Universal Life Products (ULPs) are Back – Variable Insurance Products (VIPs)
Variable Universal Life Insurance products are back in the Indian market as IRDA has published the new guidelines for these products.
"All VIP shall only be offered under non-unit linked platform and shall not be permitted on unit linked platform," Insurance Regulatory and Development Authority (IRDA) said.
VIPs, earlier known as Universal Life Products (ULPs), have greater flexibility over traditional plans and as such companies used to mix even the traits of ULIPs , which invest major portion of money in capital markets.
At present four companies -- Max New York Life, Aviva Life, Bharti Axa Life and Reliance Life -- offer these plans.
The guidelines also added that the maximum expense, including commission, should not exceed 27.5 per cent of the first year premium in the first year, 7.5 per cent of the premium in the second and third year and 5 per cent in the 4th year and subsequent premium. On top-up premiums, it should not be more than 3 per cent.
Insurance regulator IRDA on Tuesday said that all universal life products, a new kind of insurance which entered India recently and gives greater flexibility to customers, will not have any unit-linked component in them.
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