Life insurance surrender and withdrawal payouts accounted for 39 per cent of benefits in 2025-26, surpassing maturity payouts and signalling weak policy retention
A rise in early exits reflects challenges including unsuitable products, high premiums, mis-selling, and limited understanding of insurance policies among customers
The insurance sector’s success should not be measured only by policies sold. Long-term customer retention is essential for delivering promised protection and savings
Regulatory measures such as salesperson tracking, stronger grievance mechanisms, and intermediary reforms can improve transparency and strengthen consumer confidence
Insurers need better suitability checks, simpler products, clearer disclosures, and stronger post-sale services to encourage policyholders to stay invested
India’s insurance industry must prioritise policy persistency over expansion alone, ensuring customers receive the long-term benefits insurance is designed to provide