Non-linked insurance plan: Surrender or stay? Do the math before deciding

The new norms contained in IRDAI's exposure draft, if implemented, will make surrendering less painful

The Insurance and Regulatory Development Authority of India (Irdai) has issued an exposure draft on the surrender value of non-linked insurance policies. These rules, if implemented, will make it less painful for customers to 

surrender a policy they don’t wish to continue with.

Issue with current norms

Currently, if a customer surrenders a non-linked, regular premium plan before having paid two premiums, he doesn’t get any money back. He gets 30 per cent of the total premium back if he surrenders after paying two premiums, 35 per cent after paying three premiums, and so on.

“If by mistake you have bought a plan which