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How to Surrender IndiaFirst Life Insurance Policy?
IndiaFirst Life Insurance is one of India’s largest life insurance providers. However, life insurance is a long-term investment, and there are some unforeseen circumstances when a policyholder has to give up their policy before the selected policy term. In that case, the insurer pays the surrender value, and the coverage gets terminated.
Remember that the amount policyholders get after opting out of the policy is proportionately lower than the total premium paid. The IndiaFirst surrender value can be estimated only after policyholders have continuously paid premiums for three years.
Are Policyholders Allowed to Surrender IndiaFirst Policy?
When it comes to surrendering the policy, specific rules apply. Each policy has its terms and conditions, so it's advisable to read them thoroughly before making final decisions. The period for surrendering a policy may vary from one plan to another based on policy tenure and premium payment. Here is the average period to surrender an IndiaFirst policy:
Under Single Premium Plan
A single premium insurance plan is a special plan where an insured person has to pay the entire premium once at the time of buying the policy. If you're a single premium plan policyholder, you can surrender your policy at least two years after the policy issue date.
Under Limited Period and Regular Premium Plan
There are differences in the terms and conditions of policies under limited period and regular premium plans. The following general details are provided:
- The policy surrender period is two years if the policy term is ten years or less.
- If the policy term is more than ten years, the minimum surrender period is three years.
Steps to Complete the Surrender Process
To surrender your IndiaFirst Life Insurance Policy, follow the steps mentioned below:
- Reach out to an IndiaFirst Life Insurance customer representative or visit the insurer's official website to download the surrender form.
- You can also request a copy of the surrender form from the nearest branch office.
- Thoroughly understand the implications of surrendering your policy, such as the coverage amount, surrender value, deductions, etc.
- Fill out the necessary details in the form with accurate information.
- This may include the insured person's name, address, contact details, and a written reason for discontinuing the policy. Sign the form to certify your agreement to surrender the policy.
- Once policyholders fill out the form, attach the required documents and the surrender form, then submit it to the nearest IndiaFirst Life Insurance branch or mail it to the designated address.
- After submitting the surrender form, you can follow up on the status of your request via the IndiaFirst Life Insurance Customer Service Helpline or by visiting the branch office.
Documents Required for Surrendering IndiaFirst Policy
It is generally not advisable to surrender the policy. If a policyholder decides to surrender their life insurance policy, the following documents are required:
- Original IndiaFirst Policy documents.
- Cancelled cheque from the policyholder's registered bank.
- Government-issued ID proof such as PAN Card, Driver's License, Aadhaar Card, Voter ID card, or Passport.
- Bank Account Details
- NRE bank statement showing premiums paid from the NRE account.
Types of Surrender in IndiaFirst Policy
There are two types of surrender values in life insurance plans - guaranteed surrender value and special surrender value.
Guaranteed Surrender Value
Policyholders must pay premiums for at least three consecutive years to avail of the guaranteed surrender value. This value typically makes up 30% of the premiums paid for the plan. Additionally, it does not include the first-year premium, any additional fees for riders, or any bonuses received.
For instance, if a policyholder paid ₹60,000 (₹20,000 per year x 3) for the initial three years for a sum assured of ₹6 lakh, the minimum surrender value received would be 30% of ₹40,000 (excluding the first year's premium), which is ₹12,000.
Special Surrender Value
First, to understand this, you need to know what the paid-up value is. If the policyholder stops paying premiums after a specific period, the policy would still be in effect but with a smaller sum assured, known as the paid-up value.
The paid-up value is calculated by multiplying the original sum assured by the ratio of the number of premiums paid to the total number of premiums payable.
When you surrender a policy, you receive a special surrender value, which is determined by adding the paid-up value and any accrued bonuses, then multiplying the result by the surrender value factor.
