LIC Surrender Value Calculator
Formula
V = B × y × S / 1000
GSV = g × P × y + h × V
PUV = S × min(y, k) / k + V
SSV = 1.02 × PUV / (1.085)n − y
Surrender value = max(GSV, SSV)
where
- V
- bonus vested so far
- B
- simple reversionary bonus, ₹ per ₹1,000 of sum assured a year
- y
- full years of premium paid
- S
- Basic Sum Assured
- GSV
- Guaranteed Surrender Value
- P
- annual premium; every year's premium counts, the first included
- g
- GSV factor on premiums: nil in year 1, 30% in year 2, 35% in year 3, 50% in years 4 to 7, then rising evenly and reaching 90% in the last two years
- h
- GSV factor on bonus: nil in years 1 and 2, then from LIC's table by years left to maturity, about 15% to 20% mid-term and 35% in the final year
- PUV
- paid-up value
- k
- premium paying term, in years
- SSV
- Special Surrender Value, the paid-up value discounted at 8.5% a year to today
- n
- policy term, in years
Under the IRDAI 2024 rules a policy can be surrendered once one full year's premium is paid: the Special Surrender Value from the end of year 1, the Guaranteed Surrender Value from two full years' premiums.
*Source IRDAI (Insurance Products) Regulations, 2024 (PDF), LIC Reversionary Bonus Rates, valuation as at 31 March 2021 (PDF), for the plans of 2021; not the source of the rates used
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 the total premiums paid, first year included, plus a 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 IRDAI 2024 basis. Both follow the rules for policies sold from 1 October 2024. 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.
What this calculator accepts
Policy term
- Minimum
- 2 years
- Maximum
- 40 years
Premium paying term
- Minimum
- 1 year
- Maximum
- 40 years
The same as the policy term on most plans, and shorter on a limited-premium one such as Jeevan Labh.
Years of premium paid
- Minimum
- 1 year
- Maximum
- The policy term you entered
One full year's premium is enough for a Special Surrender Value; the Guaranteed Surrender Value needs two. Policies sold before 1 October 2024 follow the older rules in their own document.
Sum assured
- Minimum
- ₹10,000
Annual premium
- What to enter
- The base policy premium
Excluding GST, riders and any extra premium. Rider premiums are not returned on surrender, so including them overstates the figure.
Bonus rate
- Minimum
- ₹0 per ₹1,000
From your LIC bonus statement. Enter 0 for a non-participating plan.
These figures come off your own policy document, so there is no eligibility table behind them: this is the range over which a surrender figure is meaningful.
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, first year included, plus a smaller percentage of any vested bonus. The percentage depends on the policy year you surrender in:
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 one LIC prints in the New Jeevan Anand (715) brochure, which is also the minimum the IRDAI (Insurance Products) Regulations, 2024 set for policies sold from 1 October 2024. 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 total premiums paid |
|---|---|
| Year 1 | Nil (the Special Surrender Value is available) |
| Year 2 | 30% |
| Year 3 | 35% |
| Years 4 to 7 | 50% |
| Year 8 onwards | Rising in equal steps (52.5%, 55%, 57.5% a year on a 20-year term) |
| Final two years | 90% |
The flat 50% through year 7 is what makes early surrender so expensive. On a five-year-old policy with ₹25,000 annual premiums, you have paid ₹1,25,000 and the GSV is half of it: ₹62,500, before adding the bonus component. Policies sold before 1 October 2024 were worse still: their GSV left the first year's premium out altogether.
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. On a policy sold since October 2024, LIC lends up to 50% of the surrender value before two full years' premiums and 75% after (New Jeevan Anand's brochure; other plans print their own limits), at a rate fixed each May. 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
What is surrender value in LIC?
The amount LIC pays you if you end a policy before it matures, sometimes called the cash surrender value. Under the IRDAI rules in force since 1 October 2024 a policy can be surrendered once one full year's premium has been paid, and from then on LIC works out two figures, the Guaranteed Surrender Value and the Special Surrender Value, and pays the higher. It is almost always less than the premiums paid, and the policy ends the moment it is paid.
How do I check the surrender value of my LIC policy?
Take four figures off the first page of your policy document, the sum assured, the policy term, the annual premium and the premium paying term, then count the full years of premium you have paid. Enter them in the LIC surrender value calculator above, with the plan if it is listed, and it shows both surrender values and what the policy would pay if you kept it. The figure LIC is bound by is the written surrender quotation from your servicing branch.
How much surrender value will I get after 8 or 10 years?
On a 20-year policy, 52.5% of the total premiums paid if you surrender in year 8 and 57.5% in year 10, on the Guaranteed Surrender Value grid in LIC's New Jeevan Anand brochure, plus roughly 18% of the bonus vested by then. The percentage rises with every year paid and with how near the policy is to maturity, which is why the same 10 years is worth more on a 15-year policy than on a 25-year one. The Special Surrender Value is often higher by year 10, and LIC pays whichever of the two is greater.
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, first year included, plus a smaller percentage of any vested bonus. The percentage is 30% in year 2, 35% in year 3, 50% from year 4 to year 7, and rises from there 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?
On a policy sold since 1 October 2024, once the first policy year is complete and one full year's premium has been paid. From then the Special Surrender Value is available; the Guaranteed Surrender Value needs two full years' premiums. A policy sold before that date runs on the older rules printed in its own document, which generally gave nothing before two or three full years' premiums.
Will I lose money if I surrender my LIC policy?
Almost certainly, if you surrender in the first half of the term. The Guaranteed Surrender Value is nil in year 1 and only 30% to 50% of the premiums paid in years 2 to 7. Surrendering a 20-year policy at year 5 typically returns about 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) (Schedule II of the Income-tax Act, 2025) 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.
Spot something wrong?
If a figure on this page disagrees with an LIC premium notice, bonus statement or benefit illustration, tell us and we will check it against the brochure. Anything else you think this page gets wrong is just as welcome.