Do you intend to cancel your LIC policy before it matures? Knowing how much you will get in return is crucial. A useful tool for estimating the amount you could receive if you surrender your policy early is the LIC Policy Surrender Value Calculator. The calculator’s operation and the variables influencing your surrender value are covered in detail in this guide.
LIC Policy Surrender Value Calculator
Estimate the potential surrender value of your LIC policy. Note that this is a basic estimation only.
- The actual surrender value can vary depending on your specific policy’s terms — especially if it’s a Limited PPT policy.
- This estimate does not include any accrued bonuses. These bonuses, if applicable, can significantly increase the Special Surrender Value (SSV).
- Most policies become eligible for surrender value only after 2 or 3 full years of premium payments — except for Single Premium policies, which may acquire value earlier.
👉 For the most accurate information, always refer to your policy document or get in touch with LIC. Also, keep in mind that term insurance plans usually do not offer any surrender value.
Financial needs also change as life does. In India, a lot of policyholders think about cancelling their LIC policy before it matures because of pressing financial obligations or changing investment objectives. However, how much will you really receive back? The LIC Surrender Value Calculator 2025 can be useful in this situation.
To help you make wise financial decisions, this tool provides you with a precise estimate of your surrender value based on your policy type, duration, bonuses, and premiums paid.
What is LIC Surrender Value?
The money you get when you willingly cancel your LIC policy before its maturity date is known as the surrender value. You receive eligible bonuses in addition to a portion of your premiums paid back at the end of the term.
- Guaranteed Surrender Value (GSV): Minimum assured payout, usually a percentage of total premiums (excluding first-year premium).
- Special Surrender Value (SSV): Higher payout based on sum assured, bonuses, and surrender factor. LIC always pays whichever is higher—GSV or SSV.
How LIC Surrender Value is Calculated
The surrender value depends on:
- Total premiums paid (excluding first year)
- Policy duration and term
- Accrued bonuses (if applicable)
- Surrender factor
Formula:
Surrender Value = (Total Premiums Paid – First Year Premium) × Surrender Value Factor + Bonus Surrender Value
Example – Real Calculation
Let’s take a real-world scenario:
| Policy Details | Value |
|---|---|
| Policy Term | 20 years |
| Annual Premium | ₹30,000 |
| Premiums Paid | 5 years |
| Accrued Bonus | ₹50,000 |
| GSV Factor | 50% |
| Bonus Factor | 15% |
GSV = ₹30,000 × 5 × 50% = ₹75,000
Bonus Value = ₹50,000 × 15% = ₹7,500
Estimated Surrender Value = ₹82,500
This means if you surrender after 5 years, you can expect approx. ₹82,500.
Year-Wise Growth of Surrender Value
- After 3 years → 30–35% of premiums paid
- After 5 years → 50–65% of premiums paid
- After 10 years → 80–90% + bonuses
According to analysis, giving up after ten years yields noticeably higher returns because of accrued bonuses.
How to Use the LIC Surrender Value Calculator
- Enter Policy Details: Select your plan (e.g., Jeevan Anand, Jeevan Labh, Komal Jeevan).
- Fill Premium Information: Enter annual premium and number of years paid.
- Get Instant Estimate: Click Calculate to view the approximate payout.
This works for multiple timelines like LIC surrender value after 3 years, 5 years, or 10 years.
Required Documents for Policy Surrender
To surrender an LIC policy, you’ll need:
- Original policy bond
- Surrender request form (Form 5074)
- Valid ID proof (Aadhaar, PAN, Passport)
- Canceled cheque / bank account details
Taxation Rules on Surrender Value
- If surrendered before 5 years, payout may be taxable under Section 80C withdrawal rules.
- After 5 years, tax benefits are generally more favorable.
- LIC may deduct charges like stamp duty, rebates, or penalties.
Expert Opinion: “Ideally, policyholders should only surrender if they have better investment avenues,” says financial advisor Rajeev Sharma (CFP, Delhi). If not, continuing contributes to the accumulation of long-term advantages and loyalty bonuses.
Benefits of Using the Calculator
- Quick online estimate—no branch visit required
- Helps compare surrender vs. maturity value
- Prevents manual errors in calculation
- Supports multiple LIC policies (Jeevan Anand, Jeevan Umang, Jeevan Labh, etc.)
FAQs
No. Most policies acquire surrender value only after paying 3 full years of premiums.
Experts suggest taking a loan is often better since surrendering early reduces returns drastically.
Typically 50–65% of premiums paid + bonuses, depending on your plan.
Yes, if surrendered before 5 years. Always consult your tax advisor.
Yes. The LIC Surrender Value Calculator provides quick, free estimates.
Final Word
The LIC Surrender Value Calculator 2025 is the best tool for calculating payouts before you surrender. Whether you’re considering cancelling your policy after three, five, or ten years, this calculator helps you make informed financial decisions, saves time, and avoids calculation errors.
Before proceeding, use the calculator to determine the actual value of your policy.