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Informist, Monday, Aug. 3, 2026

NEW DELHI – Over the last five years, there has been a sharp rise in life insurance policyholders surrendering and withdrawing their policies, Minister of State for Finance Pankaj Chaudhary said Monday in a written reply to a question in the Lok Sabha. "Surrender and withdrawals as a share of the total benefits paid by life insurers have increased from 32% in 2021-22 (Apr-Mar) to 39% in FY26," he said.

In FY23 and FY24, the surrender and withdrawals as a share of the total benefits paid by life insurers had crossed 40%, while in FY24 it was 37%, Chaudhary said. The proportion of maturity benefits in total benefits paid by life insurance companies has decreased to 37% in FY26 from 48% in FY22, he added.

Policy surrenders and early exits are because of lack of suitability of the product, lack of affordability of premium, mis-selling, lack of policyholder awareness, and changes in the financial circumstances of policyholders, the minister said. "Insurance Regulatory and Development Authority continuously monitors trends relating to policy surrenders, withdrawals and persistency to assess their implications for insurers' financial soundness, policyholder protection and the overall stability of the insurance sector," he said.  End

Reported by Sagar Sen

Edited by Akul Nishant Akhoury

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