Allowing your life insurance policy to lapse carries a very high cost

You will lose out on the cover, pay a surrender charge, and usually end up paying a higher premium when you buy a new policy

 The persistency ratio within the life insurance industry continues to be low, according to data published in the Handbook on Indian Insurance Statistics for financial year 2020-21. The median 61-month persistency figure for the industry for FY2020-21 stood at 39.4 per cent. This figure has remained in the thirties since 2016-17.

Persistency ratio tells us what percentage of an insurer’s policies are still in force after a certain period of time, say, one, three, four or five years. This figure should be looked up before selecting an insurer. Satisfied customers tend to stay with an insurer for a longer time.