LIC Surrender Value Calculator

Let's take a look at the LIC surrender value calculator and how to calculate surrender value of LIC policy.

What Is the LIC Surrender Value Calculator?

The LIC surrender value calculator (also called the LIC policy surrender value calculator), an easy-to-use online tool from LIC of India, provides a simple way to determine the payout if you choose to terminate your policy before its full term. a clear and detailed view of your policy, including maturity benefits, bonuses, and the LIC surrender value based on the details you enter. This online tool provides the surrender value of an LIC policy, breaking it down year by year.

The LIC Surrender calculator simplifies calculations and eliminates the need for manual effort. It helps policyholders better understand their options, making it easier to decide whether to keep their policy or surrender it.

How to Use LIC Surrender Value Calculator Online?

Using the LIC policy surrender value calculator is simple. Here's how:

Step 1: Go to the official LIC website.

Step 2: Next, look for the "Premium Calculation" section.

Step 3: Next, you must fill in the required information, including your name, date of birth, and contact details.

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 example shows 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%.

Types of LIC Surrender Values Calculator

There are mainly two types of values considered when you exit a policy, Guaranteed Surrender Value (GSV) and Special Surrender Value (SSV):

Guaranteed Surrender Value (GSV)

It is the least amount you'll get if you surrender your LIC policy after paying premiums for the mandated period, which is typically three years. It is calculated as a fixed percentage of the total premiums paid, excluding bonuses and extra rider costs. '

Special Surrender Value (SSV)

The Special Surrender Value, on the other hand, is a greater, non-guaranteed amount. LIC determines the SSV based on the policy's duration, its paid-up value, and the current bonus rates.

What is the Surrender Value Factor (SVF)?

The surrender value factor (SVF) is the fraction of the policy's paid-up value the policyholder receives upon early cancellation. LIC establishes the surrender value, which depends on the main factors: policy term, number of premiums paid, and particular plan. Usually, the longer the policy is in force and the more premiums are paid, the greater the surrender value and the payout.

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 Calculate Surrender Value of LIC Policy?

You can use this general formula to calculate LIC surrender value manually:

Here's an example to show how to calculate surrender value of LIC policy:
Let's say:
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.

When is Surrender Value Payable?

• Surrender value is generally paid only in case the policyholder has paid continuous premiums for at least 2 complete years.

• If it is surrendered before 2 years, typically, no surrender value is paid.

• After 2 years, the surrender amount gradually increases with each additional year of premiums paid.

Benefits of Using an LIC Surrender Value Calculator

Fast Calculations: Input your key information, such as the policy term and premium amounts, into the LIC surrender value calculator. This allows you to swiftly determine your LIC surrender value.

Easy to use: The LIC policy surrender value calculator is simple and beginner-friendly, requiring only a few inputs.

Clear breakdown: An LIC Calculator or a surrender value calculator. It shows bonuses, maturity benefits, and the surrender value of an LIC policy, helping you understand your policy better.

Informed Decision-Making: The LIC Surrender value calculator can be used to figure out if you should surrender your policy now or keep it until its maturity for getting the benefits in future.

Transparency & Accuracy: It enumerates the Guaranteed Surrender Value (GSV) and Special Surrender Value (SSV) with the allocation of bonuses if any so that you can get to know the exact amount that can come to you.

Important Points to Keep in Mind About Surrender Value

Knowing about your surrender value is important before surrendering because of the following reasons:

Prevent losses: Most plans only pay out the LIC surrender value after a two-year period. If you surrender your policy early, you might get very little or nothing at all.

Know Your Policy’s Worth: You can find out the surrender value of your LIC policy ahead of time by using an LIC surrender value calculator.

Think about the future: While cashing out your policy might solve immediate problems, you could be giving up future benefits like life insurance coverage, bonuses, and the maturity value.

Examine your options: If the LIC surrender value is low, it might be better to take out a policy loan instead of surrendering the policy.

How does the LIC Surrender Value Calculator Work?

The following will help you understand how a LIC value calculator works and how to calculate LIC surrender value:

• Select your LIC plan (e.g., Jeevan Anand) in the LIC surrender value calculator.

• Add your sum assured to calculate your LIC surrender value.

• Add the policy term, such as 20 years.

• Enter the yearly premium figure (for example, ₹40,000).

• Add the number of years premiums have been paid, like 7 years.

• Incorporate any accrued bonus, such as ₹80,000, as it influences the surrender value of the LIC policy.

• Choose the premium payment frequency (e.g., annual) to obtain an accurate LIC surrender value estimate.

The LIC surrender value calculator helps you estimate your surrender value.

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.

How to Surrender your LIC Policy?

If you want to surrender your LIC policy, you should take the original policy document, KYC details, and Form 5074 (Surrender Discharge Voucher) to a LIC branch or upload them on their online portal together with a cancelled cheque. The surrender value is generally disbursed within 7-10 working days, usually for policies that have been active for at least 2 consecutive years.

Step-to-Step Surrender Procedure

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

Step 1: Get Form 5074: The Surrender Discharge Voucher (Form No. 5074) is available in PDF format or at your nearest LIC branch.

Step 2: Fill out the Form: Write your policy number and, if necessary, the reason for surrender.

Step 3: Prepare Documents: Policy Document Original.

Step 4: Submit the Request: Submit the documents to the nearest LIC branch.

The surrender value payment will be credited to your bank account within 7 to 10 working days.

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

Deciding to give up an LIC policy is not something to rush into. Resources such as the LIC surrender value calculator are invaluable, allowing policyholders to see exactly what they'll get, which promotes clarity and smarter financial choices.

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