Insurance Policy Surrender: A major change has been made in the rules regarding life insurance policy. Now on surrendering the policy you will get more money than before. Insurance sector regulator IRDAI is going to implement these new rules from October 1. Now insurance companies will have to pay special surrender value on the policy. Because of this you will be able to surrender the policy easily and will also get more refund. Besides, it will become easier for you to change your plan. Let us try to understand how the rules which are going to change from October 1 will prove beneficial for 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 will have to pay a refund on surrendering the policy even in the first year. IRDA has instructed all the 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 IRDA on June 12, all insurance companies will have to improve the special surrender value. In this it will be seen how much premium you have paid and what benefit you were going to get on it. The special surrender value will also be reviewed every year.
Will get more money under special surrender value rules
According to the report of Economic Times, earlier the rule was that if the policy is surrendered within 4 to 7 years, then 50 percent of the premium will be paid to you. According to the analysis, if you had paid a premium of Rs 2 lakh and surrendered the policy in 4 years, you would have got back around Rs 1.2 lakh. But now as per 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.
Till now, if you surrender the policy within a year, you do not get anything back of the premium. But, according to the rules which are going to be 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 thousand. But, if for some reason you had to close the policy in the first year itself, you would have lost Rs 50,000. However, under the new rules of IRDAI, you will get back up to Rs 31295. While giving the policy, the insurance company will also have to give information about the special surrender value.
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