Should I surrender my LIC policies or make them paid up ?

POSTED BY Chintan Jariwala ON February 28, 2012 10:38 am COMMENTS (2)

Query to Manish

Dear Manish,

I have read your articles and they have helped a lot to get knowledge about the financial system. Nowadays, I am investing my money wisely but at a time i was dependent on some so called advisers who advised me to “invest” my money in the following LIC policies. I did so. but now i know the fact and thus i bought a Term Plan which can cover 10X of my annual salary.

Now, I need your help.
My adviser told me that If i decide to terminate this plans after 5 years of commencement by paying regular premium and surrender the policies, I will get all the money which i paid as premium. Is it true ? ( Probably not )

If i want to discontinue the policies, which is the better option Surrender the policies now or make my polices paid up ( as i dont have the need to have very only 20-25% of the premium paid ) ?

The Details of LIC policies are as following.
————————————————————————————
Policy : Jeevan Mitra (Triple Cover Endowment Plan),

Policy Term : 30,
Premium Paying Term : 30,
Commencement Date : 25/06/2008,
Installment Premium : 2005,
Mode Of Payment : QLY,
Sum Assured : 2,00,000,
———————————————————————-
Policy : Jeevan Anand,

Policy Term : 74,
Premium Paying Term : 20,
Commencement Date : 25/06/2008,
Installment Premium : 2134,
Mode Of Payment : QLY,
Sum Assured : 1,50,000,
——————————————————————
Policy : Jeevan Surabhi – 25 Years,

Policy Term : 25,
Premium Paying Term : 18,
Commencement Date : 25/06/2008,
Installment Premium : 4027,
Mode Of Payment : QLY,
Sum Assured : 2,00,000,
——————————————————-

I am eagerly waiting or your reply…

Thanx in advance

2 replies on this article “Should I surrender my LIC policies or make them paid up ?”

  1. Dear Chintan, please take some pain for yourself & visit LIC office to know your pin point surrender value as well as Paid up value for each of the 3 policies under discussion. I do hope, once these paid up & surrender values are there with you, you may decide on your own what to do with these policies?

    Thanks

    Ashal

  2. Chintan – The amount you will get in surrender is “approximately” this:

    (Total premium paid minus first year premium)* 30%

    In several cases it is best if the plan is just surrendered and the payout taken – it is just a onetime pain of losing that much money than staring all life at a plan yielding 4-5%, if at all.

    Take a payout and invest them via SIP in Equity Mutual Funds.

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