Life insurance firms likely to see strong growth in non-linked policies

Industry preps for regulator's new norm asking companies to pay special surrender value to customers

Life insurance companies are likely to see strong growth in the sale of non-linked policies in the near term, driven by regulatory changes and expectation of a pivot in the interest rate cycle.

In June, the insurance regulator introduced norms to ensure better payouts for customers who exit their policies prematurely. The insurance industry has to implement the new norms by September 30, 2024. Non-linked or traditional policies are not linked to the market.

Life insurance companies would have to pay a special surrender value (SSV) after the completion of the first policy year, provided the customer