Surrender Value Calculator Lic

Surrender Value Formula:

\[ SV = (Premiums Paid \times SV Factor) + Bonus - Loans \]

Premiums Paid:

currency

SV Factor:

decimal

Bonus:

currency

Loans:

currency

Surrender Value:

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1. What is Surrender Value for LIC?

Surrender Value is the amount a policyholder receives from their life insurance company when they decide to terminate the policy before its maturity date. It represents the cash value accumulated in the policy minus any applicable charges or loans.

2. How Does the Calculator Work?

The calculator uses the Surrender Value formula:

\[ SV = (Premiums Paid \times SV Factor) + Bonus - Loans \]

Where:

\( Premiums Paid \) — Total premiums paid into the policy (currency)
\( SV Factor \) — Surrender value factor based on policy duration (decimal)
\( Bonus \) — Any accrued bonuses on the policy (currency)
\( Loans \) — Any outstanding loans against the policy (currency)

Explanation: The surrender value factor is determined by the insurance company and varies based on policy type, duration, and other factors specified in the policy document.

3. Importance of Surrender Value Calculation

Details: Calculating surrender value helps policyholders understand the financial implications of terminating a policy early. It's important for financial planning and making informed decisions about insurance coverage.

4. Using the Calculator

Tips: Enter all values in the appropriate currency units. The SV factor should be obtained from your policy document or insurance provider. All values must be non-negative numbers.

5. Frequently Asked Questions (FAQ)

Q1: When does a policy acquire surrender value?
A: Most life insurance policies acquire surrender value after premium payments have been made for a minimum period, typically 2-3 years.

Q2: Is surrender value taxable?
A: In many jurisdictions, surrender value may be subject to taxation if it exceeds the total premiums paid. Consult a tax professional for specific advice.

Q3: Can I get a loan against surrender value?
A: Many insurance policies allow you to take loans against the surrender value, typically up to a certain percentage of the total value.

Q4: What's the difference between surrender value and maturity value?
A: Surrender value is received when terminating a policy early, while maturity value is received when the policy reaches its full term.

Q5: How accurate is this calculator?
A: This calculator provides an estimate. Actual surrender values may vary based on specific policy terms, charges, and the insurance company's current calculations.