Minimum Guaranteed Surrender Value (MGSV)

The Minimum Guaranteed Surrender Value (MGSV) is a fundamental aspect of insurance policies, especially in the context of Indexed Universal Life (IUL) policies. It encompasses:

• Guaranteed Minimum Return: This is the lowest sum assured to a policyholder upon surrendering the policy before its maturity.
• Contractual Stipulation: Specified in the policy agreement.

Purpose and Calculation:

• Safety Net Feature: Provides a guaranteed baseline return, irrespective of market fluctuations or index performance.
• Basis of Calculation: Generally, it's a portion of the total premiums paid, adjusted for any surrender charges and outstanding policy loans.

The MGSV offers policyholders a form of financial security, ensuring they receive a minimum specified return in scenarios where they choose to surrender their policy prematurely.