ING Life banking on traditional products vis-a-vis Ulips

Private life insurer ING Life India today said it would continue to focus on selling traditional products vis-a-vis Unit Linked Insurance Plans (Ulips).

“Traditional life insurance plans are beneficial to all the stake holders, including the insured, insurer and the financial advisor,” ING Life India, executive vice-president (central and east), Syed Sarfaraz told the media here.

He informed the company already maintained a ‘healthy’ product mix with the traditional life insurance accounting for 60 per cent of the portfolio, while the balance coming under Ulips.

Ulips provides for life insurance, where the policy value varies according to the value of the underlying assets at that time. It offers life insurance as well as an investment like mutual fund. While, the part of premium goes towards the sum assured, the balance is invested in instruments such as equity.

Recently, sector watchdog Insurance Regulatory and Development Authority (Irda) had tightened the norms for Ulips by raising lock-in-period from 3 to 5 years to provide risk protection. This has made Ulips long term financial instruments.

These guidelines followed the public spat between Irda and Securities and Exchange Board of India (Sebi) for jurisdiction over Ulips, which Sebi had claimed were equity products.

Based on traditional platform, the product guarantees the maturity value as decided by the parent, additional guarantee of death benefit to policyholder, guarantee of policy continuing in case of death of parent and guaranteed coverage for child after maturity.