How to calculate Surrender Value of LIC Policy? Is there any other way to know the Surrender Value of LIC Policy? We are seeing a lot of comments about the low Surrender Value of LIC Policy in the initial years. Surrender Value of LIC Policy is very important, because you will get loans from the policy based on the surrender value of the policy.
Surrender Value is the amount, a policy holder will get if he wants to terminate his policy before the maturity date of the policy. Insurance companies use a formula to calculate the amount payable like this.
Surrender Value of LIC Policy is calculated from Paid-up value of the policy.
What is Paid-up value? How to calculate Paid-up value?
If you have paid 5 yearly premiums in a 20-year Endowment Policy of Rs. 1 Lakh sum assured, the formula for calculating the Paid-up value is as follows:
Paid-up value = Number of years premium paid x Sum Insured/Number of years premium payable
In the above example, Paid-up value = 5 x 1,00,000/20 = 25,000
Surrender Value of LIC Policy – Traditional Plans
LIC uses a Surrender Value chart to arrive at the surrender value from the paid-up value. It is nothing but the discounted value of the paid-up value. In the above example, LIC is liable to pay you Rs. 25,000 only at the maturity date of the policy, which is after another 15 years. So, if you require the amount now, LIC will discount the value and pay you the surrender value, which will be a fraction of the paid-up value. In the initial years, it will be even less than the premiums paid by you.
LIC uses different tables for different products to calculate the Surrender Value of LIC Policy. It is better to call their IVR or city specific numbers to know the “Surrender Value of LIC Policy“.
Surrender Value of LIC Policy – ULIPS
Surrender Value of ULIPs is calculated on the basis of fund value of the policy minus surrender charges.
Is surrender recommended?
Surrender value will not be attractive in most of the cases and you may stand to lose, if you surrender your policy. So surrender should be the last option.
Surrender Value of LIC Policy – Call Helpline
If you are still confused on how to get LIC Policy Surrender Value, don’t worry. IVRS or Integrated Voice Response System is available at all time (24×7) from most cities and is providing required information to customers. Any customer can contact LIC IVRS by dialling Universal Access Number (UAN) 1251.
For making local call from any MTNL or BSNL number, simply dial 1251 and for other than local users, IVRS can be accessed by dialling the STD code of the IVRS Centre followed by 1251. You can get all the information regarding your policy including the Surrender Value of LIC Policy by this method.
Or you may visit any of the LIC offices in your area with your Policy number to get the Surrender Value of LIC policy.