IRDA sets conditions for ULIP policy holders

Mumbai: The Insurance Regulatory Development Authority (IRDA) has said that while policyholders in the unit linked insurance plans (ULIPs) can remain invested in the policy for a short period after maturity they cannot withdraw any amount or engage in fund management activities.

Hence, the policy holder will not have the option of switching funds, either to equity or debt or withdraw the amount. The decision to continue with the scheme after maturity will purely be the option of the policyholder.

While the permission has been granted for a short period of a week to a fortnight after the maturity of the scheme, no independent fund management activity will be allowed since the product does not give any insurance cover.

Officials stated that the option would enable policyholders, who are not satisfied with the net asset value (NAV) during maturity, to hold on for a better NAV.

Earlier, policyholders could remain with the scheme for five years after maturity and were entitled to partial withdrawal of funds, which have been plugged by the new clarification.