The LIC Surrender Value Calculator is an important tool for policyholders who are considering transferring their LIC plans, whether because of financial requirements or budget adjustments. Understanding the process includes knowing how to use the LIC transfer form and calculating the transfer price with an estimator. and compliance with documentation requirements This guide makes the process easier. Emphasize the importance of pricing concessions. Impact of LIC plan transfer and financial goals to be achieved, you can do it Options with information on surrendering or transferring your LIC policy.
How to Surrender an LIC Policy?
Surrender of LIC policy involves canceling your insurance contract with the insurance company before it expires. Here are the steps to surrender your LIC policy:
Get LIC Surrender Form: Get LIC Surrender Form from the official LIC website or drop by the nearest LIC branch office. Please fill out the form completely to avoid delays.
Fill out the form: Enter details such as the policy number. Personal information and bank account details for payment Attach the required documents listed below.
Submit the Documents: Submit the LIC surrender form and supporting documents to the LIC branch where your policy is registered.
Verification and Approval: LIC officials will verify the details and documents. Once verified, the surrender request is processed.
Receive the Payout: The surrender value will be credited to your bank account after approval. The timeline may vary but is generally completed within 7-10 working days.
LIC Surrender Form
The LIC Surrender Form, officially known as Form 5074, is a mandatory document required to begin the plan surrender process. Including issues where policyholders must provide important information, such as
Policy Details: Plan number, plan type, and start date.
Personal information: Name, address and contact details of the policyholder.
Bank account details: Account number, bank name and branch details for direct payments.
Agreement and Signature: A declaration that the policyholder has agreed to take out the policy with their signature.
The form is available for download on LIC’s official website or in person at the closest branch. To prevent processing delays, double-check all the information and provide the required paperwork. Your request to surrender could be denied or delayed if there are any errors on the form.
Documents Required for Surrendering LIC Policy
To surrender your LIC policy, you need the following documents:
- LIC Surrender Form (Form 5074): Accurately filled with policy details.
- Original Policy Bond: The original document issued at the time of purchase.
- Identity Proof: A copy of Aadhaar, PAN, or any government-issued ID.
- Bank Account Proof: A canceled cheque or a copy of your bank passbook.
- Passport-Sized Photographs: As per LIC requirements.
Types of Surrender in LIC Policy
LIC offers different surrender options depending on the stage of your policy and the benefits accrued:
1. Guaranteed delivery price:
This is the minimum premium payable to the policyholder, calculated as a percentage of the total premium (including taxes and surcharges) and accrued wages For example, if your total premium is INR 1,00,000 and the fixed price is 30%, you get INR 30,000.
2. Special offering price:
The basic price to be offered is higher than the guaranteed price and is offered at the discretion of LIC. It also takes into account the policy’s accumulated bonuses, period and premium payment history.
3. Surrender value for unit-linked systems:
The scheme’s bank value at surrender, net of the cash advance, determines the ULIP’s pricing. Your payout will be INR 1,45,000, for instance, if your bank account is worth INR 1,50,000 and the cash advance is INR 5,000.
LIC Policy Surrender Value Calculator
The LIC Surrender Value Calculator is a straightforward tool for figuring out how much money you will receive if you give up your policy. This instrument measures things such as:
Total premium paid
The system password
Collective bonuses
Charges of surrender
To use a calculator:
Visit the official LIC website or a trusted financial portal that provides a LIC surrender value calculator.
Enter policy information, such as policy time, payment amount, and full-year number.
Check the estimated value.
For example, if you have a 20-year endowment plan with an annual premium of INR 50,000 and 10 years have expired, the accountant will calculate your payment based on the guaranteed principal amount
Implications of Surrendering LIC Policy
The offer of an LIC plan has financial implications that should be carefully considered:
Loss of coverage: Once surrendered, the life insurance policy is lost.
Reduced interest rates: The surrender value is usually less than the total payment, especially in the early years of the plan.
Tax Impact: If the project does not comply with Section 10(10D) of the Income Tax Act. The transferred value may be subject to tax.
Opportunity Cost: Surrendering the plan may result in loss of future compensation and benefits upon termination.
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Alternatives to Surrendering LIC Policy
Before submitting your plan, consider these options:
Policy loan: You can borrow against the surrender value of your policy without losing coverage.
Paid-up policy: Convert your policy to paid-up status by waiving premiums. The plan still operates with diminishing benefits.
Partial surrender: For ULIPs, you can opt for partial surrender instead of full surrender.
Example Scenario
Let’s consider an example to understand the surrender process better:
- Policy Type: Endowment Policy
- Term: 15 years
- Annual Premium: INR 40,000
- Years Completed: 8
Using an LIC policy surrender value calculator, the estimated values are:
- Guaranteed Surrender Value: 30% of total premiums paid = INR 96,000
- Special Surrender Value: INR 1,10,000 (including bonuses)
After reviewing the impact and consulting with a financial advisor, you can decide whether to surrender, borrow money, or continue with the policy.
Final Thoughts
Offering an LIC scheme is an important investment decision. Use tools like LIC plan surrender value calculators and get professional advice to weigh the pros and cons. To facilitate this process, make sure you have all the required documentation in the form of a policy bond and LIC surrender form (Form 5074). Decision-making that supports your financial goals can be facilitated by a clear understanding of your values. that applies to you
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