How to calculate Surrender Value?

[blurpandasg2014]

Can anyone help me with this problem? I am trying to figure out how to calculate surrender value of a life plan... in BI only gave till 40th policy year. I want to calculate how much will get on 45th/50th policy yr.

This is the information
Sum Assured: 50k
RB: $10 per $1000SA compounded at 1%
TB: Policy Year >15yr .... 64% On Death/TI/TPD (as a % of accumulated reversionary bonuses) .... 63% On Surrender (as a % of surrender value of accumulated reversionary bonuses)

From this info, I am able to calculate the death benefit based on the accrued RB and TB. However, I am unable to get the formula correct for Surrender Value.

Surrender value are as follow
15: $17732
20: $22552
25: $28536
30: $35545
35: $43543
40: $52726

Anyone can help? Thanks

 

[Shiny Things]

Surrender value are as follow
15: $17732
20: $22552
25: $28536
30: $35545
35: $43543
40: $52726

Dunno if there's an actual formula, but I'd guess about $63k in the 45th year and $75k in the 50th year.

The yield seems to go down by about 0.2% every five years at the tail end of the plan; so I used a 3.7% growth rate in the 40-45 year bracket and 3.5% in the 45-50 year bracket. (Incidentally that doesn't seem very generous - yield curves don't usually invert like that beyond the 30-year point, do they? Any rates traders know?)

 

[chopra]

Request your insurance company to give u the latest BI

 

[IFAadvisor]

Can anyone help me with this problem? I am trying to figure out how to calculate surrender value of a life plan... in BI only gave till 40th policy year. I want to calculate how much will get on 45th/50th policy yr.

This is the information
Sum Assured: 50k
RB: $10 per $1000SA compounded at 1%
TB: Policy Year >15yr .... 64% On Death/TI/TPD (as a % of accumulated reversionary bonuses) .... 63% On Surrender (as a % of surrender value of accumulated reversionary bonuses)

From this info, I am able to calculate the death benefit based on the accrued RB and TB. However, I am unable to get the formula correct for Surrender Value.

Surrender value are as follow
15: $17732
20: $22552
25: $28536
30: $35545
35: $43543
40: $52726

Anyone can help? Thanks

Hi,

You may not get the exact figures because you will never know how much TB the company will allocate to this policy. In some instances, even a call to the insurer will not give you the exact accurate amount. The good news is that it will not defer too much from the amount quoted.