Some major changes are going to happen in life insurance industry from October 1, 2013, especially in traditional policies such as Endowment Plans, money-back plans and even ULIP’s.
You will surely have a Life Insurance Corporation (LIC) policy or / any other private sector traditional plans or / might buy them in coming times.
One of the major changes which has happened, is the change in surrender value for policy holders. The rules of surrender value depends on the premium paying term of the policy.
If the premium paying term for policy is less than ten yrs. Then the policy will acquire the surrender value after paying premium for 2 years (earliar it was 3 years), however if the premium paying tenure is more than 10 years , then the surrender value will be acquired only after paying 3 years premium.
In both the cases, the minimum surrender value would be 30 % of the premiums paid without excluding the first year premium. Note that earlier, if you used to surrender after paying 3 premiums, you got 30 % of premiums paid MINUS first year premium, but now as per new rules, the first year premium will not be deducted. Learn everything about LIC policies working before October 1, 2013
Another good change is that, from 4th - 7th year, the minimum surrender value would be 50 % of the premiums paid, and has to reach 90 % of premiums paid in last 2 years of policy paying tenure.
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