Print Friendly, PDF & Email

Index Linked Products in the life insurance segment

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:

  1. About ILIP.
  2. How are they different from unit-linked insurance plans and traditional plans?
  3. Benefits of ILIP.
  4. IRDAI- composition and functions.

Mains Link:

Discuss the significance of Index Linked Insurance Products.

Sources: the Hindu.