lic policy surrender now or wait?

POSTED BY alpesh pancholi ON March 5, 2012 1:35 pm COMMENTS (4)

hi all,
i asked a question regarding lic endowment policies surrender and got good responses from you with calculators. so i decided to surrender my and spouse’s policies. for that i contacted my agent, he advised me to continue policies for 2-3 yrs more. i have paid 4 premiums till date and getting only 35% as surrender value. if i continue 2-3 yrs more then i will get 70% of what i paid.
little bit confused..
please reply with calculations

4 replies on this article “lic policy surrender now or wait?”

  1. Which policy is this ? It might be true only incase of JEEVAN SARAL , but in others , just paying 2-3 more premiums does not guarantee 70% of Premiums

    1. alpesh pancholi says:

      @ manish
      i have endowment policies and jeevan saral also..
      in jeevan saral there is no surrender value..u have to pay for 10 years and after that u can withdraw ur money with bonuses irrespective of ur policy term. i personally inquired at lic branch.

      1. Dear Alpesh, please contact LIC office for exact surrender values at present & after 3-4 years.

        In any case, your first year prem. ‘ll not be considered for surrender value, so in effect, you w’d have paid 8 prem. but the calculation ‘ll be made for 7 prem. & accordingly you ‘ll get 50 or 60 or 70% of those 7 prem. It’s up to you to decide but first contact LIC for the exact surrender values.



  2. I doubt if that statement is true. IF the statement is TRUE then it definitely makes sense to pay the next 3 premiums but how does the agent say you will get 70% back. Is there a calculator? Is he assuming future hefty bonuses. I really doubt the agent’s statement. Ask the agent to show how they arrived at that number.

    Rs. 100 premium paid for 4 years; 35% gotten in start of year 5 = 140. Present Value is 140.
    If you contribute for 3 more years and get Rs.490 at start of year 8 then for this cash flow to have a Net present value of 140 the discount rate is 52%. Which means that if you get 140 today and invest it in some avenue for 52% for 3 years you will get 490 in 3 years time. We know this is impossible, Thus taking the payout after 3 years makes sense.

    But the above is pure numbers alone. You need to ascertain how you will be able to get that much money back just by staying for 3 more years (until the policy is maturing by then!!)

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Download Our FREE Ebook!

Available only for first 100 people today

Download Our FREE Ebook!

Available only for first 100 people today