LIC Surrender Value Calculator
Take the figures off your policy document and see what LIC would pay you today — and what you would be giving up by not holding on.
How this figure is worked out
ContractualTwo figures, and LIC pays the higher. The Guaranteed Surrender Value is a contractual percentage of premiums paid, excluding the first year's, plus a much smaller share of vested bonus. "Premiums paid" means the base policy only: any rider premiums you paid are excluded and are not returned on surrender. The Special Surrender Value is the paid-up value of the policy discounted back to today, on the post-2024 IRDAI basis. The GSV grid is contractual; the SSV factors are LIC's own and not published in full, so that half is the more approximate of the two.
These are written into the policy conditions, not projections. They do not change with LIC's annual valuation.
How LIC works out a surrender value
LIC calculates two numbers and pays whichever is higher. Understanding both tells you a great deal about when surrendering is merely expensive and when it is ruinous.
Guaranteed Surrender Value
The GSV is contractual. It is a percentage of the total premiums you have paid, excluding the first year's premium entirely, plus a much smaller percentage of any vested bonus. The percentage depends on how long the policy has run:
Guaranteed Surrender Value, as a % of premiums paid
ContractualEvery LIC policy document sets out a GSV grid, and the IRDAI sets the floor those grids have to clear. Because it is written into the contract, this is the one figure on the site LIC cannot revise after you buy — which is exactly why it matters when you are deciding whether to exit. The grid below is the standard shape: nothing for the first two years, 30% at year three, 50% through the middle, rising to 90% at the end. Your own policy document is the authority for your policy.
These are written into the policy conditions, not projections. They do not change with LIC's annual valuation.
IRDAI notified regulations, including minimum surrender valuesYour policy document — LIC customer services
| Policy year | GSV as % of premiums paid (excluding year 1) |
|---|---|
| Before year 3 | Nil — no surrender value at all |
| Year 3 | 30% |
| Years 4 to 7 | 50% |
| Years 8 onwards | Rising steadily towards 90% |
| Final two years | 90% |
The exclusion of the first year's premium is what makes early surrender so punishing. On a five-year-old policy with ₹25,000 annual premiums, you have paid ₹1,25,000 but the GSV is calculated on ₹1,00,000, and then only half of that is payable — ₹50,000, before adding the small bonus component.
Special Surrender Value
The SSV starts from the paid-up value: the sum assured multiplied by the proportion of the premium paying term you have completed, plus all vested bonuses. That paid-up amount is then discounted back to today, because it would otherwise have been payable at maturity. The closer you are to maturity, the less discounting there is, so the SSV climbs sharply in the later years and generally overtakes the GSV.
Three alternatives worth considering first
- Make the policy paid-up. Stop paying and let the reduced cover and vested bonuses run to maturity. You get nothing today but considerably more later, and the life cover survives.
- Take a policy loan. LIC lends up to 90% of the surrender value on an in-force policy at a fixed rate. If the need is temporary, this keeps the policy — and the Final Additional Bonus — intact.
- Use the revival window. If the policy has already lapsed, LIC allows revival within five years of the first unpaid premium, with interest. That is usually far better value than surrendering a lapsed policy.
Whatever the calculator says, the one number that matters is the written surrender quotation from your servicing branch. Ask for it, and for the paid-up value alongside, before you sign anything.
LIC surrender value — common questions
How is LIC surrender value calculated?
LIC pays the higher of two figures. The Guaranteed Surrender Value is a percentage of the total premiums paid, excluding the first year's premium, plus a much smaller percentage of any vested bonus. The percentage starts at 30% after three years and rises with duration to 90% in the final two years. The Special Surrender Value is based on the paid-up value of the policy — the sum assured scaled by the proportion of the premium term you have completed, plus vested bonuses — discounted back to today.
After how many years can I surrender an LIC policy?
After two full years' premiums if the premium paying term is under 10 years, and after three full years' premiums otherwise. Before that the policy has no surrender value at all and you receive nothing. Policies issued under the post-2024 IRDAI surrender value regulations acquire value sooner in some cases; check your policy document.
Will I lose money if I surrender my LIC policy?
Almost certainly, if you surrender in the first half of the term. The first year's premium is excluded entirely from the Guaranteed Surrender Value, and the applicable percentage is only 30% to 50% in the early years. Surrendering a 20-year policy at year 5 typically returns well under half of what you have paid in. You also forfeit the Final Additional Bonus completely, which on a long policy can be the single largest component of the maturity value.
What is the difference between GSV and SSV?
The Guaranteed Surrender Value is contractual — LIC must pay at least that amount, and it is calculated from premiums paid. The Special Surrender Value is discretionary and calculated from the paid-up value of the policy; LIC reviews the factors periodically. In practice the SSV is usually higher, particularly in the later years of a policy, and LIC pays whichever of the two is greater.
Is a paid-up policy better than surrendering?
Often, yes. If you stop paying premiums after the policy has acquired a surrender value, it becomes paid-up: the sum assured reduces in proportion to the premiums you actually paid, but the reduced cover and all vested bonuses stay in force until the original maturity date. You get nothing now, but you get more later, and you keep the life cover. Compare the surrender figure against the paid-up value below before you decide.
Is LIC surrender value taxable?
If the policy met the Section 10(10D) conditions — premium within 10% of the sum assured, and for policies from 1 April 2023, aggregate premiums within ₹5 lakh — the surrender proceeds are exempt. If it did not, the proceeds are taxable and LIC deducts TDS at 2% under Section 194DA on the income component when the payout exceeds ₹1 lakh.