When you purchase a term plan with return of premium option and decide to discontinue paying the premium under the plan or surrenders the policy, you will receive a Surrender Value of the policy.
The surrender value of the TROP plan is subject to the below-mentioned criteria:
a. Single Premium variant: After payment of single premium.
b. Limited Pay variant and Regular Pay variant: On payment of two full years’ premium
The surrender value is the higher of Guaranteed Surrender Value (GSV) or Special Surrender Value (SSV). The Special Surrender Value is equal to the Guaranteed Surrender Value under this variant.
Guaranteed Surrender Value is defined as:
GSV factor x (Total premiums paid plus underwriting extra premiums, if any, for base policy)
‘Total premiums paid plus underwriting extra premiums, if any, for base policy’ refers to the total of all annualised premium paid plus underwriting extra premium, if any, under the policy including premiums for Life Stage Add on Sum Assured (if any).
The GSV Factors are provided below:
% of Total Annualised Premiums plus underwriting extra premiums, if any, paid
Single Pay variant
Limited and Regular Pay variant
Graduating linearly from 56% to 90% during the last two policy years Minimum (56% + [(34% x (N-7)) /(Policy Term - 8)], 90%) N : Year of Surrender
Applicable for all variants
i. Surrender Benefit (or Early Exit Value) is only applicable for base death benefit cover and not on add-on options such as Accelerated Critical Illness Benefit option or Accident Cover option.
ii. Surrender Benefit (or Early Exit Value) will be payable only after the policy has acquired a Surrender Value (or Early Exit Value)