Life insurance policyholders will now get higher special surrender payouts on early exit

IRDAI has upheld proposals for higher Special Surrender Values (SSV) for endowment policies despite insurers' concerns, as reported by Moneycontrol. SSVs are payouts for premature policy exits, which will now be more substantial. Insurers like HDFC Life anticipate a marginal impact on new business margins (NBM) but affirm their ability to manage it without compromising customer value. \r

The regulation aims to significantly benefit policyholders who surrender early. However, insurers argue these products focus on long-term goals, not liquidity, and suggest alternatives like full premium refunds for mis-selling cases. \r

IRDAI also mandates Customer Information Sheets for life insurers, akin to health and general insurers, simplifying policy details. It permits new product designs and imposes stricter penalties for customer grievances.