hyderabad retail investors of unit linked insurance plans or ulips could see a 180 basis point rise in their yields with the insurance regulator irda tweaking the proposed cap on charges which insurers collect from investors it is also set to raise the lockin period for investments in ulips to 5 years from 3 years to promote longterm investments said a senior irda official ulips are akin to mutual fund with an added life coverthe regulator had proposed a cap on all charges last month to ensure higher returns for investors but it has now accepted the insurance industrys demand to exclude mortality and morbidity charges from the overall ceiling mortality charge the cost of providing a life insurance cover is higher for senior citizens compared to younger policy holdersthe change allows insurance companies to continue providing adequate protection to policyholders which is the core objective of a life policy moreover it allows companies to offer older customers the benefits of life insurance without crossing the cap said tr ramachandran ceo md aviva indiathe regulator has also capped fund management charges at 135 basis points for all insurance contracts irrespective of their tenure it has prohibited insurers from levying surrender charges from the fifth yearbesides fund management charges investors pay a host of other charges such as the premium allocation charge administration charge mortality charge and rider charge the difference between the premium payable and total charges is the money available for investment starting october ulip charges will be capped at 300 bps for insurance contracts up to 10 years and 225 bps for contracts over 10 years if a fund earns a yearly return of 15 a policy holder has to get a minimum return of 12 the cap on charges will be on new policies