What Is LIC Paid-Up Sum Assured?

When managing your life insurance with the LIC, understanding the concept of Paid-Up Sum Assured is important for making informed decisions about your policy. This term plays a significant role in determining the benefits and coverage of your insurance policy if you decide to stop paying premiums. 

Read more
LIC Plans-
Buy LIC policy online hassle free
Tax saving under Sec 80C & 10(10D)^
Guaranteed maturity with life cover for securing family's future
Sovereign guarantee as per Sec 37 of LIC Act
LIC life insurance
We are rated~
rating
7.7 Crore
Registered Consumer
53
Insurance Partners
4.2 Crore
Policies Sold
Now Available on Policybazaar
Grow wealth through
100% Guaranteed Returns with LIC
+91
Secure
We don’t spam
View Plans
Please wait. We Are Processing..
Your personal information is secure with us
Plans available only for people of Indian origin By clicking on ''View Plans'' you, agreed to our Privacy Policy and Terms of use #For a 55 year on investment of 20Lacs Tax benefit is subject to changes in tax laws
Get Updates on WhatsApp
We are rated~
rating
7.7 Crore
Registered Consumer
53
Insurance Partners
4.2 Crore
Policies Sold

What is the Paid-Up Sum Assured in LIC?

The Paid-Up Sum Assured in LIC refers to the coverage that remains under your life insurance policy when you stop paying premiums, provided the policy has been in force for a sufficient period. When an LIC policy becomes paid up, the policyholder has discontinued premium payments, but the policy remains active with a reduced benefit amount. This reduction is based on the premiums paid and the policy’s terms.

How is Paid-Up Sum Assured Calculated in LIC?

Calculating the Paid-Up Sum Assured in LIC involves several factors:

  • Original Sum Assured: The amount initially promised by the policy to be paid out on death or maturity.

  • Number of Premiums Paid: The total number of premiums paid before the policy is converted to paid-up status.

  • Policy Term: The length of the policy term and how long the policy has been in force.

  • Policy Type: LIC offers various policies, and the calculation method for Paid-Up Sum Assured can vary depending on the type of policy (e.g., endowment, whole life, or money-back).

For example, suppose you have a LIC policy with an original sum assured of ₹10 lakh and have paid premiums for 15 years out of a 20-year policy term. In that case, the Paid-Up Sum Assured will be a proportion of the original sum, adjusted according to the policy's paid-up value formula.

Why is Paid-Up Sum Assured Important?

  • Flexibility: The Paid-Up Sum Assured provides flexibility if you can no longer afford to continue premium payments. It allows you to retain a reduced level of coverage without further financial commitment.

  • Continued Protection: Even though the benefits are reduced, a paid-up policy still offers protection and can be beneficial if you need to ensure some level of insurance coverage.

  • Policy Continuity: Knowing about the Paid-Up Sum Assured helps in understanding how your policy will function if you decide to stop paying premiums and ensures that you’re not caught off guard by reduced benefits.

Advantages of Paid-Up Sum Assured

  • No Further Premium Payments: Once your policy becomes paid-up, you are relieved from making further premium payments while still retaining a degree of coverage.

  • Reduced Benefits: Although the benefits are reduced, having a paid-up policy ensures that you still receive some payout, whether at maturity or in case of an insured event.

  • Surrender Value: A paid-up policy often accumulates a surrender value, which can be beneficial if you decide to terminate the policy before maturity.

Wrapping It Up:

Understanding the Paid-Up Sum Assured is crucial for managing your LIC policy effectively. It offers a way to keep your insurance coverage active even when you can no longer afford to pay premiums, albeit with reduced benefits. To make informed decisions about your policy and understand how the Paid-Up Sum Assured affects you, it’s advisable to consult with your LIC agent or financial advisor for personalized guidance and support. This will ensure that you can navigate your insurance options wisely and secure your financial future.

FAQ's

  • Q: How does a policy become paid up with LIC?

    Ans: A policy becomes paid up when you stop paying premiums after a certain period, as specified in the policy terms. LIC policies typically need a minimum number of years of premium payments before they can be converted to paid-up status.
  • Q: What happens if I convert my LIC policy to Paid-Up Status?

    Ans: When you convert your LIC policy to Paid-Up Status, the policy remains active with a reduced sum assured. The benefits and coverage are adjusted based on the premiums paid up to that point.
  • Q: Can I reinstate my LIC policy after it becomes paid-up?

    Ans: LIC policies often allow reinstatement, where you can resume premium payments and restore the policy to its original terms. Consult with your LIC agent for specific reinstatement options and conditions.
  • Q: How does the Paid-Up Sum Assured affect the maturity benefits?

    Ans: The maturity benefits of a paid-up LIC policy are based on the Paid-Up Sum Assured. This amount is less than the original sum assured, and the final payout will reflect the reduced value.
  • Q: Are tax implications for the Paid-Up Sum Assured in LIC policies?

    Ans: Generally, the Paid-Up Sum Assured is subject to the same tax rules as the original policy. Premiums paid and benefits received may have tax implications under current tax laws, so keep accurate records and consult a tax advisor as needed.

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
^Trad plans with a premium above 5 lakhs would be taxed as per applicable tax slabs post 31st march 2023
+Returns Since Inception of LIC Growth Fund
~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ
++Returns are 10 years returns of Nifty 100 Index benchmark
Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in

LIC of India
LIC Plans
LIC Amritbaal
LIC Index Plus
LIC Jeevan Dhara II-872
LIC Jeevan Utsav
LIC Jeevan Kiran
LIC Dhan Vriddhi
LIC Monthly Investment Plans
LIC Jeevan Azad
LIC 1 Crore Endowment Plans
LIC Jeevan Labh 1 Crore
LIC Crorepati Plan
LIC Dhan Varsha - Plan No. 866
LIC Pension Plus Plan
LIC New Jeevan Shanti
LIC Bima Ratna
LIC Group Plans
LIC Fixed Deposit Monthly Income Plan
LIC Savings Plans
LIC’s New Jeevan Anand
LIC New Jeevan Anand Plan 915
LIC's Saral Jeevan Bima
LIC's Dhan Rekha
LIC Jeevan Labh 836
LIC Jeevan Jyoti Bima Yojana
LIC Child Plans Single Premium
LIC Child Plan Fixed Deposit
LIC Jeevan Akshay VII
LIC Yearly Plan
LIC Bima Jyoti (Plan 860)
LIC’s New Bima Bachat Plan 916
LIC Bachat Plus Plan 861
LIC Policy for Girl Child in India
LIC Samriddhi Plus
LIC New Janaraksha Plan
LIC Nivesh Plus
LIC Policy for Women 2024
LIC Plans for 15 years
LIC Jeevan Shree
LIC Jeevan Chhaya
LIC Jeevan Vriddhi
LIC Jeevan Saathi
LIC Jeevan Rekha
LIC Jeevan Pramukh
LIC Jeevan Dhara
LIC Money Plus
LIC Micro Bachat Policy
LIC Endowment Plus Plan
LIC Endowment Assurance Policy
LIC Bhagya Lakshmi Plan
LIC Bima Diamond
LIC Anmol Jeevan
LIC Bima Shree (Plan No. 948)
LIC Jeevan Saathi Plus
LIC Jeevan Shiromani Plan
LIC Annuity Plans
LIC Jeevan Akshay VII Plan
LIC SIIP Plan (Plan no. 852) 2024
LIC Jeevan Umang Plan
LIC Jeevan Shanti Plan
LIC Online Premium Payment
LIC Jeevan Labh Policy-936
LIC Money Plus Plan
LIC Komal Jeevan Plan
LIC Jeevan Tarang Plan
LIC Bima Bachat Plan
LIC’s New Money Back Plan-25 years
LIC Money Back Plan 20 years
LIC Limited Premium Endowment Plan
LIC Jeevan Rakshak Plan
LIC New Jeevan Anand (Previously LIC Plan 149)
LIC New Endowment Plan
LIC Varishtha Pension Bima Yojana
LIC Investment Plans
LIC Pension Plans
Show More Plans
LIC Calculator
  • One time
  • Monthly
/ Year
Sensex has given 10% return from 2010 - 2020
You invest
You get
View plans

LIC of India articles

Recent Articles
Popular Articles
LIC Index Plus Plan Details

15 Oct 2024

2 min read

The LIC Index Plus plan is a ULIP offered by the Life Insurance
Read more
How to Buy LIC Index Plus from Policybazaar?

15 Oct 2024

3 min read

The LIC Index Plus combines the benefits of insurance and
Read more
LIC Index Plus Premium and Maturity Calculator

10 Oct 2024

2 min read

The LIC Index Plus Premium and Maturity Calculator is a valuable
Read more
Understanding LIC Surrender Value

07 Oct 2024

3 min read

Surrendering the LIC policy is an important aspect of LIC
Read more
Understanding LIC Annualized Premium: A Comprehensive Guide

20 Sep 2024

4 min read

When it comes to securing your financial future through life
Read more
LIC Online Premium Payment

3 min read

The LIC Online Payment by Policybazaar enables policyholders to pay their insurance premiums online at their
Read more
10 Best LIC Plans to Invest in 2024

2 min read

LIC Policies are the best option for investing your hard-earned money. As LIC is a government-backed entity, one
Read more
Surrendering LIC Policy Before Maturity Time: Your Guide!

3 min read

The surrender value of an LIC policy is the amount given to the policyholder if they cancel their policy before
Read more
How to Check the Maturity Amount of LIC Policies?

4 min read

The LIC maturity value is the amount payable to the policyholders at the end of their policy term. To calculate
Read more

top
Close
Download the Policybazaar app
to manage all your insurance needs.
INSTALL