Life insurers welcome IRDA move to remove mortality charges
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Last Updated: Thursday, August 20, 2009, 23:42
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 net yield.

"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, Ramachandran said.

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 surrender.

Bureau Report

First Published: Thursday, August 20, 2009, 23:42

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