The Insurance Regulatory and Development Authority of India has made significant changes for insurers. These changes will take force from February 1, 2020.
Below is a list of some of the new changes from LIC:
LENGTHEN THE REVIVAL TIME FOR A POLICY
As per the IRDAI, the time for people to revive the life insurance policies will increase now. The earlier period till when one could revive the policy was two years. Now, an increase of 1 year that is a three year time revival period will come into force.
Keep in mind that you can revive the policy anytime between 5 years in non-linked insurance products.
This is a great change as it provides an additional time frame to revive the policy. This is extremely helpful in cases of financial difficulties.
SUM ASSURED FOR BUYING ULIPS LESSENED TO 7 TIMES THE PREMIUM PAID.
Ever since February 1, for all ages under 45 years of age, it says that from the earlier ten times the premium, the sum assured has been reduced to 7 times the premium paid.
PENSION PLANS STRUCTURED TO BENEFIT THE INSURED
Now, as per the new changes, the pension plans will focus more on benefitting the insured. This means that even a lower sum can guarantee a high return. The earlier need to provide a mandatory guarantee for maturity proceeds has now been removed.
WITHDRAWAL LIMIT INCREASED TO 60 PERCENT
Now, your beneficiaries can withdraw up to 60 percent in the case of pension plans. A beneficiary can withdraw money at the time of vesting, surrender, or death.
The earlier limit set for withdrawing was 33 percent. However, when you withdraw an amount as big as 60 percent, the entire sum would not remain tax-free.