Aditya Birla Sun Life Insurance Policy Surrender

Aditya Birla Life Insurance Policy Surrender

Surrendering a life insurance policy means ending it early and claiming its cash value. This option is available only for ULIPs, endowment, money-back, and whole life plans; term insurance policies do not acquire a surrender value.

Upon surrender, you will receive either the Guaranteed Surrender Value (GSV) or the Special Surrender Value (SSV), whichever is higher. The GSV typically ranges from 30% to 90% of your total premiums paid. Most policies become eligible for surrender only after 3 years of premium payments.

What Is Policy Surrender?

A policyholder can terminate a life insurance policy before it reaches maturity by surrendering it to the insurance company. After the surrender process, the insurer pays a cash value, known as the policy's surrender value. However, not every Aditya Birla Life Insurance policy acquires a surrender value. Life insurance plans associated with an investment component, such as ULIPs, annuity, and endowment plans, acquire a surrender value over time.

How to Surrender Your Aditya Birla Life Insurance Policy

To surrender your life insurance policy, you need to submit the reasons for surrender along with the surrender form to the nearest official branch of Aditya Birla Life Insurance. You can download this surrender form from the company's official website or collect it from a branch.

Steps to Surrender Your Policy:

Documents Required for Surrender

To surrender your Aditya Birla Life Insurance policy, you will need the following documents:

• Original policy documents
• A canceled cheque with the policyholder's name printed on it
• Bank passbook copy or bank statement showing the pre-printed name and account number
• ID Proof (PAN card, Aadhaar Card, Passport, Driving License, Voter ID)
• Duly filled policy surrender form
• Latest contact details
• NRE bank statement reflecting any premiums paid from an NRE account (if applicable)

Charges for Policy Surrender

Typically, life insurance companies charge a certain percentage of the total premiums paid up to the surrender date if you decide to cancel the policy before maturity. This percentage varies from company to company. This charge is the amount the insurance company levies to manage the policy. Moreover, you might be able to waive the surrender charge if you inform the company about canceling the policy in advance.

For life insurance policies like annuity plans, the discontinuity or surrender charge is approximately 10% of the funds contributed to the contract within the first year it is effective. For subsequent years, the surrender fee typically drops to around 1%.

Types of Surrender Value and How to Calculate It

There are two types of surrender values:

• Guaranteed Surrender Value (GSV)
• Special Surrender Value (SSV)

Let us understand each one of them:

Guaranteed Surrender Value (GSV)

GSV, also known as Guaranteed Surrender Value, is a percentage of the total premiums paid, excluding the first premium of the particular policy. This percentage is also known as the Guaranteed Surrender Value Factor. It usually depends on the year of surrender and can vary across insurers and products.

GSV does not include any additional premiums paid for riders. Also, any bonuses you might have received from the insurance company are not included.

How to Calculate GSV:

GSV = (GSV Factor x Total Premiums Paid) + (GSV Factor x Accrued Bonuses or Paid-up Additions) - (Already Paid Survival Benefits)

GSV Calculation Example:

Rohan pays ₹20,000 every year for 7 years towards his Aditya Birla whole life policy, then decides to surrender it.

• Total premiums paid = ₹1,40,000
• Eligible premiums (excluding 1st year) = ₹1,20,000
• Bonus earned so far = ₹15,000
• GSV factor for Year 7 = 30%

GSV = (30% × ₹1,20,000) + (30% × ₹15,000) = ₹40,500

So Rohan gets around ₹40,500 back, against the ₹1,40,000 he paid.

Note: The 30% factor here is just for example; your actual GSV factor depends on your plan and is mentioned in your policy document.

Special Surrender Value (SSV)

Also known as non-guaranteed surrender value, SSV reflects the actual market value of the investments and is determined periodically by the company itself. Most of the time, it is equal to or higher than GSV.

It should be noted that SSV is not guaranteed and can be revised by the insurer based on the following factors:

• Sum Assured
• Bonus
• Policy Term
• Premiums Paid
• Changing investment returns
• Market values of underlying assets like stocks, commodities, and more
• Demographic experience and other factors

How to Calculate SSV:

SSV = [Original Sum Assured x (Number of Premiums paid / Number of Premiums payable) + Total bonuses received] x Special Surrender Value Factor.

Aditya Birla Life Insurance Contact Details

For any further assistance, you can directly reach out to a customer care representative of Aditya Birla Life Insurance company using the details given below:

• Call: 1800 270 700 (India); +91 22 66917777 (International)
• Email: [email protected]
• Mailing Address: One Indiabulls Centre Tower 1, 16th Floor, Jupiter Mill Compound, 841, Senapati Bapat Marg, Elphinstone Road, Mumbai- 400013.