C S C _ V L E T R A I N I N G

Variable Insurance Products

A Variable Insurance Product (VIP) is a

type of Product segment.
Notes by Student
Apart from offering life insurance cover,
VIP is characterized by a policy account for
each policy, whose balance depicts the
accrual to the policyholder.
This policy account is credited with
premium, net of all charges, as and when
paid by the policyholder.
The Variable Insurance Product offers a
minimum guaranteed interest rate, which is
known as Minimum Floor Rate and shall
be applicable to the balance of the policy
account.
The statement of policy account is to be
sent to the policyholder once in a year.
IRDA has now permitted that VIPs can be
offered both under Linked and Non-
Linked Product categories.
 Training of VLE -
THE LOREM IPSUMS
Advantages of Variable
Insurance Products
1) Transparency: All the
charges levied from the
premiums are disclosed to
the customer and the
Policy Account Value is
separately maintained for
each policy and periodic
information on the
balance in the Policy
Account is informed to
the policy holder.
2) Offers both Life
Insurance Cover and
Maturity Benefit.
3) Offers Guaranteed Non-
Zero positive Interest rate
on balance in the Policy
Account.
4) Flexibility such as partial
withdrawals.
5) No surrender charges
after five years from
commencement of Policy
Variable Insurance SUMMER 2016
Benefits under Variable
Insurance Products
Death Benefit:
i) The Sum Assured as
agreed in the policy
plus the balance in the
policy account
OR
ii) The Sum assured as
agreed in the policy or
the balance in the
policy account,
whichever is higher.
Maturity Benefit:
Equal to the balance in the
policy account together with a
terminal bonus, if any as
applicable in case of Non-
Linked VIP.
In case of Linked VIP the
maturity benefit is equal to
balance in the policy account.