Insurance Policy Surrender: A big change has been made in the rules regarding Life Insurance Policy. Now, you will get more money than before when surrendering the policy. Insurance sector regulator IRDAI will implement these new rules from October 1. Now, insurance companies must give a special surrender value to the policy. Due to this, you will be able to surrender the policy easily and get a refund. Also, it will be easy for you to change the plan. Let’s try understanding how the changing rules from October 1 will benefit you.
Refund Will Have To Be Given Even If The Policy Is Surrendered In The First Year
According to the new Special Surrender Value rules, the policyholder must be refunded even if the policy is surrendered in the first year. IRDAI has instructed all insurance companies to give the benefit of these rules on all endowment policies. Many companies, including LIC, had demanded to change them.
According to the circular issued by IRDAI on June 12, all insurance companies will have to improve the special surrender value. It will show how much premium you have paid and what benefit you will get from it. The special surrender value will also be reviewed every year.
More Money Will Be Available Under Special Surrender Value Rules
According to the Economic Times report earlier, the rule was that if the policy were surrendered within 4 to 7 years, you would be paid 50 per cent of the premium. According to the analysis, if you spent a premium of Rs 2 lakh and surrendered the policy in 4 years, you would get back about Rs 1.2 lakh. But now, according to the special surrender value rules, you will get back up to Rs 1.55 lakh.
The Insurance Company Will Also Have To Provide Information About The Special Surrender Value
Until now, if you surrender the policy within a year, you do not get anything back from the premium. But, according to the rules implemented from October 1, you will get a refund. For example, if you took a policy for 10 years and paid a premium of Rs 50,000. But, for some reason, you had to discontinue the policy in the first year, so your Rs 50,000 would have been lost. However, under the new rules of IRDAI, you will get back up to Rs 31295. While giving the policy, the insurance company must also provide information about the special surrender value.
