Rising Insurance Premiums Ahead: IRDAI's New Surrender Value Guidelines Set Impact in Motion

Insurance premiums may increase or agent commissions decrease as the IRDAI's revised surrender value guidelines take effect Tuesday. These changes are aimed at offering better returns for policyholders exiting early from life insurance policies. Adjustments in premiums and agent commissions seem inevitable to comply with the new regulations.

Insurance premiums are set to rise, or agent commissions could see cuts as the Insurance Regulatory and Development Authority of India's (IRDAI) revised surrender value guidelines come into force from Tuesday.

Earlier in the year, IRDAI introduced these guidelines to provide better returns for policyholders exiting early from their life insurance policies. Surrender value refers to the amount paid to policyholders upon terminating the policy before maturity.

To comply with the revised guidelines, insurers may either hike premiums or reduce agent commissions. According to a senior official, these changes could result in volatile premiums in the latter half of the fiscal year. Most insurance companies are adapting to meet the new standards, but life insurance giant LIC faces a significant challenge in updating its policies.

(With inputs from agencies.)