INSURANCE
Insurance premiums likely to increase as revised surrender value proposed by IRDAI comes into force
Oct-01-2024

Insurance premiums are likely to increase or the commission of agents may see a reduction as the revised surrender value proposed by the sector regulator - the Insurance Regulatory and Development Authority of India (IRDAI) comes into force from October 1, 2024. Recently, the IRDAI introduced revised surrender value guidelines to offer better returns to policyholders exiting early from their life insurance policies.

A surrender value in insurance refers to the amount paid by the insurers to the policyholder upon terminating the policy before its maturity date. If the policyholder surrenders during the policy tenure, the earnings and savings portion will be paid to him or her. The regulator has emphasised the need for insurers to ensure 'reasonableness and value for money' for both exiting and continuing policyholders when determining surrender values. 

Most of the insurance players have readied changes in their policies to meet deadlines. Most of these players have a limited number of policies compared to life insurance behemoth LIC. LIC has a huge task ahead to bring changes in their policies to meet the regulator's dictate.


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