1. What is LIC Policy Surrender Value?

The Guaranteed Surrender Value (GSV) is the amount payable by LIC when a policyholder voluntarily terminates the policy before maturity. It's typically 30% of the premiums paid minus the first year premium.

2. How Does the Calculator Work?

The calculator uses the standard LIC surrender value formula:

Where:

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

Explanation: The formula accounts for the fact that the first year premium is typically higher due to initial charges and commissions.

3. Importance of Surrender Value Calculation

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

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: When can I surrender my LIC policy?
A: Most policies can be surrendered after paying premiums for at least 3 consecutive years.

Q2: Is the surrender value taxable?
A: Surrender value is generally tax-free if the policy has been in force for more than 2 years.

Q3: Does this calculator work for all LIC policies?
A: This provides a general estimate. Actual surrender value may vary based on policy type and duration.

Q4: Why is first year premium deducted?
A: First year premiums have higher allocation charges and agent commissions, reducing the surrender value.

Q5: Are there alternatives to surrendering?
A: Consider policy loans or paid-up options before surrendering, as these may provide better value.