LIC Surrender Value Calculator – Know the Loan Eligibility ?

LIC Surrender Value Calculator – Surrender Value is a very common term among person who have invested in life insurance policies. Number of time we encounter with this term in banking sector also, Bank provide the Overdraft or Loan on Life Insurance policy against surrender value. Generally loan can be granted amounting 85-90 per cent of the surrender value.

I was asked by a Banker that how can one calculate the Surrender value of Life Insurance policy ? In this article I have mentioned the process to calculate the Surrender value of Life Insurance Policies.

What is Surrender Value ?

First of all one should know about the surrender value which is defined as the total amount which an investor received from the life insurance company if he decides to exit the policy before maturity. 

First of all before taking the new Policy one should assure that the Policy have had features of Surrender value. There are many Life Insurance policies which doesn’t have Surrender value features or Endowment policies which are very complicated to understand.

How To Know , The Policy Has had the  Surrender Value ?

Generally If Policy holder has paid the regular premium continuously for three years against the Policy then such policies can be used for calculating surrender value.One can freeze his premium paying after the end of three years and convert it in to paid up one. 

There are two types of surrender value :

a) Guaranteed Surrender Value and

b) Special/cash surrender value.

While the guaranteed value is easy to calculate and is mentioned in the product brochure and the policy bond, The Special Surrender Value only after the policyholder puts in the surrender request.

How To Calculate the Surrender Value ?

There are two ways to know the surrender value. Life Insurance of India (LIC) policy holder can get the surrender value of their life insurance policy online following the below steps :

1. First of All Register Your self  after visiting as a new user
2. Login to your account and click “Enrol Policies” in the left menu.
3. Visit  “Click to Enrol New policies” and click “Proceed”
4. Enter your policy number along with premium paid and “Enrol your policy”

5. After enrolling the policy, check “View Enrolled policies

6. Check  “Click for details” under “Loan and Bonus” Tab
7. The in built application will show you the Surrender value.

Also Read – Apply Canara Bank Health Insurance Policy With Bajaj Allianz

How To Calculate the Surrender Value Manual ?

For Calculating the Life Insurance surrender value, the very first thing is to calculate the Paid Up Value of the Investment Policy. Paid value is calculated to compare whether the Policy should surrender or not.

LIC Surrender Value Calculator Formula : 

Know the formulae of LIC Surrender Value Calculator

PAID UP VALUE = [No of Premium Paid(Yearly) * Sum Assured/Policy Term] + [Bonus * Sum Assured/1000] 

SURRENDER VALUE = [Surrender value factor * Paid up value /100]

LOAN VALUE = (% Of Loan Eligibility)*SURRENDER VALUE (Loan Eligibility may varies bank to bank like 85%, 90% etc)

Note : Bonus can be extract from the Companies bonus chart . Surrender Value Factor also can be taken from the chart.

Like LIC Bonus Chart can be Viewed : Here

Example : Mr. Raj takes an endowment policy of 25 years on 01/01/1980 for sum assured of Rs. 1 lakh and has paid all the premiums upto till 31/12/1999 i.e. for 20 years. Now, he would want to know how much loan he can get?

SOLUTION : For Obtaining the Loan Eligibility We need to find out the PAID UP Value and Surrender Value. According to the details we can calculate :

PAID UP VALUE = [20*100000/25]+[1321*100000/1000] * Bonus is taken from the chart Endowment policy of 20 Years

The Value comes around : 2,12,000

Calculate Surrender Value = 65.49*212100/100 = 1,38,904

Therefore LOAN VALUE = 90% * Surrender Value i.e. 138904 =1,25,013

NOTE : for lapsed policy, the loan % allowed is 85%. It is generally seen that The minimum surrender value is 30% of total amount of premiums paid excluding the premiums paid for the first year for any Endowment policy.

NOTE : Recently IRDA has implemented that none of the life insurance companies have been asked to levy surrender charges if the policyholder chooses to terminate the cover after five years.


  1. provided data totally wrong

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