New norms for ULIPs: How policyholders can benefit

Insurance Regulatory and Development Authority (IRDA) has issued new norms where independent rating agencies will be allowed to evaluate the Unit Linked Insurance Plans (ULIP) to help policyholders assess and compare various products.

Sumeet Vaid, Ffreedom Financial Planners believes this is a great move not only for the investors, but also for financial planners and advisors. Also read: Traditional insurance plans: Can new rules get transparency Various ULIPs have various kind of expense structures and underlying funds which generate returns. So one couldn’t compare them on an even ground, he elaborates. "I think this is a big and a great move towards transparency and transparency is required for creating trust in minds of people." For any end customer it is important to be able to compare the terms and features of the insurance policies across the board before buying. "If I am buying ‘A’ ULIP from a particular manufacturer, I should be able to compare it with a ‘B’ ULIP of B manufacturer in terms of expense structures, in terms past performance, the kind of a portfolio it holds etc. I should be able to dissect it because it is eventually giving me access to market," he elaborates.