 "Life insurance")
According to media reports, over 23 million life insurance policies were surrendered by policyholders in 2021-22, three times the number surrendered in the previous financial year. This happened chiefly due to the financial distress caused by the Covid-19 pandemic. While those were exceptional circumstances, in normal times policyholders should surrender policies after a lot of deliberation.
Lapsed versus surrendered policies
Lapsed policies are those on which you have missed paying a premium or two. It’s possible to revive them by paying the premiums, plus some interest and penalty.
Surrendered policies are those where the insured has requested the insurer to