LIC Surrender Value Calculator

Let's understand how the LIC surrender value calculator works and how to use it. 

What Is the LIC Surrender Value Calculator?

The LIC Surrender Value Calculator is an online tool by LIC of India designed to help policyholders estimate the amount they may receive if they surrender their policy at any given point in time. By entering details such as policy type, premium amount, number of premiums paid, and policy term, the calculator provides an approximate surrender value instantly.

It calculates:

• Guaranteed Surrender Value (GSV)

• Special Surrender Value (SSV)

• Cash Value of Bonuses (if applicable)

• Deductions or charges

LIC surrender value calculator commonly refers to LIC Calculator, a tool that provides a detailed and standard illustration. It includes information on maturity benefits, bonuses, surrender values, etc, specific to your policy, based on your provided details. Using the online LIC surrender value calculator and checking the detailed illustration, where the surrender values are specified for every policy year, can save time and provide valuable clarity. It helps policyholders make informed decisions about whether to continue or surrender their policy, without relying on manual calculations. It’s a simple way to understand the financial implications of surrendering a policy before taking action.

Example of LIC Surrender Value Calculation
Let’s assume:
Yearly premium: Rs. 20,000
Years completed: 6 years
Sum assured: Rs. 5 Lakhs
Accrued bonus: Rs. 1 Lakh
GSV factor: 30%
GSV = (20,000 x 6 - 20,000) x 30% = (1,00,000 - 20,000) x 30% = Rs. 24,000
SSV could be higher, depending on LIC’s valuation. The calculator shows the higher value as your surrender amount.

How to Use LIC Surrender Value Calculator Online?

To use the LIC policy surrender value calculator, follow these simple steps:

Step 1: Go to LIC official website.

Step 2: Navigate to “Premium Calculation”

Step 3: Provide details such as name, DOB, contact, etc. Click on “Next” then choose “Quick Quote”.

Step 4: Select the plan and click on “Coverage”

Step 5: Insert policy details such as Sum Assured and Policy Term.

Step 6: After the calculator shows you premium amounts in various payment modes, select the premium paying mode of your policy to view the detailed illustration. 

The illustration will show you a table with the surrender value of the policy in various policy years. This process of LIC surrender value check online helps policyholders who want to know how to check surrender value of LIC policy accurately from the comfort of their home, without having to visit the LIC branch.

Sample Illustration of LIC Surrender Value Calculation

Let's say you have an active LIC Jeevan Anand policy. At the age of 30, you purchased it with a sum assured of Rs 5 Lakhs for a term of 35 years at an annual premium of Rs 17,921.

Here is the amount you will be refunded after policy surrender as per how many years the policy was in-force, assuming the non-guaranteed benefits are at 8%.

The surrender benefit payable will be the higher amount between Total Guaranteed Surrender Value (with vested bonuses) and Special Surrender Value. Using the LIC policy surrender value calculator, you can see how your policy term, premiums and bonuses affect the surrender value.

How is LIC Surrender Value Calculated?

You also use this formula to calculate your LIC surrender value manually:

What is Surrender Value Factor (SVF)?

The surrender value factor (SVF) represents the percentage of the policy's paid-up value that the policyholder is eligible to receive upon early LIC policy cancellation. This factor is determined by LIC and varies based on several elements such as the policy term, number of premiums paid, and the type of plan. The longer the policy has been in force and the more premiums paid, the higher the surrender value will be offering a better payout.

When using an online LIC surrender value calculator or LIC policy surrender value calculator, the SVF is already integrated into the calculation, providing policyholders with a more accurate estimate of their surrender benefits without needing to compute the factor manually.

Importance of Knowing Your Surrender Value Before Surrendering

Before initiating a LIC policy cancellation through surrender, it’s important to understand what you may be giving up. Here’s why:

• Avoid Unexpected Losses: Most LIC policies acquire surrender value only after at least two years of premium payments. If surrendered before that, the payout may be very low or even zero.

• Understand the Policy’s Worth: LIC policy surrender value calculation helps estimate how much you might receive if you exit now. This prevents surprises and gives you a clear picture of what you're trading off.

• Compare Short-Term Needs vs. Long-Term Gains: Surrendering an LIC policy may meet an immediate cash need, but you could lose future benefits like maturity returns, bonuses, and life coverage. Comparing your current needs with long-term benefits is essential before taking action.

• Explore Better Alternatives: If the estimated LIC surrender value is low, you might consider other options like a loan against the policy. This way, you can meet urgent financial needs while keeping the policy active.

Benefits of Using an LIC Surrender Value Calculator

• Quick and Accurate Estimates: Enter your policy details, such as term, premium amount, duration, etc and instantly get an estimate of your LIC policy surrender value. This allows for better planning without manual calculations.

• Easy to Use, No Expert Knowledge Needed: These calculators are beginner-friendly. Whether you’re tech-savvy or not, the interface is simple and requires only basic inputs to generate results.

• Provides a Complete Policy Illustration: Whether you call it a LIC calculator or a surrender value calculator, the result is the same, a detailed breakdown that includes bonuses, maturity benefits, and surrender values, empowering you with clarity of policy details.

What is LIC Surrender Value?

When a policyholder voluntarily decides for LIC policy surrender before maturity, LIC pays a portion of the paid premiums as surrender value. This amount varies depending on the type of plan, payment history, bonuses, and duration.

The LIC Policy Surrender Value Calculator enables users to input policy details like plan name, sum assured, policy term, premium frequency, annual premium, and years of premiums paid. Based on these inputs, it gives an approximate value you can expect upon surrender.

When Does a Policy Start Building Surrender Value?

• Traditional plans (Endowment, Money-Back, etc.) start gaining surrender value after 2–3 years of full premium payments.

• ULIPs (Unit Linked Insurance Plans) build fund value from day one, but money can’t be withdrawn until the lock-in period ends.

Types of LIC Surrender Values

LIC offers two main types of surrender values, Guaranteed Surrender Value (GSV) and Special Surrender Value (SSV). LIC calculates both GSV and SSV at surrender, and the higher amount is paid to the policyholder.

Guaranteed Surrender Value (GSV)

The Guaranteed Surrender Value is the minimum amount payable to a policyholder who surrenders the policy after paying premiums for a specified period (usually 3 years). This LIC surrender value is calculated as a fixed percentage of total premiums paid (excluding bonuses and rider premiums) and ensures a minimum assured payout.

Special Surrender Value (SSV)

The Special Surrender Value is a higher, non-guaranteed amount determined by LIC based on the policy’s duration, paid-up value, and current bonus rates. It is dependent on the insurer’s current financial and policy performance.

Documents Required to Surrender LIC policy?

To surrender your LIC plan, you need:

• Surrender request form (Form 5074)

• Original policy bond

• Cancelled cheque or bank details

• Valid ID proof (PAN, Aadhaar)

Summing Up

The decision to surrender a life insurance policy should never be taken in a hurry. Tools like the LIC surrender value calculator are important in helping policyholders understand the amount they will receive, ensuring transparency and better financial planning.

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