Sebi has done a good job on regulating mutual funds so Sebi's move to regulate ULIPs may be a blessing in disguise for ULIP investors.
Amid the Reserve Bank expressing reservations over the Unit Linked Insurance Products (ULIPs) ordinance, the Finance Ministry on Tuesday said a bill to replace the ordinance would be placed in the forthcoming session of Parliament beginning July 26.
Sebi is locked in a turf battle with insurance regulator IRDA over who has jurisdiction over ULIPs.
Insurance regulator IRDA today said it will not tweak its proposed guidelines on unit-linked insurance products (ULIPs) even as the industry fears that the norms, to be effective from next month, could squeeze their profits in short term.
In an online chat with Get Ahead readers on August 26, Sanjay Tripathy, senior executive vice president, marketing, product, digital and e-commerce, HDFC Life, answered their queries on ULIPs.
Finance ministry asks Irda to make this and other changes while clearing these products.
rediffGURU Sunil Lala answers your MF-related queries.
Do you think equity linked saving schemes, ELSS, are a better option than unit linked insurance plans, ULIPs? What are the pros and cons of investing in both? Which scheme gives better returns in the long term?
Insurance agents of all life insurance companies selling unit linked insurance plans will now show rate of returns ranging between 6 and 10 per cent to customers.
After winning the turf war with market watchdog Sebi on ULIPs, insurance regulator Irda on Monday said it would frame new guidelines for these products to make them more attractive for policy holders.
The key highlight Reliance Life Insurance Highest NAV Advantage Plan is that it offers guarantee on maturity with the highest net asset value per unit achieved during the entire 15 years policy term, Reliance Life Insurance said in a statement.
IRDA said it wanted to seek a legal mandate jointly with Sebi, but the market regulator had reservations.
Questions market regulator's showcause to insurers on conceptual, legal, structural grounds.
Unit linked insurance plans, though, a best selling product may not be actually best suited for you, says financial expert Amar Pandit.
In what would make unit-linked insurance plans (Ulips) more investor friendly, the Insurance Regulatory and Development Authority (Irda) on Tuesday proposed to cap surrender charges and standardise the revival period for polices that had lapsed.
Corporate Affairs Minister Salman Khurshid on Wednesday downplayed fears that investors would lose confidence due to the row between SEBI and IRDA over market-linked insurance policies, as the issue will be resolved in favour of either one regulator or the other by the courts.
High-value insurance policies experienced muted growth in the first six months of the current financial year after the Centre decided to tax such products in this year's Budget. Simultaneously, there has been a marked improvement in the growth of policies with premiums of 'less than Rs 5 lakh', mainly originating from smaller cities. During this year's Budget, Finance Minister Nirmala Sitharaman proposed that insurance policies (excluding unit linked insurance plans or ULIPs) with an aggregate premium exceeding Rs 5 lakh, and the maturity amount, would not be exempt from tax.
The introduction of the new guidelines for expenses on unit linked insurance plans (ULIP) will mean that investors will benefit from the lower cost.
Customers have certain misconceptions about ULIPs. The charges for ULIPs are not as high as one thinks.
We are, therefore, setting up more branches in more tertiary terms, like tier 2 and tier 3 terms. Going forward, that is where the growth will come.
The Insurance Regulatory and Development Authority (Irda) may allow up to 25 per cent investment to a single group of companies as part of the group exposure norms for unit-linked insurance plans (Ulips).While in the normal course, the regulator is likely to cap the investment of such polices at 20 per cent, the ceiling can be relaxed by another 5 per cent with prior approval of the board through what is called discretionary limits.
The Sebi, on Friday, banned 14 life insurance companies, including Reliance Life, SBI Life, ICICI Prudential, Tata AIG and HDFC Standard Life, from raising fresh money in ULIP schemes that invests a major chunk of funds in stock markets.
Max New York Life's recently launched Ulip gives you the all-equity option
The total benefits paid by private life insurance companies to policyholders rose by 5.98 per cent to Rs 1.57 trillion during 2022-23. This figure stood at Rs 1.49 trillion in the corresponding year-ago period. On the other hand, Life Insurance Corporation of India (LIC) paid out 4 per cent fewer benefits at Rs 3.39 trillion from Rs 3.53 trillion in 2021-22.
Here are some golden nuggets when it comes to creating wealth. Read them and if you find yourself saying, 'This everybody knows', cross your heart and ask yourself how many times you have forgotten these simple rules, says P V Subramanyam.
Find out which amongst the three tax-saving options investors should opt for.
ULIPs don't make the most effecient savings or invetsment product. And here's why...
Falling markets have not spared Ulips, but their long-term mandate still keeps them worthwhile
The new rules of the Insurance Regulatory and Development Authority take effect from September 1.
Securities Exchange Board of India chairman C B Bhave, and Insurance Regulatory Authority of India chief J Harinarayan had separate meetings with finance secretary Ashok Chawla on Monday over the ongoing tussle between the two regulators over equity-linked insurance schemes.
The cornerstone of any efficient financial market is certainty and coherence in its regulatory framework.
Concerned over the ongoing public spat between the two regulators, the government on Wednesday asked Sebi and Irda to move court immediately on the contentious issue of who will regulate unit-linked insurance products.
Many life insurance companies are yet to see a sharp spike in the sale of high-value policies as was widely expected in the aftermath of the government's decision to tax income from insurance policies having an aggregate premium above Rs 5 lakh in a year.
Unit linked insurance, ULIP, products are not good for you because of high charges. They invest less of your insurance premium in the stock markets than you are made to believe.
The 2023 Budget set off a downtrend in the listed life insurance company stocks. The key reason was a proposal to tax income from insurance policies (other than unit-linked insurance plans or ULIPs) with a premium, or aggregate premium, of above Rs 500,000 per annum. This impacted the traditional savings profile since it affected the returns for these products.
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