MUMBAI: Irdai is exploring ways to finance life insurance premiums against policy surrender values to help policyholders avoid premature surrenders and retain policies until maturity, chairman Ajay Seth said at Samvaad 2026, organised by Sahamati, the self-regulatory organisation for account aggregators.Many policyholders surrender policies when they need money or face a temporary income shortfall, particularly those outside the salaried workforce. Financing the final few premium instalments could help them retain the policy and realise better value at maturity, while giving lenders an existing policy value as security. “A significant number of policyholders surrender their policies because they need money. Another situation arises when income varies, particularly among people who are not salaried,” Seth said. “Financing those final instalments could be useful. If the premiums are paid over time, the policyholder can realise better value, while the lender has an embedded value to rely on.”Seth said a grey market had emerged for policy assignments, which he said were not permitted under the Insurance Act. “We could develop a formal channel for premium financing instead,” he said. Irdai is also examining financing for health insurance premiums, which can be difficult for households with limited monthly incomes to pay upfront.
