Wednesday, December 15, 2010

IRDA GOES STRICT ON UNIVERSAL LIFE POLICIES

After unit-linked insurance plans, the Insurance Regulatory and Development Authority (IRDA) have
introduced stringent guidelines for universal life policies (ULIPs). The guidelines stipulated that VIPs
should provide only mortality cover and no other contingency. The policy should be for a minimum of five years. The sum assured should be at least ten times that of the annualized premium. On death, a benefit equal to the guaranteed sum assured plus the balance in the policy account will be provided. On maturity, a benefit equal to the balance in the policy account together with a terminal bonus, if any, will be paid to the policyholder.

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