New Delhi, Aug. 27 -- If you have taken a loan against a life insurance policy, you may assume that the insurer cannot surrender the policy without your consent. A recent ruling of the National Consumer Disputes Redressal Commission (NCDRC), however, highlights why policyholders need to understand the legal effect of assigning a policy to a bank as loan security.

According to a report by Upstox, the NCDRC, in an order dated August 2, 2026, held that there was no deficiency in service on the part of Life Insurance Corporation of India (LIC) after it surrendered a policy on the instructions of the bank to which the policy had been assigned.

The case involved Amar Singh, a resident of Kharkhoda in Sonepat, Haryana. Singh had purchased a LI...