Download the Policybazaar app
to manage all your insurance needs.
IRDA Recommends 25% Investment of ULIP Funds in Government Securities
With the Insurance Regulatory and Development Authority (IRDA) proposal to invest 25% of unit-linked investment fund (ULIP) into central government securities, the government will receive a larger pie of the income generated by the life insurance sector. This proposal is in lieu of the fact; the government requires capital for infrastructure programs.
- 4.8++ Rated
- 9.7 Crore Registered Consumer
- 51 Partners Insurance Partners
- 4.9 Crore Policies Sold
ULIP Plans
- Plan starting from ₹1,000/month
- Save upto ₹46,800 in Tax under section 80C^
- Zero LTCG Tax¶
- In built life cover
We are rated++
9.7 Crore
Registered Consumer
51
Insurance Partners
4.9 Crore
Policies Sold
Top performing plans˜ with High Returns**
Invest ₹10K/month & Get ₹1 Crore# Tax-Free*
- Home
- Life Insurance
- Ulip Plans
- News - UP
- IRDA Recommends 25% Investment of ULIP Funds in Government Securities
However, this move by IRDA will dampen the spirits of both private sector insurance firms and investors who had betted heavily on ULIP for their future planning. With the proposal to invest in G-sec bonds, ULIPs will deliver lower returns. Subsequently, valuation of insurance firms like ICICI Prudential and HDFC Life will greatly suffer, especially when these insurance firms are preparing to raise capital from investors.   Â
In the investment regulations draft, IRDA commented, “No less than 25% of ULIP funds will be invested in the G-Securities. If a ULIP plan is completely equity oriented, yet a minimum of 25% must be utilized in central government securities.”
In the previous fiscal year, income generated from ULIP plans sales witnessed a substantial growth, from Rs 36,000 crore to Rs 41,565 crore. For a sector emerging from a slow growth phase, this proposal will negate the efforts, and minimize their profitability.   Â
IRDA contradicts the insurers view and suggests the income from the sales of this long-term product should be utilized towards infrastructure developments as laid down by the Indian Government. Moreover, the global markets pose no restriction on allocating funds in ULIP, so why should the Indian Insurance sector protest? Â
ULIP is an equity investment scheme with an insurance cover. However, the insurance cover is lower in ULIP as compared to what you get by paying the similar premium towards a term insurance plan. Interestingly, if the insurance cover is 10x the ULIP premiums, investors can avail a tax benefit under Section 80C of the Income Tax Act. Furthermore, the investors can exit after 5 years. These benefits trigger investors to invest in ULIPs.
Since 2010 regulatory amendments, ULIPs have become investor-friendly. The product today offers lower brokerage commission and ensures an increased protection level, an improved premium paying termand lock-in period.
Source: This news was published on July 01, 2015 in economictimes.indiatimes.com under the title: “IRDA proposes 25% of unit-linked insurance funds be invested in government securities”
˜Top 5 plans based on annualized premium, for bookings made in the first 6 months of FY 24-25. Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
*All savings are provided by the insurer as per the IRDAI approved insurance
plan.
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
+Returns Since Inception of LIC Growth Fund
¶Long-term capital gains (LTCG) tax (12.5%) is exempted on annual premiums up to 2.5 lacs.
++Source - Google Review Rating available on:- http://bit.ly/3J20bXZ
^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.
Insurers Offering ULIPs
Tata AIA
Aditya Birla Sun Life
Bajaj Allianz
Axis Max Life
HDFC Life
ICICI Prudential
Bharti AXA Life
Edelweiss Life
Kotak Life
Future Generali
PNB MetLife
SBI Life
Aviva
Bandhan Life
Canara HSBC
IDBI Federal
IndiaFirst
Pramerica Life
Reliance Life
Sahara Life
Shriram Life
Star Union
Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or
insurance product offered by an insurer.
- SIP Calculator
- Income Tax Calculator
- Compound Interest Calculator
- NPS Calculator
- Show More Calculator
Investment Calculator
- One time
- Monthly
₹
/ Year
Sensex has given 10% return from 2010 - 2020
View plans
Ulip plans articles
Recent Articles
Popular Articles
22 Apr 2025
The Future Generali ULIP Calculator is an online tool designed
01 Apr 2025
Unit Linked Insurance Plans (ULIPs) combine insurance coverage
17 Feb 2025
The Canara HSBC Promise4Growth Plan is a unit-linked individualExplore the popular searches and stay informed
- ULIP Calculator
- ULIP Plan
- 50k Pension Per Month
- Annuity Plan
- Atal Pension Yojana Calculator
- Best Pension Plan in India
- Best SIP Plans
- Child Investment Plan
- Child Plan
- Deferred Annuity Plans
- Government Schemes for Girl Child
- HDFC SIP Calculator
- Immediate Annuity Plans
- Investment Plan
- LIC
- NPS Interest Rate
- Pension Plan
- Post Office Child Plan
- Prime Minister Schemes For Boy Child
- Retirement Planning
- SBI Annuity Deposit Scheme Calculator
- SBI SIP Calculator
- SBI SIP
- SIP Calculator
- SIP
- Sukanya Samriddhi Yojana Interest Rate
- Sukanya Samriddhi Yojana
- 1 Crore Term Insurance
- Best Term Insurance Plan
- Term Insurance for Women
- Term Insurance for NRI
- Term Insurance
- Term Insurance Calculator
- Life Insurance
- Term Insurance with Return of Premium
- Whole Life Insurance
- Term Insurance vs Life Insurance
- What is Term Insurance
- Life Insurance Calculator
- 5 Crore Term Insurance
- 2 Crore Term Insurance
- 50 Lakh Term Insurance
- Term Insurance for Housewife
- Benefits of Term Insurance
- Term Insurance Terminology
- Medical Tests for Term Insurance
- Term Insurance for Self Employed
- Claim Settlement Ratio
- 10 Crore Term Insurance
- Term Insurance for Smokers
- 1.5 Crore Term Insurance
- Zero Cost Term Insurance