Mumbai: Life insurance companies today
welcomed the IRDA`s move to remove mortality charges from
`cap on charges` on ULIPs products.
Last month, IRDA put a cap on overall charges that life
insurance companies can levy on subscribers of their Unit
Linked Insurance Policies (ULIPS).
The regulator has now said that the mortality and
morbidity charges may be excluded in the calculation of the
"We welcome the clarification that mortality charge is
not included in the cap. This allows insurance companies to
continue to provide adequate protection to policyholders,
which is the core objective of a life insurance policy," Aviva
India CEO and MD, T R Ramachandran, said.
Moreover, it allows companies to offer older customers
the benefits of life insurance, without crossing the cap,
The insurance regulator also said that no surrender
charge can be levied by an insurer for policies surrendered
from the fifth policy year and thereafter the policyholder
would be entitled to receive the full fund value on such