By Admin 
There is good news for customers who leave the policies of LIC and other insurance companies in the middle. IRDAI (Insurance Regulatory Authority of India) has made a big change in the rules of surrender value. Under the new rules implemented from 1 October 2024, now policyholders will get back 20-30 percent more than before.
What is a surrender value?
When a person stops his life insurance policy before maturity, the amount that the insurance company returns to him is called a surrender value. This amount depends on how many years you have filled the premium and what kind of policy you took.
What are the changes in the new rules?
IRDAI has made many important changes in the rules related to the surrender value. Now special surrender value (SSV) will be applicable on all endowment policies. This means that now customers will get more money than before surrendering the policy. Nothing was available for surrendering for the first two years, but now after one year, partial amount will be returned.
How much money will you get?
Under the new rules, the surrender value will now be calculated in a new way. If you have filled the premium for 4 years and surrender the policy, then out of the first 4 lakhs, 2.4 lakhs were available, but now you will get up to Rs 3.1 lakh. At the same time, if you have filled only 1 year premium, then nothing was available earlier, but now you can get back up to Rs 62,000 out of 1 lakh.
How will the surrender value be calculated?
IRDAI has set a new formula to calculate the surrender value. Now the interest rate of 10 years government bonds will be made the basis. Insurance companies can add a maximum of 0.50 percent. This new method will also apply to single premium and policies with a duration of 5 years.
What to do if you want to surrender the policy?
If you want to surrender your policy, first go to LIC’s official website and use the surrender value calculator. After this, submit the form 5074 in your nearest LIC branch. Keep in mind that you have to take all your KYC documents and policy details.
Which policies will apply to the new rules?
It is important to know that these new rules will be applicable only to the new policies issued after 1 October 2024. The earlier rules will still be applicable on old policies. Therefore, if your policy is old then you will not get the benefit of new rules.
Why these changes were made?
The main objective of IRDAI is to protect the interests of insurance customers. Earlier many customers had to suffer heavy losses on surrendering the policy. The new rules will increase transparency and customers will get the right information. Now while purchasing the policy, customers will be told that if they leave the policy in the middle, then they will get how much money they will get back.
If you are thinking of surrendering your policy, first contact your LIC agent and get complete information about new rules. If possible, instead of surrendering the policy, select the option to pay it (limited payment), so that you can get some benefits in future.
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