Early exit: why Indians are surrendering life insurance policies before maturity

RBI’s Financial Stability Report 2026 revealed surrenders and withdrawals (38.3%) exceeded maturity payouts (36.9%) in FY26.

Only about half of life insurance policies remain in force after five years, according to IRDAI data.

ICICI Prudential Life reported the highest 61st-month persistency ratio at 58.8% in FY25.

Consumer advocates attribute high surrender rates to mis-selling of unsuitable products.

Insurers argue policy discontinuance is often due to changing financial priorities or liquidity needs, not product suitability.