You will not get much money on policy surrender
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Insurance: There is a bad news for insurance buyers in the country. Now they will not get much money if they surrender their insurance. Recently, IRDA had issued a rule that if the insured surrenders the policy prematurely, he will have to pay the increased amount to the company. However, after protests by insurance companies, the insurance regulatory body IRDAI had to re-implement the old rule. It is being told that IRDA has combined six rules into a unified framework under the Insurance Products Regulation, 2024. Its objective is to enable insurance companies to respond quickly to emerging market demands, improve ease of doing business and promote insurance.
New rule will come into effect from April 1
The Insurance Regulatory and Development Authority of India (IRDAI) said in a statement that these rules promote better practices in product design and pricing. This includes strengthening the rules related to guaranteed value on policy return and special return value. It also ensures that insurers adopt concrete activities for effective monitoring and due diligence. These rules will come into effect from April 1, 2024. These stipulate that if the policy is returned or refunded within three years of purchase, the return value is likely to be the same or even less. It says that policies which are surrendered from the fourth to the seventh year may see a slight increase in their withdrawal value.
Also Read: LIC made waves all over the world, emerged as the world’s strongest insurance brand.
Eight principles approved
Return value in insurance refers to the amount paid by insurance companies to the policyholder if he terminates the policy before its maturity date. If the policyholder ‘surrenders’ during the policy term, the earnings and savings portion is paid to him. IRDAI, in its meeting held on March 19, approved eight principle-based unified rules after a comprehensive review of the regulatory framework for the insurance sector. These rules cover aspects such as protection of policyholders’ interests, rural and social sector responsibilities, electronic insurance markets, insurance products and operation of overseas reinsurance branches as well as registration, assessment of insurance risks and premiums, finance, investment and company governance. Important areas are covered. IRDAI said in the statement that this is an important step in the regulatory system. In this, 34 rules have been changed with six rules. Besides, two new rules have been brought for clarity in the regulatory scenario. It said that this step has been taken after extensive consultations with various stakeholders including the insurance industry, experts and the public. ,language input,
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