So, if you surrender a policy in the mid-term, you would get a sum (surrender value) of what has been allocated towards savings and earnings. In this piece, we take a look at how the surrender value of a life insurance policy is calculated. Surrender value is the amount that a policyholder receives from the life insurer when he or she decides to terminate a policy before its maturity period. Types of surrender valueThere are two types of surrender value—guaranteed surrender value and special surrender valueGuaranteed surrender valueThe guaranteed surrender value is payable to the policyholder only after the completion of three years. On discontinuing a policy, you get special surrender value, which is calculated as the sum of paid-up value and total bonus multiplied by surrender value factor.

Source: Mint April 26, 2021 10:12 UTC