Jeevan Saral Surrender or Do not Surrender ? Please Advice

POSTED BY xtremeinfo ON March 6, 2014 8:52 am COMMENTS (9)


Its been 2 years since i got a job and like most of others I have taken a LIC jeevan Saral Policy just to save tax . I havent analyzed much in my first year and like a  dumb fellow took jeevan saral policy for premium of 48000/- for 21 years :(..

Now Since I have to pay my 2nd year premium ,I have analyzed a bit on this policy ,but sadly came to know that the returns are very less or the policy is not good. The only good thing that i have done is to divide 48000 into 4 bonds of 12000 each

So friends I need 2 suggestions :

1. My Lic advisor told me we can withdraw after 10 years ,I am not expecting much returns but If i withdraw after 16 years will I get an interest rate of 8.5% or atleast 8% ?

(In banks,for 8% I get around 15.5 lakhs) please tell me how much interest % I will get

2. If i dont even get 8%,I am planning to surrender one or two policies now only and try PPF or something,is this a good option to surrender after one years..

Please suggest me

9 replies on this article “Jeevan Saral Surrender or Do not Surrender ? Please Advice”

  1. akgc2 says:

    If you do RD of Rs 48K for next 10 Years it will grow to 7.72 Lacs @8.5% interest rate compounded annually.

    Continuing LIC for another 10 years your total deposit would be 48 * 11 = 5.28 Lacs. Try to get how much loyalty addition would be there after 10 years.

    If this LA is more than 2.44 Lacs your total returns would be 7.72 lacs plus. Hence you should continue or else stop it Today and do RD as mentioned above.


  2. xtremeinfo says:

    One Last thought with surrendering policy

    After 10 years,I get loyality bonus .So If i withdraw after 10 years
    Assuming the least i get from LIC is 7%.I get 7 lakhs
    With PPF ,I get 8.5% ,so for 10 years(I know its for 15 years but for calulation) I get 7.5 lakhs.
    If I surrender my policy and take PPF now ,
    From Lic – I get -48000 minus ,PPF – 7.5 lakhs plus (@8.5%) which is 7 lakhs in total
    ( 7.5 lakhs PPF – 48000 LIC = 7 Lakhs sum)
    If i dont surrender , then also with 7% rate I get 7 lakhs from LIC,
    and i can get even more if the interest rate is more

    Any thoughts on that ?? 😀
    Note : Please dont think I am still dumb,just another thought ? what do u say friends?

    1. ashalanshu says:

      Dear Xtreme, no you are not dumb. You are very smart. Please continue this great money making policy for LIC. Yes you ‘ll get a super duper return after 10Y. What is the definition of that super duper return,should be checked with your LIC agent. Happy?



  3. akgc2 says:

    Read more about one more such case.

    I hope after reading this you wont dare to continue your policy.

    Few points:

    1. If you have paid just one annual premium stop is immediately. No other thought.
    2. If you have paid 2 annual premiums and waiting for 3rd one just check with the advisor how much you will get at the end of 3rd year. If it is more than “3rd year premium + interest on that 3 premium” then you can wait otherwise surrender it.

    If you are not getting any money on surrendering you don’t need to do anything. Just stop making the payment.


  4. ashalanshu says:

    Dear Xtreme, w’d you like to amputate a finger today or an Arm tomorrow? The choice rests with you. Please check with your advisor, what ‘ll be the surrender amount after 3rd prem. pay out?



  5. ashalanshu says:

    Dear Xtreme, Milind and Viren, First of all a good news. Not any of you is a Dumb. Had you been dumb, you people were not getting jobs and earning income. Most importantly, you people relaised your mistakes and already took corrective actions (applied for dear Milind and Viren) so that’s one more proof that you are not dumb.

    Band news in case of Xtreme – you are still not able to digest the possible loss from this policy and wants to confirm that can this policy (actually policies) provide you better return if you opt to continue for 15 or more years? Sorry. that;s not possible. Why?

    Just answer a few questions on your own and you ‘ll get the answer for your basic query. You are paying 12000 Rs. per policy or 48000 Rs. in total. Please deduct the agent’s commission from it. Now deduct the mortality charges to be paid for your basic insurance. Remaining money is invested now. So in actual not 48000 but some where 40-43000 Rs. only is invested. Now can you tell me when the most secured thing PF and PPF are not able to earn more than 8.5-8.6% return which is directly given to you by Govt. of India, how much return you should earn to get 8% on your 48000 Rs?

    Picture abhi baki hai mere dost. LIC is not running a charity organization. So from the generated return, it ‘ll deduct it’s own charges towards, admin, fund management etc. So the 40-43000 Rs. should earn even more to give you at least 8% net off all these charges.

    Now do tell me, should you invest in this policy or not?



    1. xtremeinfo says:

      Hi Ashalanshu,

      Thank you and all for the replies.
      Now since the best thing to do is surrender,I just asked my LIC advisor how much I will get if i surrender,and he says nill 🙁
      as per policy we have to pay minimum 3 years it seems,
      So friends what shall i do? even if i surrender i dont get anything

  6. Viren Phansalkar says:

    Xtremeinfo and Milind,

    Me too in that dumbness people’s list….
    Paid 3 premiums of Jeevan tarang and 4 premiums of jeevan anand……
    finally, surrendered everything ..
    have cleaned my folio… and now building it from start…..

    Viren Phansalkar

  7. MILIND SARAF says:

    dear xtreminfo
    yes to be frank you are dumb that you have choose jeevan saral, but dont worry i am also your dumb brother and made same mistake. But you are lucky that you have paid only one premium of rs 48000/- in may case my prem is 24020 pa and i have paid 5 premiums.

    so first surrender jeevan saral and start investing in PPF . As ashalbhai says w’d you like to ampute finger today or whole arm tommorow?

    This is my openion, any way wait for ashalbhai’s reply, after all he is expert


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