Aiming to renovate life cover design, the Insurance Regulatory & Development Authority (IRDA) has announced a new set of guidelines for linked as well as non-linked insurance products.

The seven-page document aims a virtual overhaul of the insurance sector by making a number of proposals such as linked plans should be offered only under individual non-par products like ULIP (unit linked insurance plans) and variable linked plans.

The draft also says that all linked insurance plans should offer a minimum death benefit equal to the guaranteed minimum sum assured to the subscriber plus the balance in the policy account or unit fund; and that loans should not be offers under the linked insurance plans.

The draft also outlines guaranteed interest rate and variable interest rate that are directly linked to the performance of approved external benchmark or index.

Life insurers have been asked to submit their comments and views on the proposals by 30th of October.

Separately, the Department of Financial Services of the Ministry of Finance has invited applications for the post of Chairperson of IRDA.

The position will become vacant on in February 2013.

The new chairperson will be appointed for a maximum term of five years or up to age of 65 years, whichever is earlier. In pay and perks, the chairperson will pocket Rs 3.75 lakh per month without the facility of car and house.