LIC Surrender Value Calculator

Both existing LIC policyholders and new users can use the LIC surrender value calculator for free on the LIC’s official website.

What Is the LIC Surrender Value Calculator?

The surrender value calculator by LIC of India is a very easy online tool that helps policyholders to estimate the payout value in case they wish to surrender their policy before its maturity deadline. The LIC India Surrender Value calculator asks for some basic details like which LIC policy did you have, sum assured, policy term in years, annual premium, years for which you have paid the premium, bonus pile up and the frequency of premium paid. Now the calculator provides you with details of the amount that you are entitled to receive if you surrender the policy.

The LIC policy surrender value calculator simplifies the calculations and eliminates the need for manual effort upon surrender of life insurance policies. If you are looking for how to check LIC surrender value, you can use this calculator for estimated results as it helps policyholders better understand their options, making it easier to decide whether to keep their policy or surrender it.

When can you surrender the policy?

LIC Policy can be surrendered after completing one full year with regular premium payments as per your frequency. As per LIC’s official website, the LIC surrender value is payable after 3 full years of premiums are paid. It is suggested to confirm your GSV and SSV payout duration in your policy’s brochure from the LIC’s official website. Higher of both digits shall be paid to the policyowner.

Typically, if you surrender the LIC policy before 2 years then no surrender value is payable. If you are exploring surrender rules for LIC plans for NRIs, it is important to check the specific policy terms, as surrender benefits may vary across plans. If you are planning to surrender your LIC policy, then you shall use the LIC of India surrender value calculator to get rough surrender value estimates, so that you know how much amount you will receive as per the date of your surrender.

The policy gets a surrender value depending on when you bought the policy:

Policies issued before 1 October 2024, usually obtains a surrender value after paying 3 full years of premiums.
Policies issued on or after 1 October 2024 obtain a special surrender value after 1 full year of premiums are paid.

Make sure to check your policy brochure and policy bond to know the exact details and how your policy navigates through the surrender rules.

How to Calculate Surrender Value of LIC Policy?

You can use the below mentioned formula to calculate LIC surrender value manually:

((Surrender Value =Number of Premiums Paid / Number of Premiums Payable * Sum Assured)+Accrued Bonuses) *Surrender Value Factor

Let's say:

Premium term: 20 years

Premium paid: 6 years

Sum assured: Rs. 5 Lakhs

Accrued bonus: Rs 1 Lakh

SSV factor: 30%

SSV = ((6/20*5,00,000)+1,00,000)*0.30
SSV = Rs. 75,000

SSV is higher than GSV as it depends on LIC’s evaluation in that financial year. The LIC policy surrender value calculator shows the higher value as your surrender amount.

As you can see, the manual calculation using this complex formula would be time consuming and there may be errors during calculation. The LIC surrender value calculator was designed to help policyholders escape all this manual effort. Let us discuss how one can access and use the LIC of India Surrender Value Calculator.

Steps to Use the LIC Surrender Value Calculator

Follow the below mentioned steps to get your surrender value estimates using the LIC Surrender Value Calculator:
Step 1: Go to LIC’s official website and find the LIC calculator.
Step 2: Enter your basic details like Date of Birth and gender.
Step 3: Choose your LIC plan from the given list and adjust the policy details as per your requirement.
Step 4: Click on Calculate to get your premium options, select your preferred option and click on Get Illustration.
Step 5: An illustration including your surrender values will be presented to you. You can even download the results for future reference.

Sample Illustration Using LIC India Surrender Value Calculator

Let’s calculate a sample surrender value using the LIC Jeevan Labh 736 surrender value calculator (earlier LIC Jeevan Labh Plan 936 surrender value calculator )for better understanding.

Assume the figures as per the below mentioned details:

Age: 30 years
Chosen Plan: LIC Jeevan Labh 736

Policy Term: 25 years

Premium Payment Term: 16 years
Amount of Instalment Premium: INR 10,025

Mode of Premium Payment: Yearly
Sum Assured: INR 2,00,000
Rate of Assumed Future Investment Returns: 4%

Note: the Jeevan Labh Plan 736 is the latest version, the earlier version was plan no 936. Therefore, if you are looking for LIC Jeevan Labh Plan 936 Surrender Value Calculator, then you can refer to the above sample calculation.

Types of LIC Surrender Values

There are two types of values that are considered when you exit a policy before maturity:

Guaranteed Surrender Value (GSV): This value refers to the minimum payout that must be paid to you as per the IRDAI guidelines. It is calculated using the fixed percentages that are applied to the amount of premiums paid until the surrender. Usually it is lower and does not include any bonuses.

Special Surrender Value (SSV): This value is statistically higher and beneficial for the policyholder as the payout is calculated on the paid-up value along with the bonuses(applied as per the current financial year). It accounts to a significant bonus in the long term.

What is LIC Paid-Up Value?

In case the policyholder fails to pay premiums post the minimum premium term, then LIC does not directly terminate their policy. In fact, their LIC policy is converted to a paid-up policy by reducing the sum assured. This reduced sum assured depends on the number of years that you have paid the premiums for. So the sum assured under the paid-up policy is referred to as the paid-up value. So the special surrender value depends on your paid-up value as this is the reduced amount that you could have received on your maturity.

What is the Difference Between Guaranteed Surrender Value and Special Surrender Value?

What is the Surrender Value Factor (SVF)?

Anybody who wants to know about how to calculate LIC policy surrender value, needs to know about the Surrender Value Factor. LIC describes the surrender value factor as a predecided percentage that differs for every policy year and is used to compute the surrender value during surrender. The percentage keeps changing throughout the policy term. For the first year it is typically zero and keeps on increasing gradually with time. You can access the LIC surrender value chart in your policy brochure for reference.

By using an online LIC surrender value calculator or a similar tool, it is implied that the surrender value factor has been integrated into the calculation. This gives policyholders a more precise estimate of their surrender benefits, eliminating the need for manual calculations.

How to Surrender your LIC Policy?

In order to surrender your LIC policy, you should carry the original documents used at the time of policy purchase to your specified LIC branch where the advisor will help you digitalise your application using their online portal.

Here’s how to surrender LIC policy in simple steps:

Step 1: Visit the LIC Branch or Website for online LIC withdrawal.

Step 2: Download the “Surrender Discharge Voucher” (LIC Form No. 5074).

Step 3: Fill the form with the required details and attach the documents required.

Step 4: Go to your nearest branch to submit the duly filled form. Carry your policy bond and other necessary documents for verification.

Step 5: After completing all the documentation, the surrender value will be credited to your bank account within 7-10 days.

What Documents are Required to Surrender LIC policy?

Bring along all the below mentioned documents and make sure that they are valid:

• Surrender request form

• Original policy bond

• Identity proof

• Address proof

• Letter of reason

• Cancelled cheque for bank details

• Valid ID proof (PAN, Aadhaar)

What are the Benefits of Using an LIC Policy Surrender Value Calculator?

• Faster calculations: Entering your basic data and clicking “calculate” is all that is required from the user. LIC’s surrender value calculator allows easier and faster estimations.

• Transparency in results: The results displayed are true to the given formulas by LIC and can be trusted by the policyholder. So the amount that you may possibly receive is very close to the estimations by the LIC calculator and it helps you to know your policy’s worth.

• User-friendly: The LIC surrender calculator is simple and can be learnt to use by people of all ages as it is very straightforward.

• Informed decision making: The estimation provides the user with a clear breakdown of GSV, potential bonuses and SSV which helps you understand the need to do it now or you can wait further for better returns. The returns increase with time so if you basically, the early you surrender, the less payout you receive.

Is Using the LIC of India Surrender Value Calculator Helpful?

LIC surrender value calculator is an easy web tool that helps the user to estimate the payout that he/she may receive if they surrender the LIC policy before its maturity. LIC of India policy surrender value estimates promote clear and informed future financial decisions in the event of surrender. For people sitting across the world, it becomes difficult to make such decisions without proper calculations, hence LIC policy surrender value calculator helps them to ease their uncertainty and make a smart choice.

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