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POSTED BY ON December 18, 2012 1:18 pm COMMENTS (6)
Hello everyone,
My dad purchased LIC Money Back Policy (Term:20 Yrs, Cover: 1Lakh, Premium:6310.00 Rs, Money back: 20K @ every 5 yrs), long ago when I was 18. This coming Feb 10th Premium is due. As I am now considering a pure term plan from two private players, I want to quit the Current LIC MB Policy.
I have two Options:
1. I don’t pay premium for current year and quit. (next 20K is due next year)
2. I pay 6310.00 this year, take 20K next Jan and then surrender.
What option should be considered as wise decision?
Also, I wanted to that, Am I eligible for any surrender amount, If I opt to quit the policy?
Thanks,
Viral
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I meant
:For you this (svfactor) should be min 50% or a little more.
The 20K (most of it depending on when you surrendar) is also part of the surrendar value.
By surrendering you will close up all ties with the policy and money eligible as on that will be paid to you this will part of the surrendar value due.
This is the formula usually used:
surrendar value = svfactor * {(No of years premium paid * sumAss /Policy Term) + [Bonus * summass/1000]}/100
svfactor is the surrendar value factor (more no of years you pay higher is this value. For this this should be min 50% or a little more.)
sumAss is sum assured.
Bonus will change from time to time unknown to use only LIC will decide you have find from office
Get a rough idea with this, go to the LIC service branch and find out the exact number and then decide.
If you pay the premium get 20K and the surrender obviously it will be that much lower!
if you have registered the policy online, maybe surrender value will be shown there but not sure about this as LIC doesnt want people to do that!
Don’t you think giving 6310 and gaining 20k next year is a good option? If I quit this year, then I will only get the surrender value (NO 20K).
Exit now is what I ,meant
In any case, I have decided to quit. But, From your answer I am not able to derive, whether I should exit the next year OR this year itself?
I was faced with a similar situation a few years back. My suggestion would be to surrender the policy and get whatever amt you are eligible for (you are eligible) and invest it elsewhere. You will be free of this and feel great,