Policyholders can surrender their policies if they have paid the premiums for three or five consecutive years from inception (For new ULIP policies, IRDA has increased the lock-in period from three years to five years). If policyholder fails to pay premiums for at least three or five consecutive years from inception then he/she may not be entitled to get surrender value or paid-up value.
Surrender Value: It is the amount received by policyholder after surrendering a policy.
Procedure to Surrender a Policy
- To surrender an insurance policy visit nearest branch of your insurance company and ask for policy withdrawal form. You may need to submit your identity proof, bank passbook, latest contact details along with original policy documents.
- Don’t forget to collect receipt from your insurer for future reference.
- To save your precious time, you can download policy surrender form from your insurer’s website. Nowadays, many insurers are providing online facilitates to buy insurance policies and to pay premiums; therefore, you may also visit your insurer’s website to find out if he (insurer) is offering online policy surrender facility.
Suggestion: It’s best to talk to an expert or friend before surrendering a policy; because insurance policies are designed to provide benefits at the time of maturity.