Non-linked insurance plan: Surrender or stay? Do the math before deciding
Last Update Date: 06-10-2026
Published by Business Standard
Abhishek Kumar's role: Quoted
Abhishek Kumar said high surrender charges stem from front-loaded intermediary commissions in these policies. He also pointed out that policyholders often hold on because of sunk cost fallacy, even when exiting would serve them better.
More of Abhishek's views on insurance
The article explains an IRDAI exposure draft on surrender values of non-linked insurance policies. Under current norms, buyers who exit early lose much of what they have paid. The draft would add a threshold premium free of surrender charges and allow a surrender value after one premium. Advisers suggest checking the numbers before deciding to stay or exit.
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Non-linked insurance plan: Surrender or stay? Do the math before deciding