LIC Policy Surrender procedure

 The Life Insurance Corporation of India, or LIC for short, is India's most well-known and largest insurance provider. The business has taken out many LIC insurance since its inception. However, many consumers purchase LIC without fully understanding its characteristics and benefits.

If you want to close your LIC policy before it matures, you can simply surrender it in this manner.

Frequently, customers purchase LIC without fully comprehending its many advantages and features of policy and at the end they keep blaming the agent or LIC for the same.

The policyholder has the option to cancel his life insurance policy and receive a refund of premiums paid if he does not use all of the coverage. It's possible he can't take use of the coverage since he can't afford the set premium required by the insurance provider. The policyholder must go through the surrender process and pay the surrender fees established by the insurance provider in order to get the surrender benefits. One insurance surrender charges and conditions are different between insurer to insurer. As a result, if you surrender a policy in the middle of its term, you will get a lump sum equal to the savings and earnings potential of the policy (the "surrender value"). In addition, a surrender charge, the amount of which varies from policy to policy, is subtracted from the total.

 

When a policyholder chooses to terminate his life insurance policy before to its maturity, he receives the policy's surrender value from the insurance company. If the policyholder decides to give up on the insurance before its full term is over, he or she will get the earnings and savings portion of the premiums paid. Depending on the policy, a surrender charge may be taken from this amount.

The policy's face value will be reduced if you cash it in before it matures. When the premium has been paid for the insurance for three years in a row, the policy can be relinquished. However, there is no surrender value now, unlike when this policy was implemented three years ago. Customers can obtain 30% of their original premium plus incidental benefits premium back from the firm under the Guaranteed Surrender Value provision. Later policy surrenders result in larger payouts. LIC's website has further details regarding this matter.

Types of surrender value

When calculating a surrender value, there are two sorts to consider.

1.   Special Surrender Value and the

2.   Guaranteed Surrender Value

Guaranteed Surrender Value

Three years must pass before the policyholder is entitled to the Guaranteed Surrender Value. Only 30% of the plan premium is represented by this amount. First-year premiums, rider fees, and incentive payments are not included in this total.

Special Surrender Value

Payout value is the foundational concept for grasping this. After a certain grace period, if the policyholder ceases paying premiums, the policy will remain in effect but at a reduced sum assured, known as the paid-up value. Multiplying the Basic Sum Assured by the difference between the premiums paid and those still owed yields the paid-up value. The Special Surrender Value is the product of the Paid-up Value and the Total Bonus, multiplied by the Surrender Value Factor, and is paid out upon cancellation of the policy.

 

What are the charges for surrendering the policies:-

At the moment of surrender, the charge is taken from the surrendered policy's proceeds and the remainder is given to the policyholder.

 

Policy Documents required to be submitted for surrendering the Policy:-

The insurance company will want a completed policy surrender request.

i.        Submit the original policy paperwork

ii.        A copy of your most recent bank statement and

iii.       A self-attested copy of your KYC documentation.

In some cases, the form may additionally need an explanation of why the surrender is happening. There will be a turnaround time of 7-10 business days from the time the surrender application is received.

 

Checking the Status of Your LIC Policy

Visit the LIC (Life Insurance Corporation of India) website if you want to check the policy's status. For this purpose, please visit https://www.licindia.in/. Before you can do anything on this site, you must create an account. Visit https://ebiz.licindia.in/D2CPM/#Register to sign up.

 

Your name, insurance number, and birth date will be required here. After you've registered, you may check on its progress whenever you choose by logging into your LIC account. Additionally, detailed information is available over the phone for those who prefer this kind of access. The number to reach them is 022 6827 6827. In addition, you can text LICHELP policy number> to 9222492224. This comes at zero dollars.