Surrender value is calculated on reduced sum assured/paid up value.
Paid up value = No of premium paid/total number of premium payable x sum assured.
Just For Example :-
Sum Assured – Rs.500000/- ,
Premium – Rs.1545/-
Age at Entry – 35 Years ,
Maturity Age at – 60 Years ,
Premium Paid From – May 2017
Premium Paid Upto – October 2023
Now Calculate
Total Number of Premium Paid = May 2017 to October 2023 = Total 78 Months
Total Months of Premium Payabale = (60-35)x12 = 300
Paid up value = No of premium paid/total number of premium payable x sum assured.
= (78/300)x500000 = Rs.1,30,300/-
Surrender Value is equal to Surrender Factor x (paid up value+ proportionate bonus)
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