Consider loss of cover, deductions before surrendering life insurance plan

If your income is likely to revive soon, consider taking a loan against the policy instead of surrendering it

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