Private insurance company Kotak Mahindra Old Mutual Life Insurance today said that the heavy redemption witnessed by country's mutual funds in view of volatility in stock market would have 'favourable impact' on the insurance industry from next month.

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"There will be a good impact on country's life insurance industry from next month as people will now be inclined to invest their surplus money in the insurance segment which is a safe bet compared to equity market," said Yog Raj Sharma, National Sales Head, Kotak Mahindra Old Mutual Life Insurance.

He informed that the country's mutual fund industry has witnessed heavy redemption amounting to Rs 22,500 crore in last one month.

"This surplus money, which is available in the market will also go to post offices and banks, besides insurance sector," he said.

Admitting that the recent stock market crash amid global turmoil has also hit the Unit Linked (ULIP) Schemes of the life insurance industry, he said that investors would now like to invest in debt and guaranteed securities of ULIP schemes in a bid to prevent the erosion of their funds due to fall in stock market.

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