Changes made in life insurance products set to benefit policy-holders; Check what are they
New rules have allowed partial withdrawal of 25% from pension products, and this can be done in case of serious illness, child marriage and for study purpose.
After a long wait of 9 years, Insurance Regulatory and Development Authority of India (IRDAI) has issued new rules related to Life Insurance products. The new rules will be for non-linked and ULIP products and will be very beneficial for the policy holders, said a Zee Business TV report.
According to the report, the biggest step for the rights of the policy holder is that the deadline to revive a non-linked policy has now been increased from 2 years to 5 years, while the revival period for ULIP products has also been increased from 2 years to 5 years.
In case of the non-linked policy, if a policyholder surrenders the policy after two years, then he/she will be entitled to get a fixed amount of up to 30%, and if he/she surrenders it from the 4th to 7th year, amount received by them would be 50%. the report said.
In non-linked policies, Minimum Death Benefit has been reduced from 10 times of the annual premium to 7-fold, according to the new rules. However, to get concessions under Section 80C of Income Tax, annual premium of life insurance policy is required to 10 times of the single premium, said the report, adding that companies will now be able to offer products without income tax exemptions to customers.
RM Vishakha, MD, India First Life Insurance, told Zee Business "the changes in the rules are in the favour of policyholders, who, with the change in the revival period from 2 years to 5 years in the non-linked product, will not have to close their policies."
Notably, she added that now insurance pension products would also be equal to NPS.
लाइफ इंश्योरेंस प्रोडक्ट्स में हुए बदलावों से ग्राहकों को कितना फायदा? देखिए इंडिया फ़र्स्ट लाइफ इंश्योरेंस की MD आर एम विशाखा से अनुराग शाह की खास बातचीत।@anuragshah710 @IndiaFirst_Life pic.twitter.com/ESGicpkntY
— Zee Business (@ZeeBusiness) July 16, 2019
The report added that the new rules have allowed partial withdrawal of 25% from pension products, and this can be done in case of serious illness, child marriage and for study purpose.
In the Ulip policy, companies currently had the option of reducing the unit in case of taking the rider, but now the companies will be able to give riders like additional premium along with critical Illness to policy holders, the report added