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The proposed regulations will allow banks to join hands with more than one insurer, but it is subject to the area-wise segmentation laid out in the draft guidelines.

While the final regulations could take a very different shape, the fact remains that the flexibility to banks will certainly improve, resulting in more choices for the customers.

Pension Ulips Set For A Comeback

The revised guidelines on pension Ulips have come into effect from December 31. While products are yet to be filed under the new regime, life insurers seem to be fine with the new rules. Agents were pushing pension Ulips aggressively before September 2010. In 2011 though, very few companies launched these products under the new regime. Now, however, insurance-seekers keen on buying pension Ulips can look forward to the revival of such products this year.

Online On A Roll

The trend of selling term polices online took root in 2010 and branched out to many more companies in 2011. The unique selling point of these products is that they are much cheaper than their offline counterparts. We expect that internet sales as a channel will gain further momentum and will help increase the protection penetration as well as branching into health and savings products being introduced through that channel. Also, with Irda bringing out guidelines to regulate web aggregators customers can hope for better services.

Policies To Go Demat

In 2011, Irda gave a go-ahead to converting physical policies into the electronic form. By April 2012, this initiative could take concrete shape for life insurance policies. The key benefit, of course, will be convenience — both in terms of maintaining the documents and making changes when required. Also, the policyholders will not have to furnish details every time they buy a policy.

DTC Impact

For years, many a life policy has been sold on the basis of its tax saving ability — premium paid of up to . 1 lakh is allowed as deduction under Section 80C of the Income Tax Act. Come April 2012, however, things could change with the proposed implementation of the Direct Tax Code (DTC). Here, life and health insurance premium, along with children's tuition fees, are clubbed together, and the combined tax benefits amount to a maximum of . 50,000. This apart, you will not be eligible for the deduction if the annual life premium exceeds 5% of the sum assured in any year. While this spells bad news for insurance cum-investment policies, those opting for pure protection term covers need not worry. Besides being the cheapest life policies, most, subject to your age and health, are also likely to adhere to premium-to-SA ratio.

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