1. What is Surrender Value?

The surrender value is the amount a policyholder receives when they terminate an insurance policy before its maturity date. For Tata AIA policies, it's typically calculated as a percentage of the single premium adjusted for the remaining policy term.

2. How Does the Calculator Work?

The calculator uses the Tata AIA surrender value formula:

Where:

• Single Premium — The initial lump sum paid for the policy (in rupees)
• Remaining Term — Years left until policy maturity
• Total Term — Original duration of the policy in years

Explanation: The formula accounts for the proportion of the policy term completed and applies a standard 75% factor to the premium amount.

3. Importance of Surrender Value Calculation

Details: Understanding surrender value helps policyholders make informed decisions about early termination of their policies and assess the financial implications.

4. Using the Calculator

Tips: Enter the single premium amount in rupees, remaining term and total term in years. All values must be positive numbers with remaining term ≤ total term.

5. Frequently Asked Questions (FAQ)

Q1: Is the surrender value always 75% of premium?
A: No, it's up to 75% multiplied by the proportion of term remaining. The actual percentage may vary by policy.

Q2: When does a policy acquire surrender value?
A: Typically after 2-3 years of premium payments, but check your specific policy terms.

Q3: Are there penalties for surrendering early?
A: Yes, surrender values are usually lower in early policy years to account for acquisition costs.

Q4: Does this calculator work for all Tata AIA policies?
A: This provides an estimate for single premium policies. Terms may vary for regular premium policies.

Q5: Are there tax implications for surrender value?
A: Yes, surrender values may be taxable depending on policy duration and amount. Consult a tax advisor.