1. What is LIC Surrender Value?

The LIC (Life Insurance Corporation) Surrender Value is the amount payable to the policyholder if they decide to terminate the policy before its maturity date. It represents a percentage of the premiums paid, minus certain charges.

2. How Does the Calculator Work?

The calculator uses the standard LIC surrender value formula:

Where:

• \( Total\ Premiums \) — Sum of all premiums paid (in rupees)
• \( First\ Year\ Premium \) — Premium paid in the first year (in rupees)

Explanation: The formula accounts for the fact that insurance companies typically deduct higher charges in the first year of the policy.

3. Importance of Surrender Value Calculation

Details: Understanding surrender value helps policyholders make informed decisions about continuing or terminating their policies, especially during financial difficulties.

4. Using the Calculator

Tips: Enter total premiums paid and first year premium amount in rupees. Both values must be positive numbers, with total premiums greater than first year premium.

5. Frequently Asked Questions (FAQ)

Q1: Is the surrender value always 30%?
A: No, 30% is typical but may vary based on policy type and duration. Always check your policy terms.

Q2: When does a policy acquire surrender value?
A: Most policies acquire surrender value after 3 years of premium payments.

Q3: Are there taxes on surrender value?
A: Yes, surrender value may be taxable if received before completing 5 years under current Indian tax laws.

Q4: What's the difference between surrender value and paid-up value?
A: Paid-up value keeps the policy active with reduced benefits, while surrender value terminates the policy.

Q5: Can I get my full premiums back if I surrender?
A: Typically no, surrender value is usually less than total premiums paid, especially in early years.