Many policyholders ask, "Can I withdraw LIC policy online?" before initiating the surrender process. While certain services of the LIC Withdrawal Process are available digitally, the final process may vary depending on the policy type.

What Does Withdrawal of LIC Policy Mean?

The LIC Withdrawal Online process can be understood as when a policyholder decides to discontinue the policy before its term ends, they can submit an LIC online withdrawal request to surrender the policy and claim the applicable surrender value. The LIC policy withdrawal online process is a digital way to submit the request, upload the required documents, and even track the application status. After the LIC policy surrender before maturity is done, the policy benefits and life cover under the plan will cease.

Before opting for an LIC policy withdrawal online, it is important to understand how policy surrender works, the eligibility conditions, the surrender value that may be payable under the plan and when you can surrender the LIC policy. If you are wondering "Can I withdraw my LIC policy", it is important to first check whether your policy has acquired a surrender value and meets LIC's eligibility requirements.

How to Withdraw LIC Policy Online?

For a smooth LIC Withdrawal policy process online, follow the steps below:

Step 1: Log In

Access your account on the LIC India Portal. If you are a new user, you will need to register using your policy number, date of birth, and installment premium details.

Step 2: Download Form

Navigate to the Customer Services section and download Form No. 5074 (Surrender Discharge Voucher)

Step 3: Fill out details

Carefully enter your policy number, personal details, and the reason for the withdrawal.

Step 4: Prepare documents

Gather the following essential documents:

• Original policy document (bond)

• Filled and signed Surrender Form

• Government-issued ID proof (e.g., PAN Card, Aadhaar)

• Cancelled cheque from the policyholder's bank account (for NEFT credit)

• LIC NEFT Mandate Form (if bank details are not registered with them).

Step 5: Submit

While you can digitally initiate the request and upload scanned documents on the portal, you will generally need to submit the physical forms and the original policy bond to the nearest LIC branch to complete the process.

Types of LIC Withdrawal Policy

If you are wondering “How to Withdraw LIC Amount”, here are 3 types that you can withdraw from your LIC policy

Policy Surrender

The policy is permanently terminated, and LIC pays the applicable surrender value.

Example: Rahul purchased an LIC endowment policy with a 20-year term but decided to discontinue it after paying premiums for 8 years due to changing financial priorities. Since the policy had acquired a surrender value, he submitted a surrender request to LIC and received the eligible amount after verification.

Maturity Withdrawal

When the policy term ends, LIC pays the maturity benefit as per policy terms.

Example: After her LIC policy matured, Priya wanted to know how to withdraw LIC policy after maturity online. She logged into the LIC customer portal, verified her policy status, uploaded the required documents, and completed the claim process online. Once approved, the maturity proceeds were transferred directly to her bank account.

Partial Withdrawal

Available only in specific plans such as ULIPs after the lock-in period.

Example: Aman invested in an LIC ULIP and needed funds for his daughter's college fees after the mandatory lock-in period. Instead of closing the policy, he made a partial withdrawal, allowing him to meet his expenses while keeping the remaining investment active.

Those looking for "how to withdraw LIC policy after maturity online" can start by checking their policy status through LIC's online services and completing the required claim formalities.

When Can I Surrender LIC Policy?

LIC allows policyholders to surrender their policy only after it acquires a surrender value. The minimum period depends on the policy type and premium payment option.

Note: On surrendering a policy, LIC pays the applicable surrender value, which is generally lower than the total premiums paid and may be significantly less than the policy's maturity benefits. Therefore, policyholders should carefully evaluate alternatives such as policy loans or converting the policy into a paid-up policy before surrendering.

Am I Eligible to Surrender LIC Policy?

Yes, you are eligible to surrender your LIC policy online if you have completed the mandatory lock-in period.

Generally, it is not suggested to surrender the policy offered by LIC but in case of need, one can only surrender the policy after 3 years. This simply means that you need to hold a plan till a required period i.e., a 3-year timeframe before surrendering it. After surrendering the LIC policy, the insurance company will offer you a certain amount of money called an accumulated bonus along with the premiums paid for that particular time. You can check the amount that will be paid after withdrawal or surrender by using an LIC Surrender Value Calculator. It shows you the exact estimation of the amount payable upon LIC policy withdrawal.

What is Paid to the Policyholder in Case of Surrendering the LIC Policy?

As stated above, once a policy is surrendered, the surrender value is paid to the policyholder. The surrender value of LIC is determined to be higher than the Special Surrender Value or Guaranteed Surrender Value. What are these values? Let’s understand them in detail:

Guaranteed Surrender Value (GSV)

Guaranteed Surrender Value is generated using the following formula:
GSV = [Total premium paid X GSV Factor] + [Accrued Bonus X GSV Factor]

Always check the policy bond documents before purchasing the LIC policy as it is eligible for surrender value or not. This value is payable after the completion of three years. It is generally 30 percent of the paid premiums excluding the 1st premium amount and the premium paid for riders, taxes, and any type of bonus received from the insurer.
The surrender value % depends on the policy term and year of the policy in which it is withdrawn.

Special Surrender Value (SSV)

This is the value that is computed by the insurer depending on its performance. If the insurance company is making profits in the last few financial years, then the surrender value will be higher than the guaranteed surrender value. Like GSV, the SSV factor also increases with time.
If the life assured has paid his/her premiums on time for >3 years but <4 years, then 80 percent of the complete maturity amount is provided to the policyholder by LIC. If in case the policyholder has paid his/her premium for >4 years but <5 years, then 90 percent of the maturity amount is provided to the life assured. In addition to this, if he/she pays a premium for >5 years, then the policyholder receives 100 percent of the maturity amount.

Also read: How to Check LIC Surrender Value: A Step-by-Step Guide

Alternatives to LIC Policy Surrender

Make the Policy Paid-Up

Stop paying premiums while retaining reduced benefits.

Take a Policy Loan

Many LIC policies allow loans against the policy value.

Note: Before searching for "how to withdraw LIC money before maturity online", consider whether a policy loan can help meet your financial needs.

Continue the Policy

Maintaining the policy may provide better long-term benefits than surrendering early.

How Long Does LIC Take to Process a Surrender Request?

After successful document verification, LIC generally processes surrender requests within a few working days. The actual timeline may vary based on the policy type and branch procedures.

Documents Required for Surrendering the Policy

• Form 5074 – Surrender Discharge Voucher

• The original copy of the Policy bond

• Canceled Cheque from the bank of the insurance buyer

• Identification Proof such as Aadhar card, PAN Card, Driving license.

What are the Important Things to Know Before Surrendering LIC Policy?

• Lock-in Period: Most policies must be active and premiums must be paid for at least 2 to 3 years before they acquire a surrender value.

• Payout: Once the physical paperwork is verified and accepted at the branch, the surrender value is typically credited to your registered bank account within 7-10 working days.

• Policy Termination: Fully surrendering your policy permanently ends the life insurance cover. If you only need liquidity, consider taking a policy loan instead to keep your life coverage active.

Wrapping It Up!

If you choose to surrender the LIC policy, you can lose a lot of benefits provided by the insurer under the scheme. It is not recommended to surrender the policy but if the need arises, the minimum period for LIC withdrawal online is of three years. Therefore, holding the current policies and continuation of all plans without allowing them to lapse is one of the best criteria for continuing the policy. It is always advisable to read the terms and conditions, features and benefits before purchasing any policy.

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