Fixed guarantee on surrender value will hurt insurersí investment freedom
The life insurance industry is still awaiting the final guidelines on the 18 standard products. How much of a game-changer would these be?
The 18 standard products aim to provide basic cover at affordable prices, and strive to meet the needs of a number of customers in a simple and straightforward manner. The comparability between providers will also allow customers to make informed choices.
However, any individualís insurance requirements are not always simple and straightforward, and may differ markedly from another individualís needs. Understanding each customerís requirements in detail is very important so that they can be provided with the best solution possible. To this end, the need for more evolved products, alongside the standard set of products, will remain. Insurance companies will need to provide a combination of products as per a customerís individual needs.
Would the new norms allowing insurers to invest in non-AAA corporate debt paper increase the risk for a policyholder?
The draft exposure norms suggest that both Ulip and non-Ulip can have an exposure of up to 25% in debt instruments that are non-AAA/sovereign rated. However, these investments have to be investment
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