Annuitants Could Invest In The Stockmarket

Tags: IRDA,  Insurance Regulatory and Development Authority, IRDA India,

The Insurance Regulatory and Development Authority (Irda) set up a committee this month to examine the current status of annuity products and the steps needed to introduce variable annuities in India. The committee is scheduled to submit its report by 31 January 2010.

Currently, annuity products invest only in debt products and investors get a fixed rate of return. With variable annuity, investors would be able to participate in the stockmarkets to keep growing their retirement corpus. The rate of interest, however, is not fixed in variable annuity products.

In light of the population growth and the need for a proper pension system, the variable annuity business has tremendous potential in India. Globally, countries are moving towards variable annuity products as they give flexibility to insurers and address most investor-related issues.