14 October 2013
It is the amount the policyholder will get from the life insurance company if he decides to exit the policy before maturity.
Note: Do all policies acquire surrender value?
No. Only those policies which contain an embedded savings component — like ULIPs and endowment plans — will partially return the amount invested for the life cover. Surrendering term plans, which are pure protection covers with no savings element, will result in lapsation of the policy.
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