Topics Covered: Inclusive growth and issues arising from it.
Index Linked Products in the life insurance segment:
Context:
The IRDAI has set up a working group on Index Linked Products to examine the various aspects of Index Linked Products in the life insurance segment.
- Current IRDAI product regulations do not specifically permit insurers to sell index-linked products.
Background:
Life insurers had approached Irdai with a request to allow them to offer index-linked products. Life insurance companies currently offer two product categories — unit-linked insurance plans and traditional plans.
What are Index Linked Insurance Products?
They are insurance products whose returns are linked to benchmark indices. These products are linked to the 10-year government bonds or equity indices such as Sensex or Nifty.
- Such products allow the policyholder to get a guaranteed value.
InstaLinks:
Prelims Link:
- About ILIP.
- How are they different from unit-linked insurance plans and traditional plans?
- Benefits of ILIP.
- IRDAI- composition and functions.
Mains Link:
Discuss the significance of Index Linked Insurance Products.
Sources: the Hindu.
