Two years ago, investment-linked insurance plans (Ulips) strongly criticized for their insurance components offer a little. Following the reform of the CAP and other costs, Ulips have now been given a back seat and traditional plans had made a comeback but they continue with their bad practices Ulips as some of them offer insurance protection that is too little. This problem is serious enough for regulators to show when it wrote a letter to insurance Council (LIC), the statutory body, life insurance about the issues that need to be resolved.
Instead of giving the number of assured’s death in the middle of a term policy, this product gives the beneficiary the amount of premiums paid on death, together with interest accrued. This amount is much lower than what you would get in a normal insurance plan, which pays the amount of rest assured as a death benefit. But if you persist a term policy, the plan paid benefits of maturity, which they call a number of convincing.
In this policy the problem is not just a little insurance but also the tax grey area is used. The benefits of maturity in this plan is called the number of convincing — the amount bet is usually a death benefit beneficiary Gets a policyholder’s death-and because of the maturity benefits are typically more than five times the premium, this plan enjoy tax benefits. But this policy makes the number of guaranteed death benefits are different from opening the way for a new confusion.
The word Malay Ghosh, Executive Director, and President, reliance Insurance Co. Ltd.: “in the term insurance, sums assured are still defined as a death benefit recipient who gets a policyholder. In traditional plans typically amount sure are some of the few times the premiums were paid. The hotel offers only premium paid are usually intended for individuals who are uninsurable or extremely healthy. “
According to a letter written to LIC, regulators have been rightly points out that these products are not in sync with the requirements of the income tax and, therefore, the minimum amount of convincing even in the traditional should think about plan-currently, the traditional plan does not have a minimum amount of convincing as with Ulips. They may not fit the requirements of the income tax act in the spirit of, but in this letter has been done. This is how.
