Planning to surrender your LIC policy but unsure about the payout? This is where the LIC surrender value calculator becomes your trusted tool. It helps you determine how much you’ll receive if you discontinue your policy before maturity. Whether you’re considering surrendering for urgent financial needs or exploring your options, this guide and calculator will simplify the process for you.
You can use the calculator below to instantly calculate your surrender value.
LIC Surrender Value Calculator
LIC Surrender Value Calculator
Surrender Value: ₹ 0
What is an LIC Surrender Value?
The surrender value is the amount you receive if you decide to terminate your LIC policy before the maturity period ends. It consists of a portion of the premiums you’ve paid so far, along with any bonuses accumulated during the policy term.
By surrendering, you lose some long-term benefits, but you still get a payout based on the policy’s terms. Understanding the surrender value ensures you make an informed decision.
How Does the LIC Surrender Value Calculator Work?
The LIC surrender value calculator is a simple online tool designed to calculate the estimated payout if you surrender your policy. Here’s how it works:
- Enter Total Premium Paid: Add up all the premiums you’ve paid until now.
- Input the Policy Term: Specify the total duration of the policy in years.
- Enter Completed Years: Mention the number of years you’ve paid premiums.
- Include Accumulated Bonus: If your policy has accumulated bonuses, include that amount.
The calculator applies a surrender value factor (depending on completed years) and includes the bonus to give you the total surrender value.
Why Use an LIC Surrender Value Calculator?
Here’s why this tool is a must-have:
- Quick Results: No need for manual calculations or complex formulas.
- Clarity: Get an accurate estimate of your payout before surrendering.
- Financial Planning: Understand how surrendering affects your long-term goals.
Real-Life Example: Understanding the Calculation
Let’s look at an example to understand how the surrender value is calculated.
Scenario:
- Policyholder: Sunita, a 35-year-old working professional.
- Total Premium Paid: ₹2,40,000 (₹20,000 annually for 12 years).
- Policy Term: 20 years.
- Completed Years: 12 years.
- Accumulated Bonus: ₹60,000.
Step-by-Step Calculation:
- Surrender Value Factor:
The factor is calculated as: Factor = Completed Years / Policy Term = 12 / 20 = 0.6 - Guaranteed Surrender Value: Value = Total Premium Paid × Factor = ₹2,40,000 × 0.6 = ₹1,44,000
- Total Surrender Value: ₹1,44,000 + ₹60,000 (Bonus) = ₹2,04,000
Result:
Sunita will receive ₹2,04,000 as the surrender value if she terminates the policy after 12 years.
Benefits and Drawbacks of Surrendering Your LIC Policy
Surrendering an LIC policy can have both advantages and disadvantages. Here’s a quick comparison:
| Benefits | Drawbacks |
|---|---|
| Immediate access to cash | Loss of long-term financial benefits |
| Stops further premium payments | Reduced payout compared to maturity value |
| Avoids penalties for missed payments | May affect future financial goals |
Think about your financial needs and future plans before surrendering your policy.
When Should You Consider Surrendering Your Policy?
Here are some situations where surrendering might make sense:
- Urgent Financial Needs: If you need immediate funds for emergencies or debt repayment.
- Unmanageable Premiums: If continuing to pay premiums puts a strain on your budget.
- Better Investment Opportunities: If you find a higher return on investment elsewhere.
Remember, surrendering should be a last resort. Consider alternatives like policy loans or partial withdrawals before surrendering.
How to Calculate Surrender Value Without a Calculator?
If you don’t have access to a calculator, here’s the formula you can use:
Formula:
Surrender Value= (Total Premium Paid × Factor) + Bonus
Example:
Let’s say your total premium paid is ₹3,00,000, your policy term is 15 years, you’ve completed 10 years, and your accumulated bonus is ₹75,000.
- Factor = 10 / 15=0.66
- Guaranteed Surrender Value = ₹3,00,000 × 0.66 = ₹1,98,000
- Total Surrender Value = ₹1,98,000 + ₹75,000 = ₹2,73,000
While this manual method works, the LIC surrender value calculator is faster and more accurate.
Tips for Using the LIC Surrender Value Calculator
To get the most accurate results, keep these tips in mind:
- Double-check the total premiums paid to avoid underestimating.
- Include all bonuses declared by LIC for your policy.
- Make sure the completed years do not exceed the policy term.
- If you’re unsure about the bonus or policy details, consult your LIC agent or log in to your LIC account.
FAQs About LIC Surrender Value Calculator
Yes, the calculator works for most endowment and money-back policies. However, some policies may have unique surrender terms.
If the premiums paid in any year exceed 10% of the sum assured, the surrender value may be taxable. Consult a tax advisor for details.
No, surrendering an LIC policy does not impact your credit score.
Conclusion: Make Informed Decisions with an LIC Surrender Value Calculator
The LIC surrender value calculator is an essential tool for anyone considering policy termination. It simplifies the process, saves time, and ensures you’re making the best financial decision.
Use the calculator above to estimate your payout, and don’t forget to weigh the pros and cons of surrendering before taking the plunge. Whether it’s a financial emergency or a shift in your investment strategy, understanding the surrender value helps you stay in control of your finances.
If you have any questions or need help, reach out to your LIC agent or leave a comment below. Share this tool with friends and family to help them make informed financial choices too!