By BS Reporter
Pension products, which were absent from the life insurance sector for the past few quarters, are back to the market. HDFC Standard Life Insurance is among the first to launch a pension product based on the new guidelines for pension schemes. The company will launch the product on Monday.
According to private life insurers, other players in the segment are likely to follow suit and launch products. Apart from HDFC Life, several other private life insurance companies have also filed their product with the insurance regulator.
Currently, Life Insurance Corporation of India (LIC) is the only player that offers pension products in the market.
In January this year, the Insurance Regulatory and Development Authority (Irda) had said that pension products will have to guarantee an assured benefit in the form of a non-zero rate of return, which would be disclosed upfront. Before this, insurers were required to give a 4.5 per cent guarantee on pension products.
The new regulations in January led to slower approvals of pension products, as a result of which there has been a dearth of products in the market. Experts say pension products, which used to be 25 per cent of the insurance industry, are now down to 1 per cent.
Irda chairman J Hari Narayan had recently said that the products pending with the regulator for approval were mutual fund products and not pension products. “Just because an insurer names a product as pension, it does not mean that it serves the purpose of a pension product. A pension product, invariably, should lead to some kind of an annuity and unless they are structured accordingly, they will not be approved,” he had said.