Calcutta, March 13: Unit-linked plans are the latest rage in the life insurance industry. The Insurance Development and Regulatory Authority?s (IRDA) statistics of linked and non-linked schemes reinforces the skewed growth in favour of linked plans.

For the 10 months ended January 31, the premium underwritten under linked categories was Rs 3,871 crore against Rs 700 crore in the corresponding period of the previous year, reflecting a growth of 453 per cent. In contrast, the non-linked insurance premium underwritten for the same period was Rs 11,147 crore against Rs 10,427 crore in the corresponding period of the previous year, a growth of 7 per cent.

Keeping in mind the growing popularity of unit-linked products and worried about the masquerading of such polices as investment products, IRDA has decided to frame new policies for them.

T. K. Banerjee, member (life) of IRDA, said, ?We are concerned about the rampant misuse of unit-linked products. These are touted as investment products and are being sold as short-term instruments.?

He said this beats the whole essence of insurance policies, which cater to long-term risk protection and savings needs of an individual. ?We have invited comments from insurance companies within a month, after which we will come out with draft guidelines and attempt to obtain a consensus among industry participants,? said Banerjee.

The authority is concerned that some firms are not adequately highlighting the risks associated with the product. The IRDA guidelines are aimed at linking the sum assured to a multiple of the premium contribution.

Currently, an investor can put in huge premiums that may be disproportionate to the sum assured.