As per the IRDA latest notification, holder of unit linked insurance plan (ULIP) who have discontinued their policy will get a minimum guaranteed interest on the fund value as applicable to savings bank accounts of State Bank of India (SBI) from the date the policy has discontinued.
The Insurance Regulator and Development Authority (IRDA) have addressed the life insurance companies also in regard of the revival of ULIP. In the circular, IRDA have asked life insurers to permit their policyholders to revive their policy within two years from the date of discontinuation i.e stoppage of premium payment but not later than the expiry of lock-in period.
In case of policy revival request from policy holder within 2 years, the discontinuation charges levied will be duly adjusted to the fund value of the policy holder. Unit allotment would be on the basis of NAV of the units as on the date of such revival.
Other than that IRDA have asked the insurers to invest the discontinued policy funds of the policyholder according to the pattern filed and approved by the authority. And at the time of policy discontinuation before maturity, the insurer should levy only discontinuation and fund management charges. “No other charges, by whatsoever name, shall be levied,” the IRDA said.