IRDA Circular No: IRDA/ACT/CIR/ULIP/102/06/2010 (28-Jun-10) Elements Proposed to be Incorporated in ULIPs (01.09.2010)
To
CEOs of All Life Insurance Companies
Elements Proposed to be Incorporated in ULIPs (01.09.2010)
Please refer following circulars:
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IRDA/Actl/032/ Dec 2005 dated December 21, 2005 and subsequent clarifications issued
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061/IRDA/ACTL/March-2008 dated 12th March, 2008
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IRDA/Actl/ULIP/055/2009-10 dated 24th September, 2009,
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IRDA/Actl/CIR/ULIP/071/066/04/2010 dated 27th April, 2010 and
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IRDA/ACTL/CIR/ULIP/071/05/2010 dated 3rd May, 2010
In order to meet the emerging needs of prospective insurance policyholders, this circular specifies certain elements which shall be incorporated in all ULIPs which may be offered for sale to the public commencing from September 1, 2010.
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The three year lock-in period for all Unit Linked Products will be increased to a period of five years, including top-up premiums. During this period, no residuary payments on policies which are lapsed / surrendered / discontinued will be made. The residuary payments for policies arising out of policies which stand lapsed/surrendered/discontinued during the lock-in period shall be payable on the expiry of the lock in period and in accordance with the relevant Regulations of IRDA.
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All regular premium / limited premium ULIPs shall have uniform / level paying premiums. Any additional payments shall be treated as single premium for the purpose of insurance cover.
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All limited premium unit linked insurance products, other than single premium products, shall have premium paying term of at least 5 years.
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The insurers shall distribute the overall charges, in ULIPs in an even fashion during the lock-in period.
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All unit linked products, other than pension and annuity products shall provide a minimum mortality cover or a health cover, as indicated below:
(i) Minimum mortality cover should be as follows:
...Minimum Sum assured for age at entry of below 45 years Minimum Sum assured for age at entry of 45 years and above Single Premium (SP) contracts: 125 percent of single premium. Regular Premium (RP) including limited premium paying (LPP) contracts: 10 times the annualized premiums or (0.5 X T X annualized premium) whichever is higher. At no time the death benefit shall be less than 105 percent of the total premiums (including top-ups) paid. Single Premium (SP) contracts: 110 percent of single premium Regular Premium (RP) including limited premium paying (LPP) contracts: 7 times the annualized premiums or (0.25 X T X annualized premium) whichever is higher. At
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