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Surrender Value of LIC Bima Shree Plan - Check your surrender value
Surrender Value of LIC Bima Shree Plan - Check your surrender value
Jun 14, 2018 | 1271 VIEWS

Surrender Value of LIC Bima Shree Plan

If for some reason, you wish to surrender your LIC Bima Shree Policy, the tables below will show the amount that will be returned back to you. You will need the Surrender Value Factors which are mentioned below to know the exact amount. You get back a part of the premium paid by you. So here is how it works. 

Note - The tax components and the premiums for riders are not returned if you surrender this plan. The % is on the basic premium without tax.

Surrender Value Factors for the premiums paid
 
Policy Year Policy Term
14 years 16 years 18 years 20 years
1 0.00% 0.00% 0.00% 0.00%
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%


Surrender Value Factors for the Guaranteed Additions

The vested Guaranteed Additions also acquires a Surrender Value and is paid out when you surrender the plan.
 
Policy Year Policy Term
14 years 16 years 18 years 20 years
1 0.00% 0.00% 0.00% 0.00%
2 8.85% 8.58% 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%


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

Suppose Bhavesh who is 30 years old has taken the LIC Bima Shree Plan with a cover of Rs. 10,00,000 and a policy term of 20 years and PPT of 16 years. His Annual Premium was Rs. 1,08,584 + taxes. 

He paid the premium for 5 years. Now due to a financial crunch, he decided to surrender the plan after 5 years. He gets a Surrender Value for the Premium Paid and for the Guaranteed Additions accrued the plan. This is the amount he will get on surrendering the plan.

Premium Paid so far = 5 x 1,08,584 = Rs. 5,42,920
Surrender Value Factor for premiums = 50% (marked in the blue in the 1st table)
Surrender Value of Premiums in LIC Bima Shree after 5 years = Rs. 5,42,920 x 50% = Rs. 2,71,460 (A)

Guaranteed Additions Accrued in 5 years = 5 x 50,000 = Rs. 2,50,000
Surrender Value of Guaranteed Additions after 5 years = 17.03% (marked in the blue in the 2nd table) = Rs. 2,50,000 x 17.03% = Rs. 42,575 (B)


Total Surrender Value after 5 years = (A) + (B) = Rs. 2,71,460 + 42,575 = Rs. 3,14,035


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 Bima Shree Plan 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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