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ICICI Investment Misrepresented - Can I Exit Now?

Ramalingam Kalirajan |8027 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Feb 20, 2025

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more

Asked by Anonymous - Feb 02, 2025Hindi

I invested in ICICI Guaranteed Income Plan for Tomorrow. But realised after 6 months that the agent fooled me. What was discussed is not as per what I discussed with the customer care. Is there a way to surrender the policy at this stage?? Or what is the best way forward?

Ans: You have realized early that the policy is not what was promised. This is a good thing because the earlier you act, the lower your losses.

ICICI Guaranteed Income Plan is a traditional non-linked, non-participating savings plan. These types of policies usually have:

High lock-in periods (usually 5 years).
Low surrender value in the early years.
Poor returns compared to mutual funds.
Limited liquidity.
Since you are just 6 months into the policy, let’s evaluate the best way forward.

1. Can You Surrender the Policy Now?
Yes, but there are conditions:

Surrender is allowed only after one year if at least one full premium is paid. Since you are only six months into the policy, surrender may not be allowed yet.
Surrender value is usually very low in the first few years. The insurer deducts charges, and you may get back much less than what you paid.
If premiums are unpaid, the policy becomes a paid-up policy instead of lapsing. In this case, benefits reduce significantly, but you won’t lose everything.
2. What Are Your Best Options?
Since full surrender is difficult at this stage, here are the practical options:

A. Stop Paying Premiums – Let It Become a Paid-Up Policy
If you stop paying premiums, the policy will acquire a paid-up status after one year.
You won’t get full benefits, but you avoid future payments.
At maturity, you will get a reduced payout (not ideal, but better than wasting more money).
No further action is required from your side once the first-year premium is completed.
Best for: If surrendering is costly and you don’t want further losses.

B. Complain to ICICI Prudential for Mis-Selling
Since the agent misled you, you can file a formal complaint. Follow these steps:

Write an email to ICICI Prudential’s customer care (lifeservice at iciciprulife.com) explaining the mis-selling. Mention:

The differences between what was promised and what you received.
How the agent misled you.
Your request to surrender or cancel the policy.
Visit the nearest ICICI Prudential branch and submit a written complaint with all supporting documents.

If ICICI does not respond within 30 days or rejects your request, escalate to IRDAI:

Lodge a complaint at IRDAI Grievance Redressal Portal (igms.irda.gov.in).
Call IRDAI at Toll-Free Number.
If ICICI is found guilty of mis-selling, IRDAI may order a refund.

Best for: If you have proof of mis-selling and want to fight for a refund.

C. Surrender the Policy After One Year
If ICICI does not approve cancellation and you cannot afford to keep the policy, surrender it after completing one year.
The surrender value will be lower than what you paid, but it is better than keeping a low-return policy.
Use the surrender amount for high-return investments like mutual funds.
Best for: If stopping premiums is not an option and you want to exit soon.

3. How to Prevent Such Mistakes in the Future?
Never trust agents blindly. Always ask for written policy details before signing.
Read the policy document carefully during the free-look period (first 15 days).
Avoid traditional savings plans. Mutual funds offer far better returns.
Consult a Certified Financial Planner (CFP) before making long-term investments.
Final Insights
The best step depends on whether ICICI allows surrender now. If not, the best approach is:

Stop premiums and let the policy become a paid-up policy.
File a complaint if there was clear mis-selling.
Surrender after one year if no other option works.
If you get a refund or surrender value, reinvest in mutual funds through a CFP for better returns.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.