Section 21 in Insurance Regulatory and Development Authority of India (Unit Linked Insurance Products) Regulations, 2019
21. Surrender Value and Options on Surrender.
(a)In case of surrender after lock-in period the surrender value shall not be less than the fund value on the date of surrender.(b)The following options shall be available to the policyholder on the date of surrender:(i)To utilize the entire proceeds to purchase immediate annuity or deferred annuity from the same insurer at the then prevailing annuity rate subject to the Regulation 21(b)(iii), the policyholder shall be given an option to purchase immediate annuity or deferred annuity from any other insurer. or ii) To commute up to 60% and utilize the balance amount to purchase immediate annuity or deferred annuity from the same insurer at the then prevailing annuity rate subject to the Regulation 21(b)(iii), the policyholder shall be given an option to purchase available annuity from any other insurer.(iii)Every policyholder shall be given an option to purchase immediate annuity or deferred annuity from another insurer at the then prevailing annuity rate to the extent of percentage, stipulated by the Authority, currently 50%, of the entire proceeds of the policy net of commutation.(iv)For (i) and (ii) above, the purchase of annuity shall be subject to terms and conditions under the product.In case the proceeds of the policy either on surrender or vesting is not sufficient to purchase minimum annuity as defined in Regulation 3(a) of IRDAI (Minimum Limits for Annuities and Other Benefits) Regulations, 2015, as amended from time to time, such proceeds of the policy may be paid to the policyholder or beneficiary as lump sum.(c)In case of surrender or discontinuance during the lock-in period, the options referred in Regulation 21(b) under these Regulations above shall be available at the end of the lock-in period.
