Life Insurance Products and Their Regulation
This domain tests how Indian life products are designed, filed and sold within IRDAI's product regime - features, mandatory benefits and filing discipline.
Product architecture
Indian life products include conventional non-linked (term, endowment, whole life, money-back), linked ULIPs, annuities/pensions, group and micro-insurance, plus riders. Regulation attaches to design, not only to marketing.
Filing and design rules
Most life products follow the 'Use and File' route under the IRDAI (Insurance Products) Regulations, 2024, which consolidated the earlier linked and non-linked product regulations. Insurers file before launch and must meet prescribed conditions; specified categories need prior approval. Minimum death benefit rules differ: conventional policies must pay at least 105% of total premiums paid; ULIPs must pay the higher of 10 times annualised premium (entry age below 45) or 7 times (45 and above), 105% of premiums paid, and the fund value. Free-look is 30 days; grace is 30 days (15 days for monthly mode). Benefit illustrations and charge disclosures must follow prescribed formats.
Worked example
A ULIP has annualised premium ₹1,00,000, entry age 40, three years' premiums paid (₹3,00,000) and fund value ₹3,50,000. Death benefit = max(10 × ₹1,00,000 = ₹10,00,000; 105% × ₹3,00,000 = ₹3,15,000; ₹3,50,000) = ₹10,00,000. At entry age 46 the multiple is 7, giving max(₹7,00,000; ₹3,15,000; ₹3,50,000) = ₹7,00,000. The age test is at entry, not death.
Traps
Using 10 times for all ages; forgetting the 105% floor; adding fund value to the death benefit instead of taking the maximum; assuming every product needs prior approval; confusing sum assured with death benefit.