New ULIP Guidelines: Benefits and Impact

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ULIP Insurance India
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New ULIP Guidelines Benefits and Impact
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• Insurance Regulatory and Development Authority of
  India has issued new guidelines for ULIPS. These
  new set of guidelines are applicable from
  September 1. Let us discuss about the pros and
  cons of these guidelines.
• Mortality health Cover It has been made
  mandatory to have Mortality Health Cover for all
  ULIPS apart from Pension and Annuity schemes..
• Change in Lock in Period This period of ULIPS
  has been changed from 3 to 5 years keeping it as
  a long horizon investment.
• Loan facility has been made available to all
  investors so that they can stay invested without
  breaking it. Loan to an extent of 40 of the fund
  value can be obtained.
• No partial withdrawal is available under new Ulip
  Insurance India. This enables a person to stay
  invested and hence protect his corpus.
• A guaranteed return of 4.5 has been announced to
  keep investors happy.

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• From this time charges will be deducted in
  uniform manner.
• Extra top up premiums have become eligible for
  extra life cover. Earlier top up premiums used
  add up yo the fund value but didn't use to
  provide any extra insurance cover. From now
  onwards top up premiums will be eligible for
  insurance cover also.
• Negative Impact As insurers have rolled out so
  many goodies, it has come with a price. They have
  also increased the minimum Top Up premiums for
  most of their polices. However all these changes
  are in general good news for an investor who
  wants to stay invested for a long period.
• Another key selling point for ULIPs is about, you
  pay premium just for 5 years and you can get back
  X times money in 7 or 10 years. On paper this
  sounds nice but if you ask experts, you have to
  stay invested for at least 10 years or even more
  when the stock market is doing great in order to
  achieve average returns of around 10. The point
  about stock market doing good is of special
  importance because, your returns are linked to
  the stock market and during bad years your
  investment is probably losing value more than
  its gaining.

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