It is being proposed to lower the life cover multiple in life insurance policies. How will it help policyholders? How will tax benefits be impacted?
IRDAI’s new regulations on life insurance policies have given the flexibility on choices of sum assured multiples. It has also now reduced the minimum sum assured to 7 times the annual premium, from what previously was 10 times the annual premium for those below 45 years of age. The 7 times cover shall mean lower mortality charges, which would result in higher investable corpus leading to superior absolute returns for the customer.