Policy Surrender - FAQs

Policy surrender is termination or cancellation of a life insurance policy before the end of the policy term or the policy maturity date. On policy surrender, policy benefits such as the life insurance cover immediately stops, and a surrender cash value (if applicable) is paid post deduction of charges/applicable taxes based on the number of premiums paid and the terms & condition of the product.

Life insurance policies other than a pure protection or term policies have a savings component and a life cover component. By paying regular premiums the policyholder is able to build a corpus to meet their long-term financial goals by taking advantage of the principle of compounding whilst having the security of protecting the family with a life cover. Thus, it is in the interest of the policyholder to continue paying the premiums till the end of the premium payment term to secure full protection and get the complete maturity benefits of the policy.

Life insurance plans offer various features such as loan against policy (Savings/Endowment Policies), partial withdrawal (ULIP Policies) and features like Cover Continuation Option (certain types of ULIP Policies), through which the policyholder can continue to enjoy all the policy benefits and life cover without paying any future premium. You can restart premium payment any time. These features are designed to help the policyholder sustain the policy till maturity whilst availing of liquidity to meet emergency financial requirements or manage their premium payments in the event of any short-term cash flow challenges.

A feature called 2-year extension is also available in most of our plans. This feature enables you to keep your policy active and provides you with the option to renew your policy within 2 years of your last premium due date.

Surrendering your life insurance policy and redeeming the policy value for meeting your financial needs is not advisable unless you have no other option. Apart from providing you with life cover to protect your loved ones, life insurance policies also help you to meet your long-term financial goals such as your children’s education, purchase of any asset or accumulating your retirement savings by growing your money based on the power of compounding

Here are 4 things that you should keep in mind before you decide to surrender your policy:

  1. Putting your loved ones at risk:
    By surrendering your policy, you are likely to put your loved ones at risk should something happen to you after the policy is cancelled. You must make sure you have adequate life cover and savings before you surrender your policy as else your loved ones’ may then have to dip into existing savings to meet their financial needs, which could have been at least partially taken care of by the death benefit payable in a life insurance policy.
  2. Loss of opportunity for long-term wealth creation:
    Life insurance policies are designed to give you long-term benefits, based on the principle of power of compounding, thus when you surrender your policy, you not only lose the opportunity to grow your savings but also lose benefits like bonuses or wealth boosters* (applicable for specific products) that get added to your policy as a reward for staying invested.
  3. Loss of value:
    When you surrender a policy prior to maturity you are likely to get a lower amount than the total premiums you would have paid. This is because all the benefits get added to your policy only when you stay invested till the end. Even according to the power of compounding principle, the last few years are most critical for growing your savings. When you surrender your policy, you lose the amount of money you could have made by saving regularly and staying invested. The policy surrender value may also be subject to tax deductions or charges, which means you may get a much lesser amount than what you would expect. You also end up giving up your annual tax exemption benefits for renewal premiums, under Section 80C or applicable laws issued from time to time.
  4. Risk of paying higher premiums or not being eligible for purchasing a new life insurance policy:
    A charge for providing life insurance cover (mortality charge) is deducted from your policy premium. This charge is linked to your age and health. As you grow older you end up paying higher mortality charges and a higher premium in case of any health conditions. This means you pay lower insurance cover charge when you are younger and likely to be healthier. As your age increases you will need to pay higher mortality charges and higher premiums based on your health. Also, there is always the likelihood of not being eligible to buy a new life insurance policy due to chronic and acute health conditions or co-morbidities.
    However, we do understand that there are certain extraordinary situations where surrendering your life insurance policy may be the only option available to you. Before you decide to surrender your policy, it is recommended that you speak to our Life Insurance Expert. Our Life Insurance Expert will guide you on the policy benefits you stand to lose and the risks of surrendering your life insurance policy and advise you of alternate options which may help with your immediate financial requirements. This conversation will help you make an informed decision.
    Surrendering a life insurance policy is a very significant decision. We strongly recommend that you continue with your life insurance policy and avail your life cover and policy benefits to meet your long-term financial goals.
    Speak to our Life Insurance Expert today on 1860 266 7766 (Help us to serve you better by calling us from your registered mobile number)

To ensure continued protection and security of your loved ones we strongly recommend you stay invested in the policy till the end of the policy term. However, we do understand that you may have an emergency requirement and thus you may not have any other option but to surrender your policy.

Our customer service officer in our Call Center or Branch will guide you on the process you need to follow to surrender your policy.

Documents required for policy surrender

  • Photo Identity Proof (Any 1 Passport, Aadhar with the 8 digits masked), Driving License, Voter ID card, Job card issued by NREGA)
  • Copy of cancelled cheque (with your name pre-printed) or last 3 months updated Bank Statement/passbook of bank account in which you wish to receive your payout

Documents need to be submitted at any ICICI Prudential Life Insurance branch.

Please note:

  • In case you are unable to visit our branch, you can submit your request through a third party. It is mandatory to provide an authorisation letter authorising a third party to surrender on behalf of the proposer, your policy kit and duly signed surrender form will also be required
  • NRI customers wanting payment in an NRE account will have to submit the Proof of premium payment made from the NRE bank account (bank statement of NRE bank account)

Additional documents may be required for customers holding policies under MWPA, Keyman or policies that are assigned to someone. For details of the documents required please call our call centre on 1860 266 7766 (Help us to serve you better by calling us from your registered mobile number) or visit the nearest branch

Life insurance policies that have a saving or investment component, are usually policies that can be surrendered. The table below will give details of the type of policies that can be surrendered and the benefits you would lose by surrendering your policy.

Product category Surrender value Benefits you lose when you surrender
Term plan
  • Not applicable
  • _
    Term plan with single premium, limited premium and return of premium
  • Surrender value depends on the policy term and premium already paid and details of the same are available in the Policy Document.
  • Loss of life insurance cover
  • Risk of paying higher premium due to increasing age
  • Risk of not being able to get a new policy due to health conditions.
  • Annuity plan
  • Surrender value is significantly lower than the purchase price and is paid only in exceptional scenarios mentioned in the Policy Document
  • Lose your guaranteed lifelong income.
  • Loss of value as surrender value paid is lower that purchase price paid to get the plan
  • Endowment plan
  • Surrender value is computed based on the number of premiums paid, benefits received, guaranteed sum assured etc.
  • Details are available in the Policy Document
  • Loss of life insurance cover
  • Loss of opportunity of wealth creation for long-term goals based on the power of compounding.
  • Loss of value in terms of bonuses, additions, income (as applicable) that would have been added to your policy
  • Risk of paying higher premium due to increasing age
  • Unit Linked Insurance Plan (ULIP)
  • Surrender value is equal to policy fund value post deductions of charges, if any
    (as applicable)
  • Surrender value can be paid only after a 5 year lock-in period from policy start date
  • Loss of life insurance cover
  • Loss of opportunity of wealth creation for long-term goals based on the power of compounding.
  • Loss of opportunity to grow your funds with market linked returns
  • Loss of value in terms of loyalty benefits like wealth boosters*, return of charges (as applicable) etc that get added to your policy over a period of time
  • You can call us on 1860 266 7766 (Help us to serve you better by calling us from your registered mobile number) or visit a branch to check your policy surrender value. You can also refer to your policy kit for details.
    Once we receive your request, we have a robust request verification process to ensure your financial interest is protected. This takes about 2 working days. This process has been put in place, to ensure that you make an informed decision and are completely aware of all the benefits you will be losing and alternate options that you have. We also check your documents and bank details if there is any kind of mismatch in the name, address proof and bank account details; we may contact you for additional documents. After we have verified the request, we process the payout into your bank account within 2 working days.


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    ~ Guaranteed benefits are payable subject to all due premiums being paid and the policy being in force on the date of maturity.

    ` Life Cover is the benefit payable on the death of the life assured.

    `* Wealth Boosters equal to 3.25% of the average of the Fund Values including Top-up Fund Value, if any, on the last business day of the last eight policy quarters will be allocated as extra units to your policy at the end of every 5th policy year starting from the end of the 10th policy year till the end of your policy term.

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