A policyholder can surrender policy the LIC policies after at least 3 years premiums have been paid. The surrender value of policies being surrendered within the first 3 years of taking the policy is zero. Life insurance companies have different rules for different polices. LIC of India has the greatest surrender value of all insurers.
No surrender value is available if the polices are canceled before at least 3 years’ premiums are paid. LIC form no. 3510 is used to surrender a policy before maturity. Premature close of policy will always be a loss to the policy holder. Term insurance policies give out zero surrender value no matter when you surrender.
Surrender Your LIC Policy
Don’t want to continue you policy. You can request for surrender of your insurance policy before it matures. You can surrender a policy anytime. No cash payout, bonus, death benefit will be available once the policy is surrendered.
The policies that have 3 years premium paid are eligible for surrender. Though the LIC surrender value differs in different policies but in most of the policies it is thirty percent (30%) of the total premiums paid – first year premium. LIC policy surrender form can be downloaded from the link below:
Download Surrender Form 5074 PDF
LIC Form 3510
The surrender value is calculated after deducting other charges like additional riders payment, taxes and any bonus, etc. It is advisable that you should think about the surrender of a LIC policy after 5 years.
The surrender value increase with passage of time and premiums being paid. So a policy that has a term of 15 years and you want to surrender it after 10 years get you a surrender value almost 90% of the premiums paid. Surrender LIC policy online.
What does policy surrender mean?
If you want to discontinue an policy before the policy term ends, you can request for surrender policy. Surrender of policy would mean that all policy benefits, bonus etc. would cease to exist. You you will have no claim whatsoever from LIC.
How to cancel LIC policy within 15 days
Once you have received the policy and want to cancel it. You can easily do so my just sending a request. There is no reason required, no questions asked, your policy will be cancelled. And all your money would be returned in 7 working days.
You can send a request for cancellation of policy within 15 days of receiving it by contacting your
- LIC agent
- visiting any LIC branch or
- by calling the call center number of LIC 022 68276827.
Policy surrender letter example
The application to surrender the policy can be written on simple white paper. You can use the format below in pdf to send the application for surrender.
Download surrender letter: Surrender letter
Paid up status. Is it better than surrendering policy?
A policy that has at least 3 years premiums paid up and due to some situations the premiums could not be paid after that the policy is automatically converted into a paid up policy for a reduced sum assured. The policy become payable on the date of maturity or in event of the policyholder’s death, if earlier.
However, a paid-up policy loses all the additional benefits attached to the policy like Double Accident Cover, Critical Illness Cover, etc.
What is surrender value
Surrender value is the amount that LIC will be paying to he policy holder if he decides to discontinue the policy. Policy holders can close a LIC policy before its maturity and get back the money they have deposited till date. Let’s see an example if Ajay buy a policy with a premium of 25,000 per year for a term of 35 years. At the end of 5th year Ajay needs some emergency fund he can surrender his policy and get a refund from LIC. The refund that Ajay would receive is called the Surrender Value of the policy. It keeps increasing with each premium that is paid.
A policy can be withdrawn before maturity on certain conditions.
The surrender value for any policy is very less in first 3 years. It is always recommended to continue a policy for at least 3 years before thinking about surrendering.
How is surrender value calculated in LIC
Surrender value is calculated on various factors by LIC. Every policy has a different formulae for surrender value calculation. Generally speaking the surrender value will not be more than what you have deposited in the initial years.
Policy table number, term, premiums paid are the factors that are taken into consideration while calculating the surrender value of a policy.
Formulae to calculate surrender value
fixed percentage of the sum of all premiums paid + bonus = surrender value
Form 5074 required for the surrender of LIC policy
There a set format for the Application letter for surrender of LIC policy (Surrender form 5074). A form needs to be filled in and submitted at your servicing branch to surrender the policy. The form must have
- Two signatures of the policy holder
- One revenue stamp affixed
- Bank details of the policy holder
- 1 witness details
Can I submit the Form 5074 in English?
Yes, you can download the form in English from the link.
How to fill Form 5074?
The form has all the contact information, your policy information ad bank details.
LIC policy surrender status can be inquired online at LIC call center numbers or by visiting the nearest LIC branch.
Surrender LIC Policy Online
Fill the form below to request for surrender of your LIC policy.
Know your Surrender Value
Send us your policy number to get the surrender value of your policy. The surrender value is calculated by the LIC branch office.
Surrender Form Filled Example
Here is a sample form for surrendered filled in. Refer this form is you want to know how to fill out the surrender form. Make sure all information provided is correct and put in legible hand writing. Use a black / blue ink pen only. Use capital letter to fill in the information.