LIC Policy: There are many customers of LIC policy in India. Many a times customers buy policies without even noticing. Later they come to know that the LIC policy is of no use to them and then they want to surrender it midway.
If you want to exit the policy before maturity, then it is called surrendering the policy. The amount you get during this period is called the policy surrender value.
LIC is the largest and government insurance company in the country. LIC also provides the facility of surrendering the policy to its customers. If you surrender before maturity, its value is reduced.
Whereas no value is given in case of surrender before 3 years. This clearly means that if you want to surrender the policy then you have to pay premium for it for 3 years only after that you can surrender.
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Know Value Calculation
The calculation is made for surrendering after 3 years of premium payment. Value LIC policy surrender processing time is fixed. Surrender can be done in two ways.
The first of these is the Guaranteed Surrender Value (GSV), under this policy holders can surrender their policy only after the completion of 3 years of their policy. Which means premium has to be paid for 3 years. If you surrender after 3 years, the surrender value will be around 30 per cent of the premiums paid, excluding the premiums paid in the first year and the premiums paid for accidental benefits. Hence, the more late you surrender the policy, the higher the value will be.
special surrender value
The second method is the special surrender value. This includes (Basic Sum Assured *(Number of Premiums Paid/Number of Premiums Payable) + Total Bonus Received) * Surrender Value Factor. This is a formula by which special surrender value is achieved.
When to surrender policy
If someone terminates his LIC policy prematurely, the surrender value is paid to the policyholders. The surrender value is usually higher than the Guaranteed Surrender Value and the Special Surrender Value. Under a single premium plan, it can be surrendered in the second year of taking the policy. The policy can never be surrendered within a year of taking. If your policy term is 10 years then it can be surrendered in 2 years and if it is more than 10 years then it can be surrendered in 3 years.
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