granted for a short period of a week to a fortnight after the maturity of the scheme, no independent fund management activity will be allowed since the product does not give any insurance cover. Officials stated that the option would enable policyholders, who are not satisfied with the net asset value (NAV) during maturity, to hold on for a better NAV. Earlier, policyholders could remain with the scheme for five years after maturity and were entitled to partial withdrawal of funds, which have been plugged by the new clarification. Meanwhile, the regulatory authority is having a comprehensive review of the guidelines of ULIPs based on the experience of the industry in this product for over one year. The review will assess the life cover, investment portfolio, methodology of NAV calculation, among other things. ULIPs offer market-linked returns to customers, where customers can choose to invest in different asset classes such as money market instruments, debt or equities. Whether it's a regular premium or a limited premium plan, the minimum policy term for any unit linked plan is five years against the earlier three years. All ULIPs have a minimum life insurance cover which is five times one's annual premium.