Current Affairs · Insurance Regulations

Consider the following statements regarding the technical nuances of Unit Linked Insurance Plans (ULIPs) and their regulatory evolution: Statement 1: Under the current IRDAI regulations applicable in 2025, the minimum death benefit for a ULIP for an individual who enters the policy at an age below 45 years must be at least 7 times the annual premium, but most insurers have standardized it at 10 times to ensure that the policy proceeds remain tax-exempt under Section 10(10D) of the Income Tax Act provided the annual premium does not exceed 2.5 lakh rupees. Statement 2: The lock-in period for all ULIP products is 5 years, and if a policyholder decides to discontinue the policy during this period, the fund value is transferred to a Discontinued Policy Fund which earns a minimum guaranteed interest rate of 4% per annum as per the latest circular, and the insurance cover ceases immediately upon the fund transfer. Statement 3: ULIPs offer various fund options ranging from pure equity to pure debt, and the 'Switching' facility allows a policyholder to move their accumulated wealth between these funds usually without any tax implications under the current Indian tax laws, providing a significant advantage over mutual funds where every switch might be treated as a redemption and a fresh purchase. Statement 4: In 2024 and 2025, the IRDAI introduced the 'Partial Withdrawal' flexibility where a policyholder can withdraw a portion of their fund after the fifth year for specific needs like critical illness treatment or higher education, and these withdrawals are now permitted even if the policy is in a lapsed state provided the fund value is above a certain threshold. Which of the following options correctly identifies the validity of the statements provided above?