Surrendering your life insurance policy and redeeming the policy value for meeting your financial need is not advisable unless you have no other option. Apart from providing you with life cover to protect your loved ones`, life insurance policies also help you to meet your long-term financial goals such as your children’s education, purchase of any asset or accumulating your retirement savings. Here are 4 things that you should keep in mind before you decide to surrender your policy: Putting your loved ones` at risk: By surrendering your policy, you are likely to put your loved ones` at risk should something happen to you after the policy is cancelled. You must make sure you have adequate life cover and savings before you surrender your policy as else your loved ones’ may then have to dip into existing savings to meet their financial needs, which could have been at least partially taken care of by the death benefit payable in a life insurance policy. Loss of opportunity for long term wealth creation: Life insurance policies are designed to give you long term benefits, thus you not only lose the opportunity to grow your savings but also lose benefits like bonuses or wealth boosters(applicable for specific products) that get added to your policy as a reward for staying invested. Loss of value: When you surrender a policy prior to maturity you are likely to get a lower amount than the total premiums you would have paid. This is because all the benefits get added to your policy only when you stay invested till the end. The policy surrender value may also be subject to tax deductions or charges, which means you may get a much lesser amount then what you would expect. You also end up giving up your annual tax exemption benefits for renewal premiums, under Section 80 C or applicable laws issued from time to time. Risk of paying higher premiums or not being eligible for purchasing a new life insurance policy: A charge for providing life insurance cover (mortality charge) is deducted from your policy premium. This charge is linked to your age and health. As you grow older you end up paying higher mortality charges and a higher premium in case of any health conditions. This means you pay lower insurance cover charge when you are younger and likely to be healthier. As your age increases you will need to pay higher mortality charges and higher premiums based on your health. Also, there is always the likelihood of not being eligible to buy a new life insurance policy due to chronic and acute health conditions or co-morbidities. However, we do understand that there are certain extraordinary situations where surrendering your life insurance policy may be the only option available to you. Before you decide to surrender your policy, it is recommended that you speak to our Life Insurance Expert. Our Life Insurance Expert will guide you on the policy benefits you stand to lose and the risks of surrendering your life insurance policy and advise you of alternate options which may help with your immediate financial requirements. This conversation will help you make an informed decision. Surrendering a life insurance policy is a very significant decision. We strongly recommend that you continue with your life insurance policy and avail of your life cover and policy benefits to meet your long-term financial goals. Speak to our Life Insurance Expert today on 1860 266 7766