Understanding the Surrender Value of Your LIC Policy
Licensed Insurance Company (LIC) policies are long-term investment vehicles that offer various benefits, such as life insurance cover and bonuses. However, if you are considering surrendering your policy, it's crucial to understand the implications and the amount you can expect to receive. In this article, we will discuss the factors affecting the surrender value, how to calculate it, and when it might be advisable to continue with your policy.
Understading the Policy Bond
The policy bond is a term that refers to the actual terms and conditions of your insurance policy. It specifies the benefits, premiums, and other features of your policy. If you decide to terminate your policy before the end of its term, you may receive a certain amount based on the policy bond, which can be calculated using a chart provided by LIC.
Best Ways to Obtain Surrender Value
The most straightforward way to obtain the exact surrender value of your policy is to contact the LIC helpline or visit your nearest LIC branch. They will provide you with a detailed surrender quotation based on your policy details, which include the policy number, plan type, term, and amount paid during the policy period.
Benefits of Continuing Your Policy
Life insurance policies are contracts, and by continuing your policy, you ensure that you get full benefits, such as life cover, bonuses, and interest on paid premiums. Discontinuing the policy before the final term can lead to penalties and the loss of these benefits, which can be financially harmful to your dependents.
Typical Surrender Penalties and Values
In general, surrendering a traditional and long-term LIC policy is not a good idea. These policies often have high surrender penalties, which can significantly reduce the amount you might receive. The surrender value is usually calculated based on a percentage of the total premiums paid during the policy period.
Calculating Surrender Value
If you need to calculate the surrender value based on your policy details, you can follow these general steps:
Verify your policy number, plan type (e.g.,EndPoint, Regular), and the term of the policy. Contact your nearest LIC branch or call the helpline for a detailed quotation. Alternatively, you can check with the policy service department at your branch, as they can provide a breakdown of the paid-up premium, unpaid premiums, and service charges. Calculate the surrender value using the information provided, which is typically 90% of the paid-up premium less any unpaid premium and service charges.Conclusion
While the amount you will receive from surrendering your LIC policy may vary, it's generally advisable to continue with your policy. This ensures full coverage for life insurance and bonuses. For accurate information, contact your nearest LIC office or use their official helpline to get a detailed surrender quotation based on your policy details.