Aditya Birla Sun Life Insurance Company Limited

Guaranteed Surrender Value

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Definition:

The guaranteed surrender value is the guaranteed amount that the policyholder will receive on voluntary termination of the policy.

Description:

At times, when an insured feels the sudden requirement of the money, the insured has the option to surrender his life insurance policy. Surrendering the policy before maturity, the insurance company will offer a surrender value.

A guaranteed surrender value is calculated as the total premiums paid which is multiplied by the surrender value factor. This surrender value is mentioned in the policy and is often paid after the completion of the 3 years of policy.

The insurance company will pay a surrender value of 30% of the premium paid towards the life insurance, excluding the premium paid in the first year. It will exclude the additional premium paid for optional covers. Surrendering the policy before maturity attracts a penalty known as surrender charges. The surrender value is calculated even after adjusting the surrender charges.

Example:

Ritika purchased a term plan for a policy term of 15 years. The premium under the policy was ₹7500/- annually. Ritika paid the premium for 4 years and then she thought of surrendering the policy. Till four years total premium paid by Ritika was ₹30,000/-. Now she will get a surrender value [30% of (₹30,000 - ₹7500 = ₹22,500) -surrender charges ₹2,000/-]. The total surrender value will be ₹4,750/-.

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ABSLI Salaried Term Plan

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Recently Added Article

ABSLI Salaried Term Plan (UIN:109N141V02) is a non-linked non-participating individual pure risk premium life insurance plan; upon Policyholder’s selection of Plan Option 2 (Life Cover with ROP) this product shall be a non-linked non-participating individual savings life insurance plan.
*LI Age 21, Male, Non Smoker, Option 1: Life Cover, PPT: Regular Pay, SA: ₹ 1 Cr., PT: 10 years, Annual Premium: ₹ 6100/- ( which is ₹ 508.33/month) Premium exclusive of GST. On death, 1 Cr SA is paid and the policy terminates.
ADV/8/22-23/1072