A lot of people buy LIC policies without knowing the conditions and terms completely. This can result in the surrender of LIC policy before maturity and thereby reducing the amount of money one is entitled to get through the policy.
However, due to lifestyle changes, financial obligations, or other personal reasons, inevitable situations can lead to the policyholder withdraw his/her LIC policy after 5 years.
However, suppose the policyholder is not aware of the documents and process involved. In that case, he/she may not get the plan benefits applicable.
Read this article till the end to know everything about LIC withdrawal after 5 years.
As stated above, it is generally not recommended to surrender or withdraw a LIC policy, but should the need arise, it is important to keep in mind the criteria for eligibility for this will be three years. This means you need to pay the premiums of your LIC policy constantly for its initial three years before surrendering or withdrawing. In your case (if you are looking to withdraw your LIC policy after 5 years), you are eligible to withdraw the policy.
After you've surrendered the LIC coverage, the insurance company will give you the amount referred to as ‘surrender value’ that may contain 'accumulated bonus' along with the premiums you paid for the period after deducting some charges.
If 5 years have passed after you purchased your LIC policy, you are eligible for policy withdrawal. However, keep in mind that currently, the facility of surrendering LIC policy is not available online. So, it would be best if you surrendered the LIC policy through the service branch of LIC.
Ideally, this would be the place from where you have bought your LIC policy. Additionally, suppose you have switched branches, and it is the new branch. In that case, that LIC branch will be the service center that you can use to surrender your policy. The reason to approach a service branch for policy surrender is that all your policy documents, including proposals forms, loan information, and other information will be accessible at the service branch only.
Remember that you need to personally visit the branch to request to surrender your LIC policy if it's over 5 years.
Failing to submit the exact documents needed to withdraw your LIC policy after 5 years can either extend the process or lead to the termination of your application.
Here is the list of important documents you would need to proceed with the application:
Note that LIC typically examines the conditions and terms surrounding the surrender value based on factors like experience, economic environment, etc.
If you have decided to withdraw your LIC policy after 5 years, you need to be aware of the below-mentioned implications:
Withdrawing your LIC policy after 5 years comes with a couple of demerits, as listed below:
LIC policy withdrawal is a delicate process. You need to know various things like documents required, eligibility, implications, and the disadvantages of withdrawing your LIC policy after 5 years or before maturity. We have covered all these points in detail in this article. Make sure you understand all the aspects, assess your financial situation (think twice), and then make an informed decision that is in the best interests of you and your dependents.
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^Trad plans with a premium above 5 lakhs would be taxed as per applicable tax slabs post 31st march 2023
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