India 's largest fund house, UTI Mutual Fund, is understood to have filed an application with the Insurance Regulatory Authority of India to launch mutual fund schemes with insurance riders.

"UTI has applied to IRDA via SEBI for getting the approval for this new product. This should be a new trend in the market," a leading Mumbai-based insurance broker told mediapersons.

However, when contacted, UTI Asset Management Company managing director and CEO U K Sinha said, "I do not think we are planning to do anything of that sort as of now. But I have a team that creates ideas. May be one of my young team members has come up with an innovation."

According to the sources, those insured under this product will have to pay low premiums, since they come under group insurance. The group, named "affinity group", will have to pay only one-tenth or one-fifteenth of the usual premium.

UTI will not keep the premiums with itself, but transfer it to the company it bought the insurance rider from. The schemes will also bear some lock-in period, sources added.

Unit Trust of India is already present in the life insurance sector with their unit linked insurance policy and had revealed its plans to widen its base of 17.5 lakh customers.

(www.zeenews.com)