Starting today, October 1, a new rule is being implemented in life insurance policies. If you surrender your policy after holding it for a certain period, you will now receive an additional amount known as the Special Surrender Value.
According to IRDAI, the regulatory authority for insurance companies, this change will benefit policyholders who frequently switch policies. As per a circular issued in June, the Special Surrender Value will now include the sum already invested, future benefits, and survival benefits. For instance, under the old rules, if you surrendered a policy worth ₹2 lakh between the 4th and 7th year, you would have received only ₹1.2 lakh. However, under the new rules, you will now receive ₹1.55 lakh. Similarly, in a ₹5 lakh, 10-year policy, if you paid ₹50,000 for one year and then surrendered, you wouldn’t have received anything under the old rules. Now, under the new guidelines, you will get ₹31,295 after one year.
This new rule is designed to help customers who may have taken a policy in haste and later regretted their decision.