IRDAI’s diktat: Life insurance policyholders to get higher special surrender payouts on early exit from endowment plans

Despite life insurers' objections, IRDAI has maintained most provisions for higher special surrender value (SSV) for endowment policies, aiming to benefit policyholders who exit early due to mis-selling or premium payment issues. \r

The increased SSV ensures partial premium refunds for early exits, a significant change from the previous regime where entire premiums were forfeited after year one. The SSV is now mandated to be at least the present value of the paid-up sum assured and future benefits, with a maximum spread of 50 basis points over the 10-year G-Sec yield for discounting. \r

However, insurers express disappointment, citing increased reserving and capital requirements due to the change.