LIC Surrender Value Calculator

Types of Surrender Value

• Guranteed Surrender Value - Based on the policy term, a pre-defined percentage of the total premiums paid.
• Special Surrender Value - Depending on the policy tenure and bonus, the actual surrender value is usually higher than the guaranteed surrender value.

How Does the LIC Surrender Value Calculator Work?

The LIC Surrender Value Calculator helps policyholders can estimate how much they will receive if they decide to surrender their policy before it matures. The surrender value depends on multiple key factors, including the number of premiums paid, the policy term, and any accumulated bonuses.

Key Inputs Required

• Sum Assured
• Policy Term
• Number of premium Paid (years)
• Bonus (if applicable)

Formula of LIC Surrender Value Calculator?

It calculate the Guranteed Surrender Value and Special Surrender Value.

• Guranteed Surrender Value (GSV) Formula - This the minimum amount a policyholder receives on surrendering the policy.

  GSV = \( (\text{Sum Assured} ) \times \text{GSV Factor} \)

• Special Surrender Value (SSV) Formula - It is usually higher then GSV.
  SSV = \( (\text{Paid-Up Value} + \text{Bonus Accrued}) \times \text{SSV Factor} \)
  SSV =

  \( \text{Paid-Up Value} + \text{Bonus Accrued} \)

  \(\times \, \text{SSV Factor} \)

  Where :

  Paid-up Value = \( \left( \frac{\text{Number of Premiums Paid}}{\text{Policy Term}} \right) \times \text{Sum Assured} \)

  Paid-up Value =

  \( \left( \frac{\text{Number of Premiums Paid}}{\text{Policy Term}} \right) \)
  \( \times \text{Sum Assured} \)

  SSV Factor = Varies based on LIC's policy guidelines.

  Example:

  • Sum Assured = ₹ 100000
  • Policy Term = 20 years
  • Number of Premium paid = 5 years
  • Accumulated Bonus = ₹ 10000
  • SSV Factor = 0.4

  Calculate GSV:

  GSV = \( (\text{Sum Assured} ) \times \text{GSV Factor} \)\[ \begin{aligned} &= 100000 \times 0.3 \\&= 30000 \end{aligned} \]

  Calculate Paid-up value:

  Paid-up Value = \( \left( \frac{\text{Number of Premiums Paid}}{\text{Policy Term}} \right) \times \text{Sum Assured} \)

  Paid-up Value =

  \( \left( \frac{\text{Number of Premiums Paid}}{\text{Policy Term}} \right) \)
  \( \times \text{Sum Assured} \)
  \[ \begin{aligned} &= \left( \frac{5}{20} \right) \times 100000 \\&= \frac{1}{4} \times 100000 \\&= 25000 \end{aligned} \]

  Calculate SSV:

  SSV = \( (\text{Paid-Up Value} + \text{Bonus Accrued}) \times \text{SSV Factor} \)\[ \begin{aligned} &= \left( 25000 + 10000 \right) \times 0.4 \\&= 35000 \times 0.4 \\&= 14000 \end{aligned} \]
  SSV =

  \( \text{Paid-Up Value} + \text{Bonus Accrued} \)

  \( \times \text{SSV Factor} \)\[ \begin{aligned} &= \left( 25000 + 10000 \right) \times 0.4 \\&= 35000 \times 0.4 \\&= 14000 \end{aligned} \]

  Choose Maximum Value:

  Final Surrender Value = max(GSV,SSV) = max(30000, 14000) = 30000

Key Features of LIC Surrender Value Calculator?

• Comparison Feature - Allows policyholders to compare surrender value and maturity amount.
• User-Friendly Interface - easy to use and provide instant results.
• Time-saving: Surrender value is calculated quickly, saving time as compared to manual calculations.

Conclusion

The LIC Surrender Value Calculator is a useful tool for policyholders to determine how much they will receive if they surrender their policy before maturity. It uses essential parameters such as total premiums paid, policy tenure, surrender value factors (SVF) and special surrender value (SSV) to generate an accurate assessment.

This calculator help users in making informed financial decisions by understanding the financial implications of surrendering their policy.