Five Proposals in Your Life Insurance Products That You Will Cherish

Insurance Regulatory & Development Authority of India (IRDAI) has been consistent in adding values in the investment of the policyholders. Off lately they have proposed some remarkable features that may promise better returns. These five proposals as compared to your existing plans are summarised below and later elaborated in details.

Proposal (In Random Order)

Insurance Attributes


Amendments by IRDAI


Settlement of Unit or linked Products

Currently, you need to settle your unit-linked products within the 5 years of maturity or inception at the time of the demise of the policyholder or on maturity.

Now it has increased to 10 years, this will give better window period for the policyholder and his or her beneficiary in managing their finances.


Surrender Value for Non-Linked Policies

Three years

Two years


Least Death Benefits

10 times if you are less than 45 years, 7 times if you are above 45 years.

7 times for regular products, 1.25% for single premium products.


Limits on Pension Withdrawals

1/3rd on maturity that is taxable, rest 2/3rd in the annuity that is taxable.

60% on maturity with tax benefits, 40% annualized.


Non-Linked Insurance Products Revival

2 years

5 years

Above proposals as made by the IRDAI may turn out to be quiet beneficial for the policyholder, all of them has been elaborated below.

  • 1st Proposal: Settlement of Unit or Linked Products


Currently, all the policyholder need to settled all there linked or unit-linked products within a tenure of 5 years after the policy or commencement whichever is lower. They are required to do so at the time of maturity or during the death of the policyholder.

Amened/Benefits to the Policyholder

As per the current amendments, as proposed by IRDAI, policyholder or their beneficiaries are granted a period of 10 years. This tenure should be good enough for the insured to manage their finances as desired.

  • 2nd Proposal: Surrender Value for Non-Linked Products


According to the current rule, you as an investor in life insurance product can surrender your product only after 3 years of investing in any non-lined products. This may be an additional burden for the policyholder if they are planning to discontinue any of their products.

Amened/Benefits to the Policyholder

As per the latest proposal as recommended by IRDAI you can now surrender your non-linked insurance product within a tenure of 2 years. This may ease the burden of the policyholder to choose the desired product without compromising much on existing plans. Kapil Mehta, Co-founder- says “Shorter locking period can be useful for the policyholders who wish to quit from existing plans”.

  • 3rd Proposal: Least Death Benefits


Currently beneficiary of the policyholder can get the benefits 10 times of premium products if below 45 years. Above the age of 40 years, it’s 7 times.

Amened/Benefits to the Policyholder

A new proposal made by IRDAI recommends coverage of 7 times irrespective of the age of the policyholder. In the case of single premium products, the coverage will be 1.25 times. According to the industry experts, this plan is going to be really beneficial for the policyholder as the remaining amount can get back to the market that can help in building a huge corpus.

  • 4th Proposal: Limits on Pension Withdrawals


As per the current status, policyholders can only withdraw 1/3rd of their amount and rest 2/3 rd goes back in an annuity that is taxable.

Amened/Benefits to the Policyholder

With the recent proposal made by IRDAI, now a policyholder can withdraw up to 60% of their amount with tax benefits. Remaining 40% will be subject to the annuity without tax advantage.

  • 5th Proposal: Non-Linked Insurance Products Revival


Non you can revive any lapse policy within maximum 2 years to sustain it.

Amened/Benefits to the Policyholder

New amendment allows you to revive your policy within a tenure of 5 years. This can give policyholder better window period to arrange the funds to revive their existing policies.

Awaiting these proposals to come into action at the earliest for the benefits of the policyholders.

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