Premature surrenders and withdrawals of life insurance policies have overtaken maturity payouts, according to data presented by Minister of State for Finance Pankaj Chaudhary in the Lok Sabha on August 3. Surrenders and withdrawals rose from 32% of total benefits paid in FY22 to 39% in FY26, while maturity benefits fell from 48% to 37%.
In absolute terms, surrender and withdrawal payouts climbed to Rs 2.80 lakh crore in FY26 from Rs 1.58 lakh crore in FY22, while maturity payouts rose to Rs 2.70 lakh crore from Rs 2.40 lakh crore over the same period.
LIC accounted for Rs 1.57 lakh crore of surrenders in FY26, followed by SBI Life (Rs 29,294 crore), ICICI Prudential Life (Rs 27,340 crore) and HDFC Life (Rs 15,741 crore).
The minister said IRDAI attributes early exits to product suitability issues, affordability, unmet expectations, mis-selling, low awareness, and changes in policyholders' financial circumstances. IRDAI continuously monitors surrender trends and persistency, and takes supervisory and regulatory measures — including product design and disclosure improvements — to strengthen policyholder protection.
Sources: Business Standard, Lok Sabha reply (August 3, 2026)