Old ULIP Guidelines by IRDA -Originally Posted by Bhairav
Premium Holiday: If the policyholder stops paying premium instalments after paying premiums for three years, the risk premiums and the applicable charges can be adjusted from the balance in the account value, till such time as the balance in the account reduces to one year's premium. This would help policyholders who are unable to pay premiums owing to a temporary disruption in income because of change in employment, or any other sudden drop in income. The premium holiday option ensures continued insurance protection by transferring the risk premium and charges due from the account value, which is built up over a period. But the policy would lapse and this benefit would not be available if premium payments are stopped within three years.
Withdrawals from ULIPs: Earlier, withdrawals from ULIPs were possible even within a year of issue. Depending on the option selected, they were reduced from the sum assured, resulting in dilution of death benefits to the nominees. Now, withdrawals will be allowed only after three years. The new guidelines provide that except for withdrawals made during the two years immediately preceding death, no other withdrawals can be reduced from the sum assured. But once the customer is past the age of 60, all withdrawals can be reduced from the sum assured.
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