When does a life insurance policy acquire surrender value?
A regular premium policy acquires surrender value after the policyholder has paid the premiums continuously for three years. If, after paying premiums for three years, you do not wish to continue with the policy, you can convert it into a paid-up one, freezing your investments at that level. However, you need to make sure that you keep track of this policy till it matures. What do policyholders stand to lose when they exit the policy? Once you decide to exit the insurance policy, all the benefits associated with it — including the protection cover — will cease to exist. Therefore, ideally, you should consider terminating the policy only if you believe that you have been sold a policy that does not fulfil your requirements, or the features prove to be different from what was promised to you. Also, if you surrender the policy during the early years of the policy, say three years from its inception, the surrender value will amount to roughly 30 per cent of the premiums paid to date. Also,
