Most Asked

Surrender is a facility given to the policy holder to cancel the policy after completion of the
lock-in period, completion of premium payment term or any other lock-in period prescribed
by the product guidelines.

a) Surrender request can be accepted for policies that have the status of Inforce, Paid
up, Policy Discontinuance or Cover Continuance.
b) The request should be received on completion of the policy lock-in period
c) In case the policy has been assigned, for Assigned, HUF and MWP policies request
for surrender should be received from the Assignee, Karta and Trustee respectively
under consent from the Policyholder.
d) In case of Unit linked plans, the date and time stamp is mandatory on the request
form. This is required for NAV allocation.

         a. If the request is received before 3.00 p.m. i.e. pre cut-off, then the same business day NAV will be allocated to the customer.

         b. If the request is received after 3.00 p.m. i.e. post cut-off, then the next business day NAV will be allocated to the customer.

 e) Request will be rejected if Life Insured is a Minor

a. Surrender Request Form duly filled and signed.
b. Policy Document / Indemnity Bond in lieu of Policy Document
c. Cancelled cheque or bank statement/pass book copy duly attested by bank and
Policyholder.
d. If ‘NEW ACCOUNT’ is mentioned on the cheque then we require the bank statement
/ passbook.
e. For NRE / NRI Account we require confirmation from the bank, which should state
that all premiums are paid from NRI account
f. Self attested Pan Card copy
g. NOC from the bank (In case assigned to the bank)
h. Fund transfer to new application letter
i. If customer is a NRI then:
          i. He/she will have to provide the copies of his/her Passport with entry and exit dates.
           Declaration (for change in residential status NRI – Indian)

For Pension Plan, 1/3rd of the Surrender amount is paid to customer and 2/3rd customer needs to purchase annuity of his choice.

Policy Compliant/Non Compliant Status is as per the Grid given below and thereby TDS rates are stated for Resident and NRI status

Policies issued on or before 31st March 2012 Policies issued on or after 1st April 2012

Applicable to only those policies where the sum assured is less than 5 times of the premium paid

  • Payouts Rs.100,000 and above within the same financial year will have to be taxed

Applicable to only those policies where the sum assured is less than 10 times of the premium paid

  • Payouts Rs.100,000 and above within the same financial year will have to be taxed

 

I. TDS @5% is being applicable on NET GAIN for Non Compliant Policies for payouts to Resident Indian.

II. TDS will continue to get deducted based on PAN Card status for Resident Indian i.e.

a. If PAN is submitted and verified, at the time of processing for Resident Indian, TDS rate @5% on Net Gain.

b. If PAN is not submitted at the time of processing for Resident Indian, TDS rate @20% applicable on Net Gain

c.TDS will not get deducted if payout(s) in a given financial year is less than Rs.1,00,000/- at client level for Resident Indian.

III. TDS rates for residential status NRI, is as under:

a. On Net Gain =< 1 Cr – TDS @31.2%

b. On Net Gain > 1 Cr –TDS @35.88%

Form 15G and Form 15H are self declaration forms to be submitted by residents which can
help a person avoid TDS incase one is not liable to pay income tax at the end of the year (i.e.
if total taxable income of a person shall not exceed the basic exemption limit for that
relevant Financial Year (Rs 2.5 lakhs for FY14-15 & 15-16). Form 15H is for senior citizens (a
person who is above 60 yrs) and Form 15G is for others.

Some Pointers to Keep In Mind

   a) Nonresident/NRI cannot submit this form
   b) 15G cannot be filed by any person who is in receipt of an amount that exceeds the applicable basic exemption limit as per IT provisions.
   c) Valid PAN is mandatory , otherwise the tax would be deducted at the rate of 20%
   d) These forms are to be submitted in duplicate, one of which is forwarded to the Income Tax department before 7th of the next month. In case there is a holiday on the 7 th , then the previous working day of that month The form should be submitted.
         a. at the beginning of each financial year or
         b. at the time of payout request or
         c. Before receiving any taxable amount from the policy, so as to avoid a situation where TDS has already deducted before its receipt.
    e) No reversal of TDS will be done for late receipt of Form 15G/H (i.e.: after deduction of TDS). However, such Form 15G/H received will be used for the payment made in
rest of the year.
     f) New set of forms are required to be filed every year and the eligibility criteria as stated above needs to be examined every year before furnishing the forms.

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