If you are going to buy insurance then there is an important news for you. The Insurance Regulatory and Development Authority of India (IRDAI) has issued a major circular and banned the promotion of ‘Unit Linked Insurance Plans’ (ULIP) as ‘investment products’. According to the news of Bhasha, IRDAI’s circular of June 19 said that ‘unit-linked’ or ‘index-linked’ insurance products will not be advertised as ‘investment products’. Insurance companies will have to clearly state that market-linked insurance plans are different from traditional endowment policies and they also involve risk.
Companies will also have to disclose…
Similarly, participating (with bonus) endowment policies will have to disclose upfront that the projected bonuses in profits are not guaranteed, according to the news. IRDA said that risk factors will be disclosed in all advertisements of linked insurance products and annuity products with variable annuity payment option.
Some of the things that shall not be promoted in advertisements by insurance companies include promotion of services which are not related to insurance, comparing rates/discounts with erstwhile tariffs in case of a general insurance product, highlighting potential benefits of an insurance product without proper indication of the associated risks, partially disclosing benefits without any relevant limitations/conditions/implications, etc.
Asked not to exaggerate benefits
Companies have also been told not to exaggerate the benefits of the product. Also, the reputation of any competitor or industry should not be maligned. Also, it has to be made clear that the various funds offered under the agreement are only the names of the funds and in no way indicate the quality of these schemes, their future prospects and returns.
Latest Business News