How To Surrender LIC Policy?

Life Corporation of India (LIC), one of India's prominent insurers, strives to provide affordable plans to each insurable person in the country. However, each policy has its specific tenure, so a prospective insurable person can pick the one that best fits their budget and needs.

However, the question arises when it comes to the surrender policy before the end of the policy term. Does LIC allow policyholders to give up the policy, or how can I surrender my LIC policy?

Yes, LIC allows the policyholder to surrender the plan taken for the specific policy term. However, the surrender of a policy isn't considered an ideal option because the surrender value that one receives is always proportionately low.

What Is Surrender Of LIC Policy?

Let's understand the "surrendering of LIC policy"; policyholders often buy policies without understanding the terms & conditions properly. It may lead to giving up the policy before maturity. However, the amount policyholders receive after opting out of the policy is the LIC policy surrender value.

There are several reasons why people surrender their policy, primarily because they get a better plan or a financial crisis. Please note that the policyholder can only give up the policy after paying the premiums diligently for three years.

When are Policyholders Allowed to Surrender their LIC Policy?

While surrendering the LIC policy, there are specific guidelines that may be applicable to this concept. However, policyholders are not allowed to give up their policy at any point at their convenience. Generally, policyholders can discontinue their policy after at least three years of the policy issue date. It may vary depending on the type of LIC insurance plan and the premium payment term. Let's take a quick look at when can policyholders surrender their LIC policy:

Single-Premium Plans

Under a single-premium plan, policyholders pay the entire policy premium once at the time of purchasing the policy. In that case, policyholders can surrender their LIC policy at least two years after the policy issue date.

Limited/Regular Premium Plans

Under the limited and regular premium plans, the terms & conditions may vary depending on the policy tenure. If suppose the policy term is:

• Ten years or less, the policyholder can surrender the policy after two years.
• More than ten years, the minimum duration to surrender the LIC policy is three years.

What is the Procedure of Surrendering a LIC Policy?

However, the insurer has no specific key guidelines to surrender the policy. But suppose the policyholder wishes to discontinue their policy or ULIPs before its chosen policy term. In that case, they can easily do it via the insurers' official website or by visiting LIC's nearest office branch.

Step 1 Policyholders must visit the LIC's nearest office branch or browse the LIC's official webpage on their device and sign up.

Step 2 They can easily get the printout of the "Surrender Discharge Voucher" or LIC Form No. 5074 by downloading it directly via the website or visiting the LIC office.

Step 3 Policyholders must fill out the necessary details on LIC Form No. 5074 to withdraw the surrender value from your bank.

Step 4 Once policyholders fill out the form, attach the document and the surrender form and submit it to the LIC representative.

Step 5 Once the surrender form is submitted to the representative, the process of surrendering the policy starts.

Step 6 It may take up to 10 to 15 working days to complete the surrender request.

Step 7 After that, the surrender value gets credited into the registered bank account of the policyholder.

Documents Required for Surrendering LIC Policy

Undoubtedly, it is not considerable to surrender the policy. Even if you still want to opt for it, you may have to provide some documents. Here are the following documents that the policyholder is required to bring at the time of Surrender of the policy:

• Original documents of LIC policy.
• Printout of the filled LIC surrender form (embedded on LIC's official website).
• A canceled cheque from the policyholder's registered bank.
• Government-issued ID proof such as a PAN Card, driver's License, Aadhaar Card, voter ID card, or Passports)
• Details of bank account.
• LIC NEFT mandate form.
• Written application to LIC stating reason for Surrender.