How to Surrender LIC Policy Online? A 2024 Guide on How to Close or Withdraw LIC Policy Before Maturity Online


10 min read

Updated on Dec 21, 2023

A Complete Guide on LIC surrender online process or Close LIC Policy Online Before the Maturity and how to use LIC Surrender Value Calculator?

Wondering how to surrender LIC policy online? The procedure is easier than it looks initially. There are sometimes many reasons behind surrendering an LIC policy and if that is the case for you, then here is some help at hand.

What is LIC Policy Surrender?

LIC policy surrender means opting out of your LIC policy before its maturity. The amount received in one such situation is the LIC policy surrender value. Once you undergo your LIC policy surrender, you would not be able to revive it in the future. However, before you surrender your LIC policy, you need to be aware of the fact that you will not get the original benefits which are much higher as compared to the surrender value.

Also Read: Step by Step Process to Check LIC Policy Status Without Registration

When should you Surrender your LIC Policy?

The terms and conditions of all LIC policies vary. Therefore, before you decide to buy one, you must go through them very carefully. The period of policy surrender depends much on the premium paying terms and time of purchase of the policy. To surrender a LIC policy, the usual situations are mentioned herein below:

#Limited period and regular premium plan

Under a limited period and regular plan, each policy will have its own terms and conditions. However, in most cases,
If the tenure of the policy is 10 years or less, the duration of surrendering the policy is 2 years
If the tenure of the policy is more than 10 years, the duration of the surrender of the policy is 3 years.

#Single premium plan

Under a single premium plan, you can surrender a policy only in the second year of buying it.

Payment in Case of Surrender 

The Surrender value of LIC policy is determined by the surrender processing time of the LIC plan. Guaranteed Surrender Value and Special Surrender Value are the two types of surrender values available under LIC:

1. Guaranteed Surrender Value (GSV)

The guaranteed surrender value allows the policyholder to surrender their plan only when it completes 3 years duration. So, the policyholder is supposed to pay the premium for at least 3 years after policy purchase. When the policyholder surrenders the plan after 3 years, the value received is 30% of the total paid premiums, which excludes premiums paid in the first year as well as the premiums paid towards riders like accidental benefit riders etc.  Hence, the later the policy is surrendered, the greater the value you would receive as surrender amount.

2. Special Surrender Value

The Special surrender value is normally higher than the guaranteed surrender value.  The below is the way in which the special surrender value of LIC works:

  • If the policyholder pays premiums for a period of 3 to 4 years, the amount received as surrender value is 80% of sum assured at maturity
  • If the policyholder pays premiums for a period ranging between 4 to 5 years, the maturity amount received is 90%
  • If the policyholder pays the premiums for more than 5 years, the maturity amount received is 100% of sum assured

3. An Alternative to LIC Policy Surrender

Though policyholders can surrender an LIC policy, they can also apply for an alternative. They can stop paying premiums for their plan and keep the plan active rather than surrendering the plan. This is possible in the case of paid-up policy, where the sum assured is less. Here, the coverage on life continues till the end of the term of the policy.

4. Paid-up Value versus Surrender Value

Paid-up value is similar to surrender value in many ways. The table below will help in giving you a clarity between the two:

Features Paid – Up Value Surrender Value
Lump-sum pay Paid at the end of policy duration Paid immediately to the policyholder
Policy maturity/Death of insured Offers total paid up value No compensation provided
Extra Bonus NA NA
Premium pay Stopped immediately Stopped immediately

LIC Policy Surrender Online Process – How to Close LIC Policy Online Before the Maturity?

LIC (Life Insurance Corporation) of India is one of the most trusted investment avenues for Indian citizens. The company offers various kinds of insurance and investment plans for its customers. Why do then people search for how to cancel LIC policy or how to surrender LIC policy?

  • It sometimes happens that people hurry through their policy or investment decisions and do not check the finer points carefully.
  • Sometimes they end up choosing policies which are not suitable for them or they wish to switch to investing in another policy which gives them higher benefits in turn.

Is it then possible to cancel or surrender your LIC policy before the date of maturity or conclusion of the tenure? The answer is naturally Yes.

Documents Required for Policy Surrender

The documents that you have to submit while surrendering a LIC policy are:

  • LIC NEFT form
  • Original documents of the policy bond
  • LIC surrender form (firm 5074)
  • A canceled cheque
  • Request for surrender value payment
  • Details of your bank account
  • Original ID proof such as PAN card, Aadhar Card, or Driving License
  • A handwritten letter to LIC in which you mention your reason for discontinuing the policy.

Can I Surrender my LIC Policy Online? Things To Know While Surrendering your LIC Policy

  • Canceling your policy before the maturity date is called surrendering your policy.
  • You will get the surrender value upon closing your policy.
  • You can use a LIC surrender value calculator to find this amount. It will be calculated if the premium is paid for three years in succession.
  • Closing your policy before three years will lead to zero surrender value.
  • No financial expert will ever tell you to surrender the policy since it will not give you any benefits.

Also Read: LIC vs. Private Insurance Companies in India

Calculation of Surrender Value Using LIC Surrender Value Calculator

The formula used is the following – 

Surrender Value = {The Basic Sum Assured x (The Number of Premiums Paid/The Total Number of Premiums Payable) + The Total Bonus received} x-Factor of Surrender Value

Things about Surrender Value

  • The surrender value will be decided when you purchase the insurance plan.
  • Guaranteed Surrender Value is where you can surrender after paying premiums for three years. Your surrender value will be worked out at 30% of the premiums paid (excluding those paid in the first year and those paid for accidental benefits). This value will go up if you cancel the policy later on.
  • Special Surrender Value is another term that you should know. Suppose you stop paying your LIC premium after a certain period of time. Your policy will be active although the sum assured will come down. This is called the paid-up value. This is the actual sum assured (number of premiums paid/number of premiums payable).
  • Once the policy is closed before maturing, you will get a surrender value that will be higher than the guaranteed and special surrender value.
  • For the paid-up value, the lump sum will not be given instantly to you. However, the LIC policy surrender processing time is faster and you will get the surrender value eventually.
  • The total paid-up value is given to customers although no compensation is given if you are getting the surrender value instead.

Also Read: What Are the Late Payment Charges for LIC Premium?

Can I Surrender or Close LIC Policy Before Maturity Online? 

Here are some things to know if you were wondering how to close your LIC policy online:

  • You can surrender your policy in the second purchase year in case of single-premium plans.
  • The surrender tenure is two years if the policy is lower than 10 years for Limited Period or Regular Premium LIC policies. For more than 10 years, it will be three years.
  • You can submit back your LIC policy after making premium payments for three years with some documents. They include the following:
  1. Original bonds of the policy.
  2. Surrender Value Form or Form Number 5074.
  3. Surrender Value Payment Request.
  4. Canceled Cheque.
  5. Details of Bank Account.
  6. NEFT Form.
  7. Original Identity Proof.
  8. Official Letter stating the reasons for policy surrender.

Here is the actual procedure that you have to follow: 

  • You should go to your nearest LIC branch with the surrender discharge voucher or Form 5074 as mentioned.
  • Fill up this form and sign it.
  • Submit all documents for the procedure to begin.
  • Once the request gets approval, the surrender value will be paid to your bank account.
  • You can courier your voucher and documents to the LIC Head Office as well.
  • The address is Yogakshema Building, Jeevan Bima Marg, P.O. Box No- 19953, Mumbai-400021.
  • In this case, you need not visit the LIC branch.

Also Read: How to check the Surrender Value of LIC Policies?

Why you should not surrender LIC Policy?

There are quite many reasons to not surrender your LIC policy. Some of them are here.

  • With your age, the premiums also get higher. Therefore, if you surrender a policy and then purchase a new one, you will end up spending a lot of money
  • As compared to what you invest in the policy, the surrender value is lower
  • You will not get any protection from the life cover.

Alternative to surrendering LIC Policy

In case you are reconsidering surrendering your LIC policy, you can actually go for an alternative idea. You can stop paying premiums for your LIC policy; however, your life cover will be continued. While you do that, your policy will become a paid-up policy. Nevertheless, the sum assured, which is also called paid-up value, decreases under a paid-up policy. Even if you do not pay the premiums, the life cover will go until the policy term is over. If the policyholder passes away during the policy tenure or on the maturity of the LIC policy, the paid-up value is offered to the nominee/policyholder.

Guidelines of LIC for Cancelling a Policy in the Free-Look Period 

If you buy a LIC policy and realize that the policy doesn’t suit your needs, you have the option to cancel it. However, you must get the cancellations done within 15 days of the free look period. That means, you just have 15 days to rethink your LIC policy and cancel it if you don’t want to continue it.  Ideally, LIC doesn’t recommend the cancellation of its insurance plans, however, if a customer wants to leave a plan for another one, they can do so at their will within the first 15 days of buying the policy.      

So, if you are not satisfied with your policy, get it canceled within 15 days of buying the plan. This duration of 15 days is called a free-look period. 

Under the free-look period, you can:

  • Cancel the policy with reasons for the cancellation 
  • Receive the premium paid for the policy
  • A sum of the premium will be deducted by LIC for the days that you were covered under the plan

Guidelines of LIC for Policy Cancellation After the Free-Look Period

Here are a few guidelines by LIC to keep note of by people who want to cancel their LIC policies once the free-look period is over:

  • Surrendering a plan is allowed only when the insured has paid premiums for a minimum of three successive years
  • While calculating the surrender value, the premium amount paid in the first policy year is excluded 
  • In most cases, just 30% of the paid premium is returned to the policyholder as surrender value. However, the actual percentage of the surrender value varies depending on the terms of your LIC policy as well as the premiums you have already paid
  • Any extra premiums paid to avail riders/add-ons, tax benefits, or bonuses are not included while calculating the surrender value


Once you surrender your LIC policy, the insurance coverage will no longer exist and you will get the surrender value credited to your account. Also, the same policy cannot be restarted or revived. All the benefits will also cease to exist. The surrender value you get is considerably lower than the premiums paid by you. Hence, surrender your policy after thinking things through and only after taking proper financial advice.

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FAQs: How to Surrender / Close LIC Policy Online Before Maturity

Can LIC policy be surrendered online?

LIC policy can be surrendered online from the 3rd year of the policy onwards. However, the minimum duration of the policy should be 3 years and in case of longer tenures it can be 10 years and beyond.

What happens if I surrender my LIC policy before maturity date?

If a policyholder surrenders his/her LIC policy before maturity date, the life cover immediately comes to a halt and the insured won't be able to revive it in the future.

How much money will I get if I surrender my LIC policy?

A LIC policy can be surrendered after being in force for 3 years. Here, the surrender value received is equal to 30% of the total premiums paid excluding the paid premiums of the first year.

How can I know my LIC policy surrender value online?

The surrender value of LIC policy can be calculated using the below formula:
[Basic sum assured (Number of premiums paid/Total number of premiums payable) + Total bonus received] x Surrender Value Factor.

What may happen if I stop paying premiums for my LIC policy after 5 years?

Your policy will continue; however, the benefits you get will be reduced.

How much money can I get on surrendering my LIC policy after 5 years?

You will get a 100% special surrender value. However, this will only happen if you have paid the premiums regularly.

What if I do not pay premiums after 2 years of purchasing my LIC policy?

You will get a certain grace period within which you can make the premium payment. On crossing the grace period, the policy will get lapsed.

Is it worth surrendering my LIC policy?

It is certainly not a great idea to surrender your LIC policy. You can rather choose not to pay the premiums anymore, which let the policy be.

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Mar 10, 2022
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PayBima Team
PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.

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