Should I Continue or Surrender my LIC Policies ?

POSTED BY Sudhanshu967 ON December 24, 2013 4:04 pm COMMENTS (8)

I have two LIC  Policies with following details.

Policy One:

  • Policy Name: New Bima Gold
  • Start Date: 28/9/2007
  • Policy Term: 20 Years
  • Premium: Rs. 8,844
  • Frequency: Half Yearly
  • Sum Assured: Rs. 5,00,000

Policy Two:

  • Policy Name: Jeevan Saral
  • Start Date: 16/11/2011
  • Policy Term: 21 Years
  • Premium: Rs. 6,125
  • Frequency: Quaterly
  • Sum Assured: Rs. 5,00,000

I am Planning to take a term plan, So, Should I continue the LIC policy or surrender. Please suggest…

8 replies on this article “Should I Continue or Surrender my LIC Policies ?”

  1. ashalanshu says:

    Dear Sudhanshu, if Insurance is the prime motive and you are paurchsing the Term Cover for the same, where is the need of these combo policies? You are answering yourself for your basic query. Please surrender both these combo policies.



    1. Sudhanshu967 says:

      Dear ashalanshu
      These policies were purchased when i was not aware with the option of term plan. Now when i am aware now, so i am planning to surrender both the policies. But before that I wanted to have some opinion from jagoinvestor users.

      thanks ashal for your reply.


  2. swapnil.kendhe100 says:

    Dear Sudhanshu,

    If you stop paying premium for any policy for which you have paid minimum 3 years premium then policy acquires paid up value.
    I case of claim nominee will receive paid up value.

    Paid up value=(no. of years prm. paid/policy term*Sum assured)+ Accumulated Bonus.

    Survival benefit already paid is not deducted while calculation of paid up value.
    At maturity you will receive Paid up value-survival benefit already paid.

    I would recommend you to stop paying premium of both policies.
    Bima Gold will acquire paid up value.
    Jeevan Saral will lapse and you wont receive any money back.

    If you are a disciplined investor exiting both these policies is a better option.
    If not then continue Jeevan Saral because this is a forced saving and you will save money for long term which you wont if you are not disciplined.


    1. Sudhanshu967 says:

      Thanks Swapnil!!!

  3. Sudhanshu967 says:

    @ Ashalanshu
    Because I think, I am under insured, And I feel term cover gives higher insurance at lower value.

    @ Sumit
    Exactly I don’t remember but how does it matter now, obviously they would have told the amount which I am not going to get anyway. ( loyalty addition is uncertain)

    @ Bcd
    Thanks a lot for the detailed analysis, Can you please throw some light on ” Paid up”.
    Am little confused, 1st you said make paid up one and keep other, but finnaly you said keep both policies.
    See My real query is, I can keep both policy and can pay premium, but I want to know, Is it worth keep from both Insurance & Investment combined point of view. Will appreciate any further suggestion.

  4. ashalanshu says:

    Dear Sudhanshu, why are you purchasing the Term cover?



  5. bcd says:

    Bima Gold – The surrender value is 30%(premiums -1st year premium – any extra premiums or any survival ben paid out). So if you surrender now you get a pittance.

    Jeevan Saral – The SV is higher of GSV, Special GSV which isnt great either if you see the benefit illustration.

    I see you are spending around 35K for the policies every year. For the Bima Gold your benefit is quite small. You receive 10% of SA every 4, 8, 12, 16 years so you total payouts would be around 200,000. considering you pay around 340000 something for 20 years…so around 50% of payments to get 700000.

    My suggestion would be to make one of hte policies as paid up. (1st one) and keep the 2nd one since it has a big Death benefit.

    Buy a proper term with a ADBR coverage from any of the insurers … take a quote from all of them.

    Alternatively, since a term would not cost you most than 10k annual, if you can pay 35k then keep all the policies alive…

  6. Sumit says:


    Do you know the estimated return after maturity (20, 21 years) of your policies? what figures your LIC agent told ?

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