The rules will change from tomorrow
New guidelines related to surrender of insurance policy are going to come into effect from Tuesday, October 1. It is believed that due to the new rule, insurance premium may increase or the commission received by insurance agents may reduce. Earlier this year, the Insurance Regulatory and Development Authority of India (IRDAI) had introduced revised guidelines on ‘surrender value’ to provide better returns to policyholders who opt for early exit from their life insurance policies.
Surrender value is given by the company to the policyholder.
‘Surrender value’ in insurance means the amount that is given by the insurance company to the policyholder if the policy is surrendered before the maturity date of the policy. If a policyholder decides to surrender the policy before it matures, he will be given a share of the income and savings. IRDAI has stressed the need for insurance companies to ensure ‘fairness and value for both the person exiting the policy and the continuing policyholders’ while deciding the amount to be returned at the time of ‘surrender’.
Premiums will be expensive or agents’ commission will be less.
A senior official of a private sector insurance company said that to compensate for the ‘surrender’ value revised by IRDAI, life insurance companies will either increase the premium amount i.e. make the premium expensive or will cut the commission paid to their agents. Gaurav Dixit, Director, CareAge Ratings, said, “Significant changes may be seen in the insurance product and commission structure. This will lead to fluctuations in premiums in the second half of the current financial year (from October 1, 2024 to March 31, 2025). Can get.”
Compared to LIC, other companies have much less policies.
Most insurance companies have made preparations to change their policies to start following these new rules. Most of these companies have a much limited number of policies compared to life insurance giant LIC. At the same time, a huge task has to be done by changing its policies to comply with the new rules of LIC.
Latest Business News
