Lic Surrender Value Calculator

LIC Surrender Value Formula:

\[ SV = (Premiums Paid \times SV Factor) + Bonus - Loans \]

Premiums Paid:

currency

SV Factor:

decimal

Bonus:

currency

Loans:

currency

Surrender Value (SV):

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1. What Is The Lic Surrender Value?

The LIC (Life Insurance Corporation) Surrender Value represents the amount a policyholder receives upon prematurely terminating their life insurance policy before its maturity date. It consists of a portion of premiums paid, accumulated bonuses, minus any outstanding loans against the policy.

2. How Does The Calculator Work?

The calculator uses the LIC Surrender Value formula:

\[ SV = (Premiums Paid \times SV Factor) + Bonus - Loans \]

Where:

\( Premiums Paid \) — Total premiums paid to date (currency)
\( SV Factor \) — Surrender value factor (decimal, typically between 0.3-0.9)
\( Bonus \) — Accumulated bonuses declared by the insurer (currency)
\( Loans \) — Any outstanding loans taken against the policy (currency)

Explanation: The surrender value factor depends on policy duration, type, and terms. Higher factors apply to policies held longer.

3. Importance Of Surrender Value Calculation

Details: Calculating surrender value helps policyholders understand the financial implications of early policy termination and make informed decisions about their insurance investments.

4. Using The Calculator

Tips: Enter all values in the same currency. Premiums paid and bonus should be positive numbers. SV factor is typically provided by your insurance company and varies based on policy duration.

5. Frequently Asked Questions (FAQ)

Q1: When does a policy acquire surrender value?
A: Typically after 2-3 years of premium payments, depending on the policy type and terms.

Q2: Is surrender value taxable?
A: In many jurisdictions, surrender value may be subject to taxation if it exceeds the total premiums paid.

Q3: What affects the SV factor?
A: Policy duration, type (term, whole life, endowment), and the specific terms of your insurance contract.

Q4: Can I get a loan against my policy?
A: Most life insurance policies allow loans after accumulating cash value, typically after 3 years of premium payments.

Q5: Should I surrender my policy?
A: Consider alternatives like policy loans or paid-up options before surrendering, as surrender values are typically lower than the policy's potential maturity value.