What do you understand by the Surrender Value?

The term Surrender Value specifies an amount the policyholder will get from the life insurance company if they decide to exit the policy before maturity. Eventually, it is a loss for the policyholders because they don’t fulfill the insurance company’s criteria. Some other names of surrender value are surrender cash value or, in the case of annuities, called annuity surrender value.

For example, suppose you have paid 15000 rupees (5000 per year x 3) in the initial three years for a sum assured of 1.5 lakh rupees, and you decide to exit the policy before maturity, so the minimum surrender value you can get is 30% of 10000, which is 3000 rupees.