Insurance Regulatory and Development Authority (IRDAI) on Monday issued new rules for life insurance products, including ULIP and non-linked products.
As per the new rules, the minimum death benefit in non-linked policy has been decreased from 10 times to 7 times. In non-linked policy, the customer will get a fixed amount if the customer surrenders the policy after two years. The revival period for the non-linked policy has been increased from two years to five years.
Experts told Zee Media that the changes in rules of life insurance products are going to help the customers in the long run. The minimum duration for a single policy has been fixed at five years.
As per the new rules, the customers will be allowed to withdraw 25% of the insured sum from pension products. This can be done only in the time of emergency, including serious illness, marriage, and education of children.
If a customer wants to buy ULIP with rider then they can take permission for an extra premium. In ULIP policy, the customers will now be allowed to add several riders including critical illness by paying an extra premium. At present, the companies have the option to reduce the unit if a customer takes rider in ULIP policy.
It may be recalled that in May IRDAI had approved new rules in the insurance sector applicable to life insurance policies. It is expected that the move would benefit the sector as it will ease the process of launching new products and services for customers.
Experts maintain that the quick approval of new and standard products in the insurance sector will allow the companies to send a good product or idea to customers in less time.