The plan has a

**Guaranteed Surrender Value**based on the number of premiums that have been paid.

**Guaranteed Surrender Value**= Guaranteed Surrender Value Factor x Total premiums paid minus any survival benefits due and payable.

The total premiums paid DO NOT include taxes, rider premiums and any increased premium on account of underwriting decisions.

We will understand this better with the help of an example, once the surrender value factors have been shown.

The Guaranteed Surrender Value Factors are as follows:

Policy Term | ||||

14 | 16 | 18 | 20 | |

1 | 20.00% | 20.00% | 20.00% | 20.00% |

2 | 30.00% | 30.00% | 30.00% | 30.00% |

3 | 30.00% | 30.00% | 30.00% | 30.00% |

4 | 50.00% | 50.00% | 50.00% | 50.00% |

5 | 50.00% | 50.00% | 50.00% | 50.00% |

6 | 50.00% | 50.00% | 50.00% | 50.00% |

7 | 50.00% | 50.00% | 50.00% | 50.00% |

8 | 55.00% | 53.75% | 53.00% | 52.50% |

9 | 60.00% | 57.50% | 56.00% | 55.00% |

10 | 65.00% | 61.25% | 59.00% | 57.50% |

11 | 70.00% | 65.00% | 62.00% | 60.00% |

12 | 75.00% | 68.75% | 65.00% | 62.50% |

13 | 80.00% | 72.50% | 68.00% | 65.00% |

14 | 80.00% | 76.25% | 71.00% | 67.50% |

15 | 80.00% | 74.00% | 70.00% | |

16 | 80.00% | 77.00% | 72.50% | |

17 | 80.00% | 75.00% | ||

18 | 80.00% | 77.50% | ||

19 | 80.00% | |||

20 | 80.00% |

The Guaranteed Additions also paid out as a factor.

**Surrender Value of Guaranteed Additions**= Surrender Value of Guaranteed Additions Factor x Total Guaranteed Additions accrued so far.

The

**Surrender Value for Guaranteed Additions Factors**are as follows:

Policy Term | ||||

14 | 16 | 18 | 20 | |

1 | 4.25% | 4.10% | 3.85% | 3.45% |

2 | 8.85% | 8.85% | 8.03% | 7.22% |

3 | 17.85% | 17.58% | 17.03% | 16.22% |

4 | 18.16% | 17.66% | 17.58% | 16.58% |

5 | 18.60% | 17.85% | 17.58% | 17.03% |

6 | 19.18% | 18.16% | 17.66% | 17.58% |

7 | 19.93% | 18.60% | 17.85% | 17.58% |

8 | 20.85% | 19.18% | 18.16% | 17.66% |

9 | 21.99% | 19.93% | 18.60% | 17.85% |

10 | 23.38% | 20.85% | 19.18% | 18.16% |

11 | 25.05% | 21.99% | 19.93% | 18.60% |

12 | 27.06% | 23.38% | 20.85% | 19.18% |

13 | 30.00% | 25.05% | 21.99% | 19.93% |

14 | 35.00% | 27.06% | 23.38% | 20.85% |

15 | 30.00% | 25.05% | 21.99% | |

16 | 35.00% | 27.06% | 23.38% | |

17 | 30.00% | 25.05% | ||

18 | 35.00% | 27.06% | ||

19 | 30.00% | |||

20 | 35.00% |

Lets us now understand how to calculate the Surrender Value in LIC Jeevan Shiroman Plan with the help of an example of Mahesh.

**Age**- 30 years

**Sum Assured**- Rs. 1 crore

**Policy Term**- 14 years

**Premium Paying Term**= 10 years

**Premium Payment Mode**- Yearly

The annual premium for Mahesh would be

**Rs. 10,75,550 + taxes**.

**Scenario 1**- Suppose Mahesh decides to surrender the policy after 6 policy years.

So after 6 years:

**Total premiums paid**= 6 x 10,75,550 = Rs. 64,53,300

**Guaranteed Additions in the 1st 5 years**= 5 x 5,00,000 = Rs. 25,00,000

**Guaranteed Additions in the 6th year**= Rs. 5,50,000

**Total Guaranteed Additions**= 25,00,000 + 5,50,000 = Rs. 30,50,000

**Survival Benefit after 6 years**= Nil

**Guaranteed Surrender Value**= Surrender Value of Premiums Paid + Surrender Value of Guaranteed Additions - Survival Benefits

**Surrender Value of Premiums Paid**= Guaranteed Surrender Value Factor x Premiums paid = 50% x 64,53,300 = Rs. 32,26,650

**Surrender Value of Guaranteed Additions**= Surrender Value Factor for Guaranteed Additions x Guaranteed Additions = 19.18% x 30,50,000 = Rs. 5,84,990

Hence the

**Guaranteed Surrender Value**= 32,26,650 + 5,84,990 =

**Rs. 38,11,640**

**Scenario 2**- Suppose Mahesh decides to surrender the policy after 6 policy years.

So after 10 years:

**Total premiums paid**= 10 x 10,75,550 = Rs. 1,07,55,500

**Guaranteed Additions in the 1st 5 years**= 5 x 5,00,000 = Rs. 25,00,000

**Guaranteed Additions in the 6th to 10th year**= 5 x 5,50,000 = Rs. 27,50,000

**Total Guaranteed Additions**= 25,00,000 + 27,50,000 = Rs. 52,50,000

**Survival Benefit received after 10 years**= 30% x 1,00,00,000 = Rs. 30,00,000

**Guaranteed Surrender Value**= Surrender Value of Premiums Paid + Surrender Value of Guaranteed Additions - Survival Benefit

**Surrender Value of Premiums Paid**= Guaranteed Surrender Value Factor x Premiums paid = 65% x 1,07,55,500 = Rs. 69,91,075

**Surrender Value of Guaranteed Additions**= Surrender Value Factor for Guaranteed Additions x Guaranteed Additions = 23.38% x 52,50,000 = Rs. 12,27,450

**Survival Benefit Paid**= Rs. 30,00,000

Hence the

**Guaranteed Surrender Value**= 69,91,075 + 12,27,450 - 30,00,000 =

**Rs. 52,18,525**

LIC may pay a

**Special Surrender Value**in this Jeevan Shiromani Plan. The special surrender value can only be known at the time of surrendering and on contacting LIC.

If you have any questions on this, do drop a comment and we will get back to you.