mumbai life insurers will have to rework traditional products before march 31 to comply with changes introduced in the budget for policyholders to claim tax deductions about 2530 of insurance products with premiums less than 10 of the sum assured will have to be refiled with the insurance regulator as per industry estimates also see budget at et budget 2012 union budget live union budget blog railway budget budget news economic survey of india the budget has proposed that insurance will be eligible for tax exemption when the premium paid is at least 10 of the sum assured we are assessing our products estimate is that some 25 to 30 products will have to be refiled said amitabh chaudhry managing director and ceo hdfc life at present premium paid on life insurance policies allow tax deduction if the sum assured is at least five times the annual premium maturity proceeds too are taxfree therefore deduction of up to rs1 lakh under section 80c will be available to policies with a life cover of 10 times the annual premium the same eligibility criterion 10 of sum assured is proposed to be applied on exemption under section 10 10d on any sum received from life insurance policy said vivek mathur chief financial officer tata aig life insurance it is in line with expectations and products will continue to be designed in line with the tax benefit to policyholders he said the changes in guidelines have come at a time when insurers are banking on traditional products for growth there is already a vacuum in the system as there are no pension products available on the unitlinked platform also the commission paid on traditional products is as high as 35 of the premium amount while ulips offer hardly 7 to 8 rajesh sud managing director and ceo max new york life said while this is consistent with the life insurance industry thought it is a substantial change to be implemented in such a short time frame volatility in the stock markets and slowdown in the economy have hit sales of life insurance policies during apriljanuary the industry had reported a 1421 decline in new business premium income according to the latest data from insurance regulatory and development authority the industry collected new business of rs81496 crore in the 10 months to january stateowned life insurance corporation saw a 12 drop in new life business private sector industry saw a 197 drop in income during the period