LIC Policy Surrender Status Online

Life Insurance Corporation of India, popularly known as LIC is one of the largest and oldest life insurance companies in India. With an enormous customer base of more than 250 million, LIC is India’s most renowned insurer. LIC offers a wide range of insurance plans ranging from term insurance policies to savings and investment plans. These plans help to keep your family’s long-term goals safe and secure and they also look after your loved ones in case of your absence. You can select a policy term as per your requirements.

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However, do you know what to do if you are not satisfied with the policy's terms and conditions or wish to discontinue it before the completion of the selected term? Does LIC have this provision of surrendering the policy before it matures? Yes. The closing/discontinuation of the policy is called surrendering and now you can check LIC policy surrender status online.  Let’s discuss this in detail: 

What Do You Understand by Surrendering LIC Policy? 

Surrendering a LIC policy means withdrawing or giving it up before its tenure is over. LIC provides the provision to surrender policy anytime anywhere and whenever a policyholder wishes to. Policyholders majorly surrender their policy because they are not satisfied with the terms and conditions, features, and benefits of the policy. 

An insured is only allowed to surrender his/her policy after paying the premiums continuously for the initial three years of the policy. At the time of surrendering the policy, the insurance company pays the surrender value, i.e. a certain part of the money, and the coverage is ended. 

Though surrendering of LIC policy is not recommended as a right option as the surrender value is always low proportionately. As per the researchers, instead of surrendering your LIC policy, you can convert it to paid up to evade any kind of penalty. 

How To Check LIC Policy Surrender Status Online? 

Follow the below-mentioned steps, if you want to surrender your LIC policy online: 

  • Visit the official website of LIC 
  • Register as a new user and if you are already registered then click ‘login here’ 
  • Login to the LIC portal and select ‘Enrol Policies’ displayed on the left side of the page  
  • Click on ‘Click to Enrol New Policies’ and hit on ‘Proceed’
  • Then, enter the required details such as policy number, premium amount, and the policyholder’s name. Click ‘Enrol your policy’. 
  • After enrolling in the policy, click ‘view enrolled policy’
  • Select ‘Click for details’ from the policy lists under the column ‘Loan and Bonus’
  • The loan eligibility and the surrender value can be found here. 

Note – If you have taken a loan against your LIC insurance policy, the suitable amount will be deducted from the surrender value. 

You can also apply for surrendering LIC policy offline by visiting it’s any of the branches. Follow the below steps to surrender LIC policy offline: 

  • Visit the nearest branch of LIC, try to visit the branch from where the policy is purchased. 
  • Ask the type of surrendering from the LIC office or you can also download the LIC policy Surrender Form directly from the website of LIC. 
  • To surrender the LIC policy, submit the relevant documents such as ID proofs, Aadhar card, PAN card, and canceled cheque with your name written on them. 
  • After completion of all the formalities, the cash will be transferred to your registered bank account within 7-10 working days. 

How to Calculate LIC Surrender Value? 

As we have discussed above, surrender value is the certain portion of money or amount that is paid to the policyholder by the insurance company before the date of maturity. In other words, it means the closing of the policy before the maturity date. Surrender value is only payable on insurance plans having a savings element attached to it. The calculation of the surrender value is based on the premiums paid by the life assured till the surrender date. 

There are two types of surrender values: 

Guaranteed Surrender Value – It is the amount paid by the insurance company to the policyholder, if in case he/she surrenders the policy before the date of maturity and after the plan has attained surrender value. Generally, a certain % of the total amount of premium that the life assured pays, is the surrender value. The % might vary depending on the type of policy and plan’s term. Typically, the surrender value % parameter increases as the plan reaches the date of maturity. Guaranteed Surrender value is the 30 percent of the overall premiums that a policyholder has paid. The surrender value excludes the premiums paid during 1st policy year and rider premiums. 

For Example 

Saloni paid Rs. 30,000i.e., Rs 10,000 X 3 in starting 3 years of the policy for a SA (sum assured) of Rs. 3 Lakh. In this, the minimum value for surrender, Saloni will receive is 30 percent of 20,000, which becomes Rs. 6000. 

Special Surrender Value – If the life insured stops paying premium amounts after a fixed period, the plan would continue, but at a lower SA, called as paid-up value. The formula for calculating paid-up value is – 

Original Sum Assured X quotient of paid premium and number of premiums payable. 

Upon the policy discontinuation, a life assured receives a special surrender value which is computed as the sum of the total bonus and paid-up value, multiplied by the factor of surrender value. 

For Example 

Let’s say if Rs. 15,000 is paid by Saloni on yearly basis for a SA of Rs. 3 Lakh for a policy term of 20 years. She stopped paying premiums from 4th year. If Rs. 30,000 comes out to be a bonus and 30% is the surrender value factor, then the paid-up value will be equivalent to Rs. 60,000. The Special Surrender Value will be [(60,000 + 30,000) X (30/100)] i.e., Rs. 27000. 

Documents Required for Determining LIC Policy Surrender Status Online? 

Following are the documents required for surrendering LIC policy: 

  • The bond of the policy i.e. policy documents 
  • Form No. 5074 of LIC Policy Surrender 
  • Information related to the policyholder’s registered bank account 
  • ID proofs such as PAN card, Aadhar, driving license, and voter’s ID. 
  • Canceled cheque from the policyholder’s bank 

Wrapping It Up! 

Now you can surrender your LIC policy if you are not satisfied with the policy’s terms and conditions through an online mode. You can also determine LIC policy surrender status online by visiting LIC’s official website. You can only surrender the policy after three years. This means that you are required to hold the policy for a minimum period of three years. Instead of surrendering the LIC policy, it is recommended to make the policy a paid-up one. The paid-up policy provides a death benefit on maturity while surrendering.

Written By: PolicyBazaar - Updated: 30 September 2021
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