Close
Close

Buy a Life Insurance Plan in a few clicks

Now you can buy life insurance plan online.

Kotak e-Term

Protect Your family’s financial future with Kotak e-Term. Know more

Kotak Assured Savings Plan

A plan that offer guaranteed returns and financial protection for your family. Know more

Kotak Guaranteed Savings Plan

A plan that offers long term savings and insurance in one premium. Know more

Kotak e-Invest

Insurance and investment in one plan with Kotak e-Invest. Know more

Kotak Lifetime Income Plan

Retirement years are the golden years of life. Know more

Close

Get a Call

Enter your contact details below and we will get in touch with you at the earliest.

  • Select your Query

Thank you

Our representative will get in touch with you at the earliest.

Why Surrendering Your Term Plan Policy In The Final Phase Maybe A Bad Idea?

Surrendering an insurance policy means terminating the relationship with the insurer. Evaluate the surrender value factor that will be received on maturity before taking any decision.

  • Mar 15, 2021
  • 2,413 Views

Surrendering the term plans implies terminating the insurance contract. There are different reasons why people choose to surrender their insurance plan. Some include attractive new insurance plans, inability to pay insurance premiums, lack of adequate benefits, etc. Irrespective of the reason, surrendering your term plan might not be a good option, especially if your insurance contract is in the final phase. Here is why:

What happens when you surrender your term plan?

When you surrender your term policy, your term insurance stands cancelled, and you are no more protected by the insurer. Besides, since term plans do not have a cash value and only offer pure life cover, you lose out on all the premiums previously paid.

Buy Term Plan Now

Why should you not surrender your term plan?

It is not advisable to surrender your term plan because:

1. It can impact the financial security of your family in your absence:

Term plans provide financial security for your loved ones after you are gone. But when you cancel the plan, you devoid your family of this security. Your parents, spouse, children, siblings, etc., depend on you for their needs. And your absence can leave them financially struggling if you do not plan for their future. With term plan guaranteed death benefits, you can provide the much needed financial assurance to your family. The insurance benefit can act as a replacement of your income, helping the family stay monetarily stable.

2. You will lose out on the insurance cover as well as the premiums paid previously:

When you cancel your term plan, the insurance company considers the insurance plan null, and the insurance cover ceases to exist. Moreover, since term plans are pure protection plans with no cash value, all the premiums you paid before are lost.

3. You cannot claim any tax benefit for the premiums paid:

As per the Income Tax Act, 1961, you can claim tax exemption on the premiums paid for term insurance plans. But, when you surrender your policy before its maturity, you do not pay further premiums and your life cover lapses. Hence, you cannot opt for any tax exemption for the same. If you already have made a tax claim and cancel your term plan within three months, the claimed deduction becomes taxable in the year you surrender the policy.

4. You lose out on peace of mind offered by a term plan:

Term insurance gives you peace of mind that when tough times come, your family has a reliable insurance plan to fall back on. The policy benefits can help them meet their long-term financial goals. Further, term insurance plans offer several riders such as protection against major illness, disability, etc., enabling you to secure maximum coverage possible against uncertain times. But when you surrender the term plan, you deprive yourself and your family of this security.

5. A new term cover will be expensive:

When you surrender your term plan, your insurance cover is gone. This means that you would need to invest in new term insurance in the future. And you would likely be paying a higher premium than today, because of rising insurance prices, inflation, increasing age, health issues, etc. You would also need to go through the medical exam again that can influence your premium.

That said, rather than surrendering the policy, it is wiser to opt for a term cover that meets your requirements and budget. Trust Kotak Life Term Insurance Plans to provide you extensive coverage at premiums that do not hurt your pocket and features that adequately fulfil your needs.

Kotak e-Term

Download Brochure

Features

  • Life Cover till 85 years for Life & Life Secure Option
  • 3 Payout Options
  • Special Rates for Women
  • Option to exit the policy with premium refund at the age of 60*
  • Special Rates for Non-Tobacco Users
  • Free Medical Check Up every 5th year**

Ref. No. KLI/22-23/E-BB/2435

T&C

- A Consumer Education Initiative series by Kotak Life

Similar Articles

4 Things To Expect From Your Term Insurance Plan in India

कोविड -19 बूस्टर खुराक के दुष्प्रभाव

Difference Between Short-Term and Long-Term Insurance

Joint vs Individual Term Insurance: Which One Should You Choose?

Term Insurance Claims – Make Sure Your Claims Are Never Rejected

भारत में गृहणियों के लिए टर्म इंश्योरेंस

How to Identify Term Insurance According to Your Needs?

What Happens to Term Insurance Plan With No Beneficiary - Kotak Life

11 Types of Death not covered in Term Insurance Plans

All about Online Income Tax Calculator

जीवन बीमा पॉलिसी लेने की प्रक्रिया क्या है?

How to Buy 1 Crore Life Insurance Policy Without Medical Test

Make Your Online Term Plan Your Family's Monthly Pay Cheque

Ideal Features of a Suitable Term Plan - Act Now for a Stress-free Future

How Much Term Life Insurance Cover Do I Need in India?

8 Things To Do After Buying Term Insurance

How To Change The Nominee in Term Insurance?

Are The Add-ons and Optional Features of Term Insurance Plans Actually Beneficial?

When Should You Review Term Life Insurance of Yours?

What Is the Correct Age to Buy Term Insurance?

What is a Joint Term Insurance Plan? Key Benefits of Joint Term Plan

10 Ways to Get Your Kids Involved in Your Healthy Lifestyle

How Much Cover Should I Take In A Term Plan?

Tips to Choose the Right Term Period for Term Insurance Plan

What is Insurance Premium? | Definition of Insurance Premium

Why Buying a Term Plan Is Smarter Than Traditional Life Insurance Products

Why 1 Cr Term Plan Is Necessary For Family?

Is it a Good Time to Buy Term Insurance During the COVID-19 Pandemic?

What are incremental term insurance plans?

Why Buy Term Insurance Even at Rising Rates?

Different Types of Protection Plans

Difference Between Term Insurance and Endowment Plan

Is Term Life Insurance Plan an Investment or Expense?

टर्म इंश्योरेंस बनाम लाइफ इंश्योरेंस: अंतर और लाभ समझें

Should You Buy a Term Plan After 40?

4 Reasons Why You Need Critical Illness Cover

Can I Extend the Tenure of My Term Insurance Plan?

Why Should You Add a Rider to a Term Insurance Plan?

How To Calculate The Amount Of Term Life Insurance You Need?

Why Buy Term Insurance Plan With a High Cover?

How do I Calculate My Term Insurance Premium

How to Compare Term Insurance Online

Everything About Claim Settlement Ratio for Term Insurance

Can Non-Resident Indians (NRIs) Buy Term Insurance In India?

Gift Your Father A Term Insurance Plan This Father's Day

Term Insurance: What Happens When You Don’t Pay Your Premiums?

Top 3 Reasons Why You Should Buy A Term Plan Now

5 Things To Consider While Buying Term Insurance Plan

How Does Term Life Insurance Work? Learn the Benefits

Term Insurance: Smokers vs Non-Smokers

Term Insurance With Riders In India

Do term insurance policy have a waiting period after buying?

Insuring Against Disability With Disability Insurance Rider

Difference Between Term Insurance and Endowment Plan

Term Insurance Plans and Policies for Smokers

Advantages of Buying Term Insurance in Your 50s

3 Things to Consider When Buying Term Insurance, If You are Single

Why Premium Amount for Term Insurance is So Low?

Do Beneficiaries Pay Taxes on Term Insurance?

Why should single women purchase term life insurance?

Why Spending Time with Friends is Essential for Your Mental Health?

Term Insurance Basics You Should Know

Term Insurance Claim Process

Zero Cost Term Insurance Plan: What is & Should you buy it?

Comparing Term Plans – What Should You Look Out For

Tax Benefits of Term Insurance in India

4 Methods to Calculate How Much Term Insurance You Need

9 Point Guide on how to File Income Tax Return Online

Why Should You Buy Term Insurance in 2022?

Can I Get Term Insurance on Behalf of My Spouse?

What Are Insurance Riders and How to Choose Them in a Term Plan?

Ensure Protection Against Death, Disease & Disability With Life Insurance

Planning For Son or Daughter's Wedding

Buying A Term Insurance? Don't Ignore the Claims Settlement Ratio

Is Group Term Life Insurance Provided By Employer Sufficient?

टर्म इंश्योरेंस क्लेम प्रक्रिया

Buying A Term Insurance Plan? Take These Factors into Account

Is a Term Insurance Policy Portable?

Term Plans are Definitely Cheaper than You Think!

Can Senior Citizens Avail Term Insurance?

Insuring Against Accidents with an Accidental Death Insurance Rider

What is Critical Illness Policy?

5 Reasons to Have a Child Education Plan

Choosing Riders for Insurance Plans

Advantages & Disadvantages of Term Insurance in India

Is There Any Tax Benefit on Term Insurance?

भारत में जीवन बीमा कितने प्रकार के होते हैं?

Key Differences Between Term Insurance, ULIPs, And Health Insurance

10 Ways to Mentally Refresh After a Stressful Day

How To Choose the Right Sum Assured Under a Term Plan?

What Is a Passive Income? Why Should You Use It to Buy a Term Plan?

Increasing Term Insurance and Riders

Insuring yourself against Ill Health with a Critical Illness Rider

Is Life Insurance Investment Worthy Enough

Key IRDAI Regulations That Changed Face Of Term Insurance Industry In 2020

8 Factors to consider before choosing a Critical Illness Insurance

Can I Buy Term Insurance for a COVID-19 Patient?

Individual Life Insurance vs. Group Term Life Insurance

10-Year Term Life Insurance Policy - Explained in Detail

5 Reasons to Buy Term Insurance When You are in Your 30s

Should you have more than one nominee in your term insurance?

Types of Life Insurance Policies in India

Busting Myths and Facts About Term Insurance Policies

6 Types of Death not covered in Term Insurance Plan

5 Smart Steps to keep in mind while buying term policies

Should Youngsters, Working Couples Buy Term Insurance Plans?

10 Most Frequently Asked Questions - FAQs on Term Insurance

Can You Get Term Insurance Without Income Proof?

Should You Have Multiple Term Life Insurance Policies?

Does Your Term Insurance Plan Cover Death Due to COVID-19?

How Does Term Life Insurance Work? Learn the Benefits

Insurance Policy for Housewife In India

क्या ₹1 करोड़ का टर्म इंश्योरेंस पर्याप्त कवर है?

Should you buy a Renewable Term Life Policy?

How to Buy ₹1 Crore Life Insurance Policy Without Medical Test?

Term Insurance with Critical Illness

What are the Documents Required for Term Insurance Plan?

Why Term Insurance Is Better Than ULIP?

All About Term Insurance Inbuilt Coverage

What Should Be The Duration Of Your Term Plan in India?

Why Should You Not Take A Term Plan Without Medical Test in India?

What Happens if you Hide Facts in your Term Insurance?

Insuring Protection Against Death With Death Insurance Rider

5 Benefits of Early Retirement Planning

How Not To Get Your Term Insurance Claim Rejected

How Does Short-Term Life Insurance Work?

टर्म इंश्योरेंस क्या है? टर्म इंश्योरेंस का मतलब

Term Insurance Vs Car Insurance: A Budgetary Choice You'll Regret

Can An Individual Buy Multiple Term Insurance Plans?

Different Types of Premiums in Term Insurance?

What is a short term insurance policy?

5 Term Insurance Benefits for Single Women

Can Term Insurance Plans Be Purchased As A Gift?

Term Life Insurance Vs Money Back Life Insurance

9 Most Frequently Asked Questions on Term Insurance

What Is a Renewable Term Insurance Policy?

Understanding Term Insurance Riders

Term Life Insurance Plan for Smokers vs Non-Smokers

How to Surrender Term Life Insurance When You Have No Liabilities?

9 Ways to Help Family Members in Financial Trouble

How Much Term Life Insurance Cover Do I Need?

While Buying Term Insurance Compare Features, Not Just Premiums

Reasons You Need Term Insurance Plan as a Self-Employed Person

Why Should New Parents Buy Term Life Insurance?

Why Term Plan Should Be The First Step To Securing Your Future?

Online vs Offline Term Insurance: Which Is The Better Option To Buy

When is the Right Time to Buy Term Life Insurance Policy for Yourself?

What is a term insurance plan with a return of premium, and how does it work?

What is Term Insurance? Term Plan Meaning and Definition

Why is it important to buy term insurance plan?

Can You Increase Your Term Insurance Cover?

Endowment Plans vs Term Plans: Understanding the difference

What All Documents Required For Term Insurance In India?

Term Vs. Whole Life Insurance: Which One You Should Buy in India?

What is Form 16, Form 16 part A, Form 16 part B, Information Required and FAQs

Do You Need Term Insurance Cover After Retirement?

Is term Insurance Needed for People With No Dependents?

8 Benefits of Term Insurance You Should Know

Eligibility Criteria for Buying Term Insurance in India

What Should You opt for - Limited or Premium Pay?

Do I Need to Give a Medical Test for Term Insurance in India?

How Does BMI Affect Your Term Insurance Premium?

Why You Must Include In Your Financial Planning?

What Are the Best Term Insurance Plans for Planning Retirement?

Can I Make Changes to My Term Insurance Policy Post Purchase?

Make Your Online Term Plan Your Familys Monthly Payout

Know How to Invest at Every Age for Larger Returns

What Types of Deaths Are Covered in a Term Insurance Plan?

Side Effects of Covid-19 Booster Doses

Is It Good To Buy A Term Insurance Plan In 2022?

Which Death Type Does Your Term Plan Not Cover?

Calculating Term Insurance Premium

How To Choose the Right Term Insurance Plan?

All you need to Know about Term Insurance Plans for housewives

Term Insurance Calculator - Everything You Need To Know

6 Reasons That Make Term Insurance a Must Buy

Protection for your family

Why Married People Should Buy Term Insurance Under MWP Act?

Why Term Insurance Is Important in times of COVID-19?

Term Insurance Age Limit – Term Plan for All Age Groups

What is the Right Term Period For Term Insurance Policy? Here's How You Should Choose!

Planning For Children's Future

Benefits of Short-Term Life Insurance Policy

Cost of Term Insurance Likely to Increase Soon

Term Insurance vs Life Insurance: Understand the Difference and Benefits

Which Term Insurance to Choose: Lump Sum or Staggered Pay-out Plan?

Term Plan with Spouse Cover

Does Term Insurance Cover Accidental Death?

Why Short-Term Insurance Plans Deserve a Second Look?

Steps on How to Buy Term Insurance Online

Is ₹1 Crore Term Insurance Good Enough Cover?

Why does every working women need life insurance?

Term Insurance: Most Common Term Insurance Myths Explained | Kotak Life

Importance of Term Insurance at Every Stage of Your Life

How To Evaluate Your Term Insurance Quote?

Can a Housewife Buy a Term Insurance Plan - All You Need to Know