The country’s largest life insurer, Life Insurance Corporation (LIC), is looking at timing the market to launch a unit-linked insurance plan so that the policyholder gets better returns, said a top company official.

SK Roy, Chairman of LIC, said, “We are faced with a dilemma on when we should launch a Ulip, seeing it from the customer point of view, and especially looking at the kind of returns the customer is expecting. Ulips have been positioned more as an investment product rather than a life insurance product.”

New guidelines

The insurance regulator introduced new guidelines whereby life insurers have to stop selling all existing products and introduce new products compliant with its guidelines from January 2014. At present, LIC does not have a single Ulip product among the 12 insurance plans it sells on the individual platform.

“For the net asset value (NAV) to rise by 10 per cent in the fund, the Sensex should rise by 40 per cent, according to some estimates. Today, the Sensex is at 26,000 — a stupendous rise. I do not know when a 40 per cent rise from this level will happen. Different analysts have different dates for this,” Roy said.

Roy, said that while the life insurer would like to be present in the Ulip segment, the issue is one of timing. Ulip sales have taken a hit since 2010, when the regulator revamped norms by increasing the lock-in period and lowering commissions on their sales.

Ulip sales, which earlier constituted 90 per cent of private life insurers’ overall product portfolios, has fallen sharply to less than 10 per cent of their portfolios. In terms of premium collection, for financial year 2014-15, LIC expects a 10 per cent increase in new business premium collection to meet the budgeted target of ₹1 lakh crore, he said.

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