Understanding Surrender Value in Term Insurance: What Policyholders Need to Know

Summary

The blog explains surrender value in term insurance by outlining its calculation methods, IRDAI guidelines, and types including GSV and SSV. It discusses common reasons for policy surrender and urges evaluation of long-term financial impacts before cancelling coverage. Readers are encouraged to weigh alternatives and seek professional advice to avoid forfeiting essential benefits.

Key Takeaways

Surrender value refunds a portion of premiums if a term policy is cancelled early.
IRDAI guidelines set eligibility criteria and percentage limits for refunds.
Types include Guaranteed Surrender Value (GSV) and Special Surrender Value (SSV).
Surrendering a policy forfeits death benefits, making evaluation crucial.
Professional advice is recommended before making cancellation decisions.