How to surrender LIC policy: Many people take LIC policy. If a policy has to be surrendered in the middle, then there are some rules for that. It is very important for you to know these rules.
New Delhi. If you have also bought LIC policy or you want to surrender your policy, then this news is of your use. Actually, many people buy insurance without knowing the benefits and features of Life Insurance Corporation of India ie LIC. But much later it comes to know that LIC policy is of no use to them and then they want to end LIC in the middle. The only solution is to surrender such LIC policy. So let’s know the rules related to this …
Know what is the rule?
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 gets reduced. No value is given in case of surrender before 3 years. For this premium has to be paid for 3 years. Only after that you can surrender. You can surrender the LIC policy in these two ways.
1. Guaranteed Surrender Value
Under this, the policyholder can surrender his policy only after the completion of 3 years, 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.
2. Special Surrender Value
A formula is used to achieve the special surrender value. The formula is (Basic Sum Assured *(Number of Premiums Paid / Number of Premiums Payable) + Total Bonus Received) * Surrender Value Factor.
Know what is surrender value?
In case of life insurance, you get back a part of the premium paid by surrendering the policy before it runs for the full term. In this the charges are deducted. This amount is called surrender value.
What happens on surrender of LIC policy?
Once the LIC policy is surrendered, your life insurance cover ends. Because there is already an agreement between you and the insurance company about surrendering the LIC policy. You stop getting tax benefits under section 80C of the IT Act.
