New Delhi, Sept 23: Buoyancy in equity market and soft interest rate regime have prompted insurers like LIC, ICICI Prudential, Birla Sunlife and Aviva to focus on unit-linked products that provide life cover as well as tax benefits and capital appreciation to investors. Om Kotak Life also launched a unit-linked policy recently while HDFC Standard Life is planning to do so shortly, industry sources said today.

The unit-linked policies are fast catching the fancy of investors in the wake of falling yields on government securities to lower than 6.0 per cent that forced many insurers to promise a lower assured return and bonus.

Life Insurance Corporation, for instance, plans to push up the sale of its unit-linked products 'Bima Plus' to 40,000 policies for a premium income of Rs 50 crore this fiscal.

"Unit-linked policies are becoming attractive. We are hand-picking agents to sell Bima Plus, as it requires additional skills," LIC chairman S B Mathur told newspersons here.

LIC has made huge gains on its equity and debt portfolio in the last couple of months. This would, in turn, push up the net asset value of its unit-linked product.


Aviva Life Insurance, which started operations only last year, plans more unit-linked products in the coming years, its CEO Stuart Purdy said.
"The NAV of the unit-linked fund has appreciated by 37.32 per cent during the last 12 months ending august 31," Aviva marketing director, Vivek Khanna, said.

The unit-linked products are like mutual funds with the value of investment appreciating with the gilt and equity prices. They also offer life cover as well as tax rebates as provided under Section 88c of Income Tax Act.
Bureau Report