What is special surrender value?

What do you mean by Special Surrender Value of an endowment policy? I have bought a Jeeval Saral Policy (Sum Assured: ₹5 lakh; Yearly premium: ₹24,500; Policy Term: 25 years; Month & Year of commencement: November 2011) Total money paid in four years and three months is ₹1,04,125 (₹24,500 X 4 plus ₹6,125 quarterly premium. Please let me know whether I should continue or surrender or stop paying premiums? After surrendering the policy, what amount will I get? After stopping premium payments, what amount will I get?
- Sagar

Jeevan Saral Policy is an endowment policy with the combination of insurance and investment in it. The surrender value of the policy will be the greater of the guaranteed surrender value and special surrender value. The guaranteed surrender value will be equal to 30% of the total amount of premiums paid minus first year premium and all the extra premiums. In your case, the guaranteed surrender value will be 30% of ₹7,9625 (₹1,04,125-₹24,500) which will be approximately ₹23,886. You will have to get in touch with LIC to confirm this figure.

Special Surrender Value will be 80% of the Maturity Sum Assured if three or more years' but less than four years' premiums have been paid. The Maturity Sum Assured for this will be the Maturity Sum Assured corresponding to the term for which premiums have been paid under the policy.

Special Surrender Value is usually higher than the Guaranteed Surrender Value, but it is at the discretion of the insurer. The value will depend on the duration for which premiums have been paid and the policy duration at the date of surrender. To get a detailed information on the surrender value that you will get, you may contact LIC.

This article was originally published on March 16, 2016.