The revival of ULIPs

If you have been looking for manners to make your profile, versatile, it is a definite that you have heard of ULIPs or are planning to invest in it. After all the ULIPs known as Unit Linked Insurance Plans, provides risk cover for policy holder as well as an amazing investment option. Who wouldn’t like to invest in a plan like this? It is taking care of both investments and insurance. It is a single integrated plan which suffices your need.

However, have you thought what if you purchase the policy and it lapses? It is a probability that you have obliterated to pay the premium, and all this even after continuous reminder from the company. Life poses the worst case scenarios, when you least expect it. This will lead to lapse of the policy. If the policy is completely lapsed it will be such a waste of money and security.

In order to aid such individuals, the IRDA Insurance Regulatory and Development Authority have provided with the relaxed rules. It implies that then there is a probability of revival of policy by the policy holder, within 2 years of the premium date. However, these new guidelines will be applicable to the ULIPs which have been issued after September 1, 2010. Yet, again the ULIPs that have crossed the lock in periphery will not get any sort of advantage of these replaced rules.

The revival of ULIPs initiated since November 1, 2011. The objective for the same was simple; it was pursued to aid the policyholders. Initially the lapsed policy could not be revived after it crossed the tenure of 60-75 days after the due date of the premium. It is in these instances that the policy was considered as ‘withdrawn’. The amount which was associated with the policy in such cases transferred to discontinued policy fund. These remained in the same fund for a period of 2 years, and at the end of the 5th year it becomes payable to the policy holder. However, with the novel rules which incepted from November 1, the scenario altered, with the aid of revivals. In fact, it has also enabled the returns to be linked to the saving account interest rate of SBI. Hence, ensuring more benefit.