As the IRDA & SEBI tussle over ULIPs gets into a prolonged battle- it seems to have started claiming its first victims.
In a bid to make Life Insurance sales come closer to the transparency levels in Mutual Funds, IRDA has mandated all Life Insurers to clearly spell out the commission structure on their policies.

This means that any customer would henceforth know how much of his/her first year premium is being pocketed by the sales guy. This could give a lot of bargaining power in the hands of the consumers. As it is, the market is known to have numerous instances of agents passing back a part of their commission to customers to close sales. With this - one can only expect such dubious sales processes to increase.

Not surprisingly, most insurers are unhappy with the move & they feel that such disclosures on margin structures are not really required.

Most non-life insurance products have seen an increase in their pricing in the Q3 & Q4 of 2009. And according to a survey by Marsh, the rates are expected to move further northwards.
The report analysed 10 major commercial insurance lines across 42 countries, including India.

According to the report:
- Premium on property increased by up to 10 per cent during the second half as insurers ceased to offer high discounts.
- Premiums on healthcare and casualty increased by up to 10-20 per cent as it became unsustainable for players to discount it. Prior to detariffing, group mediclaim policies were doled out as freebies with fire and engineering policies.
- Premium on professional indemnity and directors’ and officers’ liability (D&O) increased by up to 10 per cent and up to 20 per cent respectively.

IRDA, the insurance regulating authority has just approved the ULPs- Universal Life Policies for Bharti Axa Life Insurance and Max New York Life.

Its an interesting development in our opinion because of the inherent nature of ULPs.

Here are few of the salient features

1.Customers have flexibility in premium, sum assured as well as the tenure of the product.

2.Freedom to vary the payment of the premium over the policy’s life- you can start with monthly payments, switch to annual then quarterly and so on. What does not change is the premium quantum.

3. Also the policy is not automatically cancelled even if the customer fails to pay the premium. Even if the lapsed payment is not made , the ULP will be kept in force- what does change is the sum assured at the time of payout.

IRDA's reducing the Capital Requirements for Insurance companies to sell term policies will result in an immediate fall in the rates of term plans, making them much cheaper than the current prices.
While a few Insurers like Kotak & Religare have already revised the rates downwards , most others are expected to follow suit, soon.

Experts say that the similar trend would be seen in the Endowment policies also, but with a certain lag.

Compare Term plans | Don't Know about the Types of Life Insurance Policies? Read here