Upon surrendering the policy, you cannot avail of the tax benefits on premium payments anymore.An insurance plan can be terminated for cash, only after you have paid a regular premium for a specified time, generally 3 years.When you surrender a policy, the insurance component holds no more, and the dues are paid after deducting the surrender fees, which is charged by the insurance company on premature termination of insurance policies.Surrender value is only available for policies that have an investment component such as unit-linked insurance plans, endowments plans, etc., and not on term plans or insurance-only plans.This is the accumulated component of the policy until the termination happens.įacts About the Surrender Value of a Policy When the insured exists from an insurance policy before its maturity, the insurance company may choose to pay a specific sum to the insured as per the terms of the policy, which is called as the surrender value of life insurance policy. There may be situations where the insured wishes to terminate the policy due to various reasons such as financial crunch, plans of investment with other policies, etc. Every insurance policy comes with a fixed tenure, during which the insured needs to pay the premium on a regular basis, as per the terms and conditions of the policy.
