8 Tips to Consider Before Surrendering Your Insurance Policy

3. Disappointment on Returns

This is another prime reason why policy holders terminate their insurance plans. While buying any insurance plan, most of the buyers expect that they will be receiving good returns out of their investment made. But often the scenario turns out to be something else.

"An endowment plan can, at best, offer returns of 5-7 per cent, which does not help in funding long-term goals. If you are convinced that the policy is not a good fit, you should consider surrendering it or converting it into a paid-up policy," adds Mathpal.

An endowment policy is considered as paid-up policy after the policy holder pays a certain number of premiums. Once the policy gains the status of a paid-up policy, your investments get locked at that level and a condensed protection cover continues to be in force.

However, if your portfolio is loaded with many such policies, it’s advisable to terminate such policies.

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