How do I Surrender my Life Insurance Policy?

Life insurance policies like endowment plans and moneyback plans are long term investments. Surrendering a life insurance policy means giving up all the benefits, life cover, and investment value of the policy. Surrendering a life insurance policy early would also mean losing a big part of your investments so far in the plan.

Why Avoid Surrender of Life Insurance Policy?

While the process of surrendering your life insurance policy is short and simple, you should be absolutely certain about the step. Here’s why:

i. Life insurance benefits accumulate over time
ii. Older policies have exponentially better portfolio growth
iii. You lose a big part of your benefits from the policy with an early surrender
iv. The new life insurance plan will be more expensive due to an increase in your age
v. You can take a loan against policy instead of surrendering and losing all future benefits in the case of emergencies

You should always check the surrender value you will receive from the policy. Also, you can borrow up to 90% of this surrender value at nominal rates. Borrowing against the policy ensures that your benefits continue to pile up while you can meet your needs easily.

Process of Surrendering the Policy

After looking at all the alternative solutions, if you find that the policy still needs to be surrendered, here’s what you can do:

1. Make sure the policy is not in the lock-in period. Lock-in period for:

2. Complete the policy surrender form and visit the nearest branch of the insurer to submit the following:

After submitting the application the process takes about 10-15 days to complete and you should receive the surrender value in your account.

Policies you Cannot Surrender

Pure protection life insurance policies such as term insurance plans and critical health insurance do not have a surrender value. Although the term plan with return of premium option, and steady income benefit will have a surrender value.

In the case of single-premium term insurance plan, you may receive part of the prorated premium for the completed duration of the policy.