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Life insurers will have to provide an immediate or deferred annuity, even in cases where pension products are surrendered before vesting date.
At the time of surrender or vesting, the policyholder shall have to buy a single-premium, deferred annuity or an immediate annuity product from the same insurer who sold the original pension policy, Mr J. Hari Narayan, Chairman, Insurance Regulatory and Development Authority, said in a circular issued on Thursday.
For surrenders after the lock-in period of the unit-linked insurance-based pension products, the surrender value should not be less than the fund value.
Surrender during the lock-in period of unit-linked products should be in line with the existing regulations.
An annuity is an insurance product that pays out income, generally to be used as part of a retirement strategy through a pension plan.
A vesting period is the period of time an investor or other person holding a right to something must wait until they are allowed to fully exercise their rights.
The circular was issued by the regulator in response to certain concerns expressed by insurance companies on the guidelines issued in January 2012 and November 2011, Mr Hari Narayan said.
nagsridhu@thehindu.co.in
At the time of surrender or vesting, the policyholder shall have to buy a single-premium, deferred annuity or an immediate annuity product from the same insurer who sold the original pension policy, Mr J. Hari Narayan, Chairman, Insurance Regulatory and Development Authority, said in a circular issued on Thursday.
Surrender value
For surrenders after the lock-in period of the unit-linked insurance-based pension products, the surrender value should not be less than the fund value.
Surrender during the lock-in period of unit-linked products should be in line with the existing regulations.
An annuity is an insurance product that pays out income, generally to be used as part of a retirement strategy through a pension plan.
Concern on guidelines
A vesting period is the period of time an investor or other person holding a right to something must wait until they are allowed to fully exercise their rights.
The circular was issued by the regulator in response to certain concerns expressed by insurance companies on the guidelines issued in January 2012 and November 2011, Mr Hari Narayan said.
nagsridhu@thehindu.co.in
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