On 3rd May, 2010 IRDA came out with an amended ULIP regulation…or whatever it is called. There is nothing special except that the reports in the media suggest that it is something new.
Well the things are:
No partial withdrawal from a pension plan – this will make the pension plan even more tax inefficient. To the mis-sellers it will not matter. The client will not know till he tries to withdraw. L O L.
You will have to annuitise the plan – all the amount (it also says 1/3rd) can be taken as a lumpsum – the balance 2/3 has to be converted to a pension. This friends is not TO protect YOU. It is to help the life insurance company keep the accumulated money permanently with the insurance company. This is to help the insurance company earn fee and pay a poor return to the policy holder. In a country where the Senior Citizen Yojana pays 9% p.a. why buy an annuity which pays 5%. Beats me.
And I know of brilliant professional brothers of mine who have bought real big – Rs. 20L pa pension plans – WITHOUT understanding what they have bought. God bless the EDUCATED FINANCIAL ILL-LITERATES OF mera Bharat mahan.
Cir No. IRDA/ACTL/CIR/ULIP/071 /05/2010
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