When we talk about life insurance policy, the first name that comes to our mind is LIC. The life insurance products of LIC have gained unparalleled trust by Indians. Some products have even gained so much popularity that people buy them without giving them a second thought. However, sometimes due to various reasons a policyholder has to cancel the LIC policy. In such a case, there are some conditions that you must keep in mind while canceling the policy.Read more
Cancellation or surrender of LIC policy is the termination of the policy before its maturity. The amount that you get when surrendering your LIC policy in the mid-term is termed as surrender value. Generally, with regular life insurance policies, the surrender value is calculated only after you, as an insured, have paid premiums for at least three consecutive years.
However, canceling or surrendering an insurance policy is not recommended as the surrender value of LIC is comparatively lower than what you get as maturity amount. Moreover, in case of surrender before three years, no surrender value is offered.
LIC does not recommend the cancellation of its insurance policies. However, if you want to cancel your LIC policy because you do not like its features and benefits, then you must make this decision within 15 days of receiving the policy documents.
According to LIC, you have all the rights to cancel a LIC policy, before 15 days of receiving the policy documents. If you are not satisfied with the terms and conditions of the LIC policy, you bought. This time is known as the free-look period. In this case:
If you have decided to cancel your LIC policy after the free-look period, you must consider the following guidelines issued by the Life Insurance Corporation (LIC) of India:
Here are some of the implications that you have to bear when you cancel a LIC policy after its free-look period:
Once you have made up your mind to cancel your LIC policy, you should approach the local LIC branch (the one from where you have purchased your LIC policy) and give an application to surrender or cancel it. You can download the surrender form from the official website of the company. Fill this form and submit it to the local branch of LIC along with the surrender or cancellation form, you must submit the following documents:
Even a life insurance policy issued by LIC has its terms and conditions, and as a policyholder, you are requested to read them very carefully before purchasing a policy. The period after which you can surrender a LIC insurance policy varies from one policy to another. It depends on the premium paying terms and their purchase time. Generally, the minimum period for surrendering a LIC insurance policy depends on the following scenarios:
So, in a nutshell, we can say that by canceling your LIC policy, you lose out on many benefits of the scheme. If you surrender or cancel your LIC policy before a definite period, you may get a lesser surrender value than the premiums that you have paid against it. Therefore, retaining your LIC policy without allowing it to lapse is the best way not to lose your money as well as your life insurance protection.
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