Definition
Special Surrender Value (SSV)
Special Surrender Value is a discretionary surrender amount based on the policy's paid-up value and bonuses, usually higher than the guaranteed surrender value.
The SSV reflects the actual accrued value of a traditional policy and is derived from the paid-up sum assured and vested bonuses, discounted by a surrender value factor that the insurer sets and reviews periodically. When a policyholder surrenders, the insurer pays whichever is higher of the GSV and SSV.
Because SSV factors are not guaranteed and can be revised, the SSV can change over time. Recent IRDAI norms on surrender values were aimed at giving policyholders fairer exit values, especially in the early-to-middle years of a policy.
Related terms
- Guaranteed Surrender Value (GSV)Guaranteed Surrender Value is the minimum amount, fixed by regulation, that a traditional life policy must pay if the holder surrenders it after acquiring surrender value.
- Paid-Up ValuePaid-up value is the reduced sum assured a policy retains if the holder stops paying premiums after acquiring surrender value, instead of surrendering it.
- SurrenderSurrender is the voluntary termination of a life policy by the holder before maturity, in exchange for the surrender value.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.