LIC Surrender Value Kaise Calculate Karein
If you need money urgently and want to close your LIC policy before maturity, you will receive a surrender value. This guide explains exactly how it is calculated in simple terms.
What is LIC Surrender Value?
Surrender value is the amount LIC pays you when you close (surrender) your policy before the maturity date. It is always less than the full maturity amount because you are exiting early.
When Can You Surrender?
Types of Surrender Value
1. Guaranteed Surrender Value (GSV)
This is the minimum amount LIC guarantees to pay when you surrender.
GSV Factor increases with each policy year (given in the policy bond).
2. Special Surrender Value (SSV)
This is usually higher than GSV. LIC pays the higher of the two.
Simple Example
- Policy: Jeevan Labh (936)
- Sum Assured: ₹10,00,000
- Policy Term: 21 years, Premium Term: 15 years
- Yearly Premium: ₹56,000
- Surrendering after: 5 years
- Total Premiums Paid: ₹2,80,000
- GSV Factor (approx): 30%
- GSV = ₹2,80,000 × 30% = ₹84,000 (approx)
This is just an approximation. LIC gives you the higher of GSV or SSV.
Why is Surrender Value Less Than Total Premium?
Because LIC deducts:
- Cost of life insurance (risk charges)
- Administration charges
- Surrender penalties
Surrender Value by Policy Year
| Policy Year | Approx GSV Factor |
|---|---|
| 3rd year | 30% |
| 5th year | 35% – 40% |
| 7th year | 50% – 55% |
| 10th year | 60% – 65% |
| 15th year | 75% – 80% |
Factors vary by plan. Check your policy bond for exact factors.
Should You Surrender Your Policy?
Consider Surrendering If:
- You have an urgent financial emergency
- The policy is not fulfilling your financial goals
- You have a better investment option available
Do Not Surrender If:
- You have only 3–5 years left for maturity
- You paid premium for less than 7 years (value is very low)
- You can take a policy loan instead (better option)
Alternative to Surrender: Policy Loan
How to Surrender LIC Policy
- Visit your nearest LIC branch
- Carry: Original policy bond, ID proof, bank passbook
- Fill the Surrender Form (Form 5074)
- LIC processes it within 7–10 working days
- Amount credited to your bank account
Disclaimer: Surrender values are calculated by LIC as per their rules. Use our calculator for estimation only.
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