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Surrender Value in LIC Jeevan Labh Plan - Check your surrender value
Surrender Value in LIC Jeevan Labh Plan - Check your surrender value
Feb 26, 2018 | 3401 VIEWS
There maybe a number of reasons due to which you may have to surrender your LIC Jeevan Labh Plan - Table No. 836. Traditional plans are not designed to offer much flexibility when it comes to exiting anytime before the end of the policy term. You will only get back a part of the premiums which you have paid. You can use the surrender value factors mentioned below to know the amount you will get in case you surrender the plan. The value will depend on the years for which you have made the premium payments.

Surrender Value Factors applicable to the premiums paid
 
    Policy Term
    16 years 21 years 25 years
No. of years of premiums payment 1 0.00% 0.00% 0.00%
2 0.00% 0.00% 0.00%
3 30.00% 30.00% 30.00%
4 50.00% 50.00% 50.00%
5 50.00% 50.00% 50.00%
6 50.00% 50.00% 50.00%
7 50.00% 50.00% 50.00%
8 53.75% 52.30% 51.80%
9 57.50% 54.60% 53.50%
10 61.25% 56.90% 55.30%
11 65.00% 59.20% 57.10%
12 68.75% 61.50% 58.80%
13 72.50% 63.80% 60.60%
14 76.25% 66.20% 62.40%
15 80.00% 68.50% 64.10%
16 80.00% 70.80% 65.90%
17 73.10% 67.60%  
18 75.40% 69.40%  
19 77.70% 71.20%  
20 80.00% 72.90%  
21 80.00% 74.70%  
22 76.50%    
23 78.20%    
24 80.00%    
25 80.00%    

The Bonus which accrued in the plan also gets a Surrender Value.

Surrender Value Factors for Bonus in the LIC Jeevan Labh Plan
 
    Policy Term
    16 years 21 years 25 years
No. of years of premiums payment 1 0.00% 0.00% 0.00%
2 0.00% 0.00% 0.00%
3 17.58% 15.93% 15.28%
4 17.66% 16.22% 15.42%
5 17.85% 16.58% 15.55%
6 18.16% 17.03% 15.72%
7 18.60% 17.58% 15.93%
8 19.18% 17.58% 16.22%
9 19.93% 17.66% 16.58%
10 20.85% 17.85% 17.03%
11 21.99% 18.16% 17.58%
12 23.38% 18.60% 17.58%
13 25.05% 19.18% 17.66%
14 27.06% 19.93% 17.85%
15 30.00% 20.85% 18.16%
16 35.00% 21.99% 18.60%
17 23.38% 19.18%  
18 25.05% 19.18%  
19 27.06% 20.85%  
20 30.00% 21.99%  
21 35.00% 23.38%  
22 25.05%    
23 27.06%    
24 30.00%    
25 35.00%    


Let us understand how this works with the help of an example.

Suppose Gurdeep has taken the Jeevan Labh plan with a cover of 5 lakhs and a policy term of 25 years. His Annual Premium was Rs. 21,000 + taxes. Each year, a bonus of Rs. 40 per 1,000 Sum Assured was declared. The bonus declared is an assumption to show how the surrender value is calculated. 

He paid the premium for 7 years. Now due to a financial crunch, he decided to surrender the plan. This is the amount he will get on surrendering the plan.

Premium Paid so far = 7 x 21,000 = Rs. 1,47,000
Surrender Value Factor for premiums = 50% (marked in the blue in the 1st table)
Bonus received in the plan in 7 years = (40 x 5,00,000 / 1,000) x 7 = Rs. 1,40,000

The Guaranteed Surrender Value of the Jeevan Labh would be as follows:

Surrender Value of Premiums = Rs. 1,47,000 x 50% = Rs. 73,500
Surrender Value of Bonus = Rs. 1,40,000 x 15.93% = Rs. 22,302

So Gurpreet will get Rs. 73,500 + Rs. 22,302 = Rs. 95,802 if the plan is surrendered after 7 years.

This is the Guaranteed Surrender Value. A Special Surrender Value maybe paid by LIC - this value can only be known at the time of actual surrender.

To know more about how this plan works - Read the LIC Jeevan Labh Review.

In case you have any questions on this, please drop a comment and we will get back to you.

Deepak Yohannan
Deepak Yohannan is the CEO of MyInsuranceClub. He enjoys writing on Personal Finance and contributes regularly on sites like Reuters & Moneycontrol. He is a strong proponent of online insurance and is often found pointlessly babbling about it!

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