Winning Bizness Desk

Mumbai. The Insurance Regulatory and Development Authority of India (IRDAI) has ordered insurance companies to give more Special Surrender Value (SSV) to the policyholders than before. Owing to this effect, policy holders will now get more refund from the insurance company on closing the premature policy. Apart from this, policy regulator IRDAI has asked the companies selling the policy to pay Special Surrender Value (SSV) from the first year itself. But, in this, premium for at least one year should be deposited for the policy. Earlier, if an insurance holder wanted to surrender within one year of taking the policy, then he did not get the surrender value. That is, now your money will not be lost if you close the policy after depositing the premium for one year.

Know the surrender value

The amount that the insurance company gives you on closing or surrendering the policy is called surrender value. Suppose the maturity of any of your policies is 10 years, but you surrender that policy before 10 years, then the amount you get is called surrender value. Suppose a policyholder pays an annual premium of ₹50,000 for a 10-year policy with a sum assured of ₹5 lakh. Now after four years, he wants to discontinue the policy. During this time, he has paid a total premium of ₹2 lakh and has collected a bonus of ₹40,000.

According to SEBI registered investment advisor Abhishek Kumar, 'As per earlier rules, if the policy is surrendered between the fourth and seventh year, then only 50% of the total premium amount is received. According to this, the policy holder will get 50% of the total ₹2 lakh premium and ₹40,000 bonus i.e. ₹ 1.2 lakh.