Question: My father has a traditional life insurance savings policy with sum assured of Rs 12,00,000, a policy term of 20 years, and a premium paying term of 10 years. He has been paid all the premiums regularly and has now completed 10 years under the policy. Due to some financial needs, he is considering surrendering the policy at this stage. According to the policy document, the Guaranteed Surrender value (GSV) available is Rs 2,50,000. The policy also states that the surrender value payable will be the higher of Guaranteed Surrender Value (GSV) and the Special Surrender Value (SSV) and no bonuses or guaranteed additions have been attached to the policy. As per the Special Surrender value table, the applicable SSV factor at the end of the 10th policy year for the policy term of 20 years and a premium paying term of 10 years is 69%. Based on these details, what is the maximum surrender amount my father can except to receive from the insurance company?
Answer: Since the policy has completed its full premium paying term of 10 years and no bonuses or guaranteed additions have been attached to the policy, the Paid up value is equal to the sum assured.
Paid up value = Rs 12,00,000
The applicable Special Surrender Value (SSV) factor is 69%
SSV = Rs 12,00,000 * 69% = Rs 8,28,000
Now compare the two surrender value available under the policy
Guaranteed Surrender Value (GSV) = Rs 2,50,000
Special Surrender Value (SSV) = Rs 8,28,000
As per the policy terms, the surrender value payable will be the higher of the GSV and SSV
Since Rs 8,28,000 is higher than Rs 2,50,000, the insurer will pay the Special Surrender Value
Final Answer: Rs 8.28,000.

Supporting evidence:
title: old.irdai.gov.in/101N102V01.pdf
quote: - (5) The surrender value shall be higher of the GSV and the Special Surrender Value (SSV) The SSV at the date of surrender shall be calculated as:
Applicable SSV Factor x Paid-Up Value Paid-Up Value = Paid-Up Sum Assured + Bonuses attached till the date of surrender + Paid-Up Guaranteed Additions
context: l be determined as the applicable GSV factors on Premiums paid at the time of surrender multiplied to the total Premiums paid to date. The Premium is excluding any taxes paid or any extra premiums paid.
- (3) The Surrender Value of the bonuses/additions shall be determined as the applicable GSV factors on bonuses/additions at the time of surrender multiplied to the bonuses/additions already accrued to the Policy.
- (4) The GSV factors applicable for Premiums paid, accrued guaranteed additions and accrued bonuses are as specified in Appendix 1.
- (5) The surrender value shall be higher of the GSV and the Special Surrender Value (SSV). For details of SSV, please refer to Appendix 2.
- (6) For the purpose of calculation of Surrender Value, Premium will exclude any taxes paid or any extra Premiums paid.

2. Lapsed Policies and Paid-Up policies

- (1) If any Premium remains unpaid after the expiry of the grace period and your Policy has not acquired a minimum Guaranteed Surrender Value, your Policy's status will be altered to lapsed status and the cover will cease.
- (2) No Benefits shall be payable under a lapsed Policy.
- (3) If any Premium remains unpaid after the expiry of the grace period and your Policy has acquired a minimum Guaranteed Surrender Value, your Policy's status will be altered to paid-up status.
- (4) Once your Policy is altered to paid-up status, the Sum Assured on Death/Maturity will reduce to paidup Sum Assured on Death/Maturity, paid-up guaranteed additions and bonuses accrued till the date of becoming paid-up. Your Policy will cease to qualify for addition of any future bonuses. The guaranteed additions shall be reduced by multiplying the additions payable during the Policy Term by the ratio of the Premiums paid to the Premiums payable under the Policy. Simple Reversionary Bonus accrued to the Policy at the date the Policy is made paid-up will continue to remain attached. Accidental death benefit will be an additional sum equal to paid-up Sum Assured on Death.
- (5) The paid-up Sum Assured on Death will be calculated as the Sum Assured on Death multiplied by the ratio of the Premiums paid to the Premiums payable under the Policy.
- (6) The paid-up Sum Assured on Maturity will be calculated as the Sum Assured on Maturity multiplied by the ratio of the Premiums paid to the Premiums payable under the Policy.
- (7) A lapsed or paid-up Policy may be revived subject to the terms and conditions as described under Part D Clause 3.