Exploring the complexities of an insurance policy, especially when it comes to understanding its surrender value, is essential for policyholders. In this regard, LIC, one of the top names in the insurance industry, offers a powerful tool LIC Surrender Value Calculator. This tool helps policyholders in making well-informed decisions.
Surrendering an LIC policy is generally not advised, but there can be moments when policyholders may consider surrendering their policy to transfer funds towards higher-yielding investments.
In this article, we will delve into the steps involved in surrendering LIC policies and how to calculate the surrender value using the LIC policy surrender value calculator.
What is the Surrender Value in LIC Policy?
The surrender value of a policy refers to the amount that a policyholder is entitled to receive from the life insurer if they choose to terminate the policy before its maturity. Therefore, if a policyholder chooses to discontinue an LIC policy after a continuous period of three years, they can expect a reimbursement in the form of surrender value.
This surrender value is a portion of the premium amount that a policyholder pays during the initial years of the active policy. The insurer gives this sum to the policyholder after making the necessary deductions.
However, it is important to note that the policyholder needs to settle all the premiums for the initial three years of the policy. Once the LIC plan is surrendered, the insurer provides the surrender value using the LIC policy surrender value calculator, and the policy terminates entirely.
What is the LIC Policy Surrender Value Calculator?
In a life insurance policy, the insured pays regular premiums to the insurance company. In return, the company provides either the maturity benefit to the insured or the death benefit to the nominee, as stated in the policy’s terms. But if a policyholder decides to terminate the policy before it matures, the amount they will get is called the policy’s surrender value.
The LIC surrender value calculator is an online tool that helps to calculate the surrender value of LIC policies in India. It estimates the surrender value by entering basic policy details like the policyholder’s name, registered mobile number, plan name, policy term, number of paid premiums, premium amount, mode of payment, and total policy years.
Therefore, for LIC policies, the surrender value is calculated using this online LIC surrender value calculator. It multiplies a single premium by 75% of the remaining or total term.
In a term assurance policy with an increasing maturity date, the surrender value is calculated by multiplying the single premium by 80% of the remaining term or by the remaining term multiplied by the average of the effective sum assured at surrender and maturity. Alternatively, it can be determined using the average of the initial sum assured and the effective sum assured at maturity.
Types of LIC Surrender Value
Two types of surrender value can be calculated using the lic policy surrender value calculator.
- Guaranteed Surrender Value and
- Special Surrender Value
1. Guaranteed Surrender Value
When an insured opts for guaranteed surrender value, they are entitled to a predetermined sum known as the Guaranteed Surrender Value if the policy terminates before its maturity.
Calculation using the online LIC Surrender Value Calculator:
The Guaranteed Surrender Value is typically 30% of the total premiums paid.
However, this amount excludes insurance premiums for accident benefits, additional premiums, and term rider premiums in the first year or subsequent years
The payout proportion upon surrender can vary based on the insurance type and the surrender year. This percentage, directly linked to policy terms, is called the surrender value factor. This implies that the payout proportion tends to increase progressively as the policy approaches maturity.
Example for Guaranteed Surrender Value Calculation:
Let’s consider an illustration with Priya, who purchased LIC’s SecureLife plan with a 25-year term. Her yearly premium is INR 40,000 (inclusive of taxes). If she decides to cancel her policy after the fourth year, the Guaranteed Surrender Value can be calculated as follows:
Guaranteed Surrender Value = 30% * (INR 40,000 * 4) = INR 48,000.
If Priya is entitled to any vested bonuses, they will be determined separately.
2. Special Surrender Value
Special surrender value applies to policies where the insured has stopped paying premiums after a certain period. In this case, the policy continues, but the sum assured decreases. If the policyholder chooses to surrender the plan, they receive the special surrender value, typically higher than the guaranteed surrender value.
Calculation: Special Surrender Value is determined by {(Sum assured * Number of installments paid) + bonuses (if any)} multiplied by the surrender value factor/percentage.
Example for Special Surrender Value Calculation:
Consider Rahul, who invested a guaranteed sum of INR 12,00,000 over 20 years under LIC’s FlexiLife insurance plan. Suppose he must pay INR 60,000 yearly, which he does for five years. If he decides, in the sixth year, to cancel his policy, the Special Surrender Value can be calculated using the surrender value of the LIC policy calculator as follows:
Special Surrender Value = (INR 12,00,000 * (5/20) + INR 50,000) * 50% = INR 3,00,000.
This calculation considers the proportion or value of surrender (50%) and any applicable bonuses (INR 50,000).
Understanding these calculations with the help of lic surrender value calculator is crucial for making informed decisions about your insurance policy and exploring other investment avenues for better returns. However, consulting a financial advisor can provide better guidance.
How to Calculate Surrender Value using LIC Surrender Value Calculator?
Policyholders have the flexibility to surrender their LIC policies at any time. Policyholders can use the lic policy surrender value calculator to determine the surrender value. These online tools provide a reliable estimate of the amount one would receive upon surrendering a specific policy. By providing essential policy details, policyholders can obtain an accurate valuation.
The following information can be submitted on the online LIC surrender value calculator to assess the surrender value of an LIC policy:
- Name of the policyholder
- Contact number
- Type of policy
- Policy tenure
- Total premiums paid
- Premium payment frequency
- Remaining premium payments
- Duration of policy completed
After entering these details, the lic surrender value calculator excel will generate an approximate surrender value.
How to Surrender a LIC Policy?
Here are the offline steps to surrender an LIC Policy:
- Visit the LIC branch where you initially purchased your policy, ensuring it is the same one where you bought it.
- Request the surrender form, also known as the surrender discharge voucher. Alternatively, you can download this form from the official LIC website.
- Provide your ID proof, such as an AADHAAR or PAN Card, and include a copy of a canceled cheque bearing your name.
- Upon completion of the policy cancellation process, the surrender value of the LIC policy will be credited to the policyholder’s account within 7-10 days.
Disadvantages of Surrendering LIC Policy
While surrendering an LIC policy is generally discouraged, there are circumstances where a policyholder may find it necessary to terminate the policy and receive the surrender value.
However, there are several disadvantages to policy surrender, including:
- It nullifies the policy’s main purpose – providing financial security for the policyholder and their family.
- Surrendering a plan within three years yields no payout, resulting in zero surrender value.
- Reinvesting in the same plan after a long period may mean higher premiums based on various factors.
- Surrendering a LIC policy before maturity means sacrificing bonuses as well. The insurer refunds only a fraction of the premium.
How to Use LIC Policy Surrender Value Calculator?
To access the lic surrender value calculator app, visit the website of an insurance provider company. Follow these steps to get the surrender value of lic policy calculator:
- Input your basic details, including your name, mobile number, plan name, policy term, number of premium installments paid, premium payment mode, installment premium, and the number of years completed under the policy.
- After submitting these details, the LIC policy surrender value calculator will instantly compute the estimated surrender value, which will be displayed as the result.
- Many other leading insurance providers have adopted LIC’s model, offering similar tools like the LIC surrender value calculator. You can also easily find information about top life insurance companies and the features they provide on this platform.
Understanding the process of using the lic surrender value calculator is easy. It Is a convenient way to determine your surrender value of the LIC policy calculator. However, it’s crucial to recognize that surrendering the policy means losing the risk cover it was providing. Therefore, carefully evaluate all aspects, especially the surrender value of lic policy calculator before deciding to surrender your policy.
LIC Surrender Value Calculator Jeevan Anand
The surrender value of the LIC policy calculator and Lic surrender value calculator app for Jeevan Anand Premium and Maturity Calculation is an easy way to compute both the premium and maturity amount for the LIC New Jeevan Anand plan.
This user-friendly online tool presents information in an organized tabular format and prompts you to input a few key details. These include your desired sum assured for the LIC New Jeevan Anand Policy, your age, and the chosen policy term.
LIC New Jeevan Anand Surrender Value Calculator: Details
This dynamic LIC Surrender value calculator Jeevan Anand provides crucial information about your LIC policy or policies:
- Accumulated Bonuses: This reflects the additional sum that accumulates annually within the policy.
- Guaranteed Surrender Value: The assured amount in case you choose to terminate the policy before its maturity.
- Current Surrender Value: If you terminate the policy early (before the lock-in period concludes), this tab displays the surrender value after deducting applicable charges.
- Loan Availability: This serves as an LIC loan calculator, helping you determine the loan amount you can avail against your policy.
- Paid-up Value: Calculated by multiplying the sum assured with the ratio of premiums paid to premiums payable.
- Projected Maturity Value: Acts as a LIC maturity amount calculator, providing insights for policies like LIC Jeevan Anand, LIC New Jeevan Anand, or LIC Endowment.
The online lic surrender value calculator is an important step to making insurance management easy and intuitive. You can also access this feature through the OneInsure app. The OneInsure app is a LIC surrender value calculator app that can be used to do the same calculations.
To obtain these details using the Lic surrender value calculator app, simply follow these steps:
- Fill in your accurate details in the LIC Surrender value calculator Jeevan Anand, including Date of Birth, Gender, Date of Commencement, Last Premium Paid Date, etc., in the respective fields of the online LIC surrender value calculator.
- Click on SUBMIT, and you’ll find the details in the POLICY RESULT section.
- If you require any other assistance, you can request a callback by providing your Name and Email ID at the bottom of the POLICY RESULT section.
Thus, the online lic surrender value calculator for Jeevan Anand is a very useful tool.
Conclusion
In conclusion, understanding LIC policy surrender and utilizing tools like the LIC Surrender Value Calculator is essential for policyholders to make informed decisions about their insurance investments.
By following the provided guidelines, individuals can confidently navigate the surrender process. Remember, surrendering a policy is a significant financial decision, and carefully considering the potential benefits and results is crucial. Seek advice from LIC representatives or financial advisors to align with your long-term financial goals.
Notably, the lic policy surrender value calculator and the lic new jeevan anand surrender value calculator is a valuable resource that provides transparency and clarity for policyholders to embark on their financial journey with confidence.
LIC Surrender Value Calculator – FAQs
Will the LIC surrender value calculator app give the same surrender value for all LIC policies?
Ans: No, the surrender value of the LIC policy calculator varies based on the specific type of policy and its associated terms and conditions. Therefore, the lic policy surrender value calculator will give a different result for different policies.
How much will I receive if I surrender my LIC coverage after five years?
Ans: You can calculate this using an online lic surrender value calculator. However, to give a brief:
If you pay the premiums for more than 4 but less than 5 years, you’ll receive 90% of the total maturity amount. You’ll receive the entire sum assured if paid for over five years.
Can I surrender my LIC policy at any time?
Ans: While this is possible, the surrender value may fluctuate based on the policy’s tenure and type.
What happens if I surrender my LIC policy before maturity?
Ans: Surrendering early may lead to a lower surrender value than waiting until maturity. You can calculate the amount using the online license surrender value calculator.
Where can I go to cancel my LIC policy?
Ans: Surrender your LIC policy at the current servicing branch. Transfer it before surrendering, if needed.
Can I revive my surrendered LIC policy?
And: In some cases, reviving the surrendered LIC policy may be possible. You can do so by paying the remaining premiums and penalties. Additionally, the surrender value of lic policy calculator can help you calculate your surrender value.
