The last five years have been very challenging for life insurance companies, with premiums declining from 4.6% of the GDP in 2010 to an estimated 2.7% in 2013, which is close to 2005 levels. Insurance penetration rose between 2006 and 2010 because of a rapid rise in sales of unit-linked products, which were sold as a short-term, tax-efficient, mutual-fund-type product, instead of a long-term savings/protection avenue. While a cap on surrender charges and expenses has significantly reduced mis-selling now, the industry is still suffering from high rates of surrenders and policy lapses.
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