Starting from October 1, 2024, policyholders will benefit from larger refunds when surrendering their life insurance policies. The Insurance Regulatory and Development Authority of India (IRDAI) has introduced new rules requiring insurance companies to offer a special surrender value (SSV), particularly for traditional endowment policies. This change is designed to provide more flexibility and liquidity for policyholders, making life insurance products more accommodating to customer needs.

Larger refunds for early exits

Previously, if a policyholder surrendered their life insurance policy within the first few years, they would typically receive only 50% of the total premiums paid between 4^th and 7^th year if suppose it is 10 year life insurance policy, along with any bonuses accrued. This often resulted in significant financial losses for those exiting their policies early. Under the new guidelines, the special surrender value will provide policyholders with a higher refund.