LIC Policy Surrender: Procedure, Value, Form, Processing Time, How to Surrender Before Maturity?

Updated on: Nov 12th, 2025

4 min read

LIC policy surrender means discontinuing the policy before its maturity and claiming the surrender value of LIC policy. Once surrendered, all benefits, coverages, and bonuses under the plan cease immediately. Understanding how to surrender LIC policy is important as the process requires specific forms, documents, and eligibility conditions.

Key Highlights
The policyholder receives a surrender value after at least 3 years of premium payments.
Surrender value is calculated using a formula with sum assured, bonuses, and surrender factors.
Policies can be surrendered offline at an LIC branch or online via the LIC portal.
Required documents include Form 5074, original policy bond, ID proof, PAN, and bank details.
Once surrendered, the policy cannot be revived.

What is LIC Policy Surrender?

LIC policy surrender is the voluntary termination of a life insurance policy before maturity. The coverage stops immediately, and the policyholder gets back a lump sum known as the surrender value.

The surrender value of LIC policy represents the paid-up value plus accumulated bonuses (if any) after deducting applicable charges.
Most LIC policies acquire a surrender value only after 3 full years of premium payment.

Types of Surrenders in LIC Policy

Here are some of the common ways of LIC policy surrender:

Full Surrender

This is when the policyholder chooses to completely cancel their ongoing policy. Hence, the policyholder won't need to pay premiums anymore and won't receive any policy benefits or claims in the future. Depending on the type of policy, LIC will make the pay-out which is typically a certain percentage of premiums paid, after the deduction of applicable surrender charges.

Special Surrender

It is applicable, especially in a few exceptional situations where LIC sets specific terms for surrendering the policy, differing from standard procedures. These situations may involve severe financial difficulties, unexpected events or serious illnesses, where LIC offers reduced charges or a better surrender value.

Surrender as a Result of No Payment of Premiums

If a policyholder is unable to pay premiums and renew the life insurance policy within a specified grace period, it will be treated as surrendered. In such a scenario, if the policy has got a surrender value, he or she will receive the amount as per the agreed terms. But if the policy has not got a surrender value, no such pay-outs would occur.

How to Surrender LIC Policy Offline?

Here is the step-by-step guide on how to surrender LIC policy:

To start with, visit your nearest LIC branch and obtain Form 5074, also known as the Surrender Discharge Voucher.
Upon completion, the form along with the necessary documents must be submitted.
Following submission, LIC will process your policy surrender request.
Upon approval, the surrender value will be transferred to your bank account.
Alternatively, instead of visiting a branch, you can opt to courier the discharge voucher and other necessary documents to LIC's head office in Mumbai.

How to Surrender LIC Policy Online Before Maturity?

Here is how to surrender your LIC policy online before maturity:

Navigate to the LIC’s official portal and sign in using your credentials.
Under the “Customer Services” tab, select “Policy Surrender”.
Then, download the Surrender Discharge Voucher (LIC Form No. 5074).
Fill it up carefully and submit the same along with the necessary documents to LIC.
Once the form is accepted, the surrender process will start.
The surrender value will be deposited into your registered bank account.

Documents Required to Surrender LIC Policy

Here are some of the documents required if the policyholder chooses LIC policy surrender:

Policy surrender application form
Form 5074: surrender discharge voucher
Cancelled cheque for providing policyholder's bank account details
Original policy bond
NEFT mandate form
PAN Card copy

How to Calculate the Surrender Value of LIC Policy?

You can opt for LIC policy surrender only if you fulfil certain criteria such as payment of policy premium consecutively for 3 years. Hence, if you wish for a LIC policy surrender within the initial 2 years, LIC won't provide any incentives.

You can calculate the surrender value of LIC policy by using the formula given below:

Surrender Value = (Paid-up Value + Vested Bonus) × Surrender Value Factor

Paid-up Value = (Number of premiums paid ÷ Total premiums payable) × Basic Sum Assured
Surrender Value Factor is determined by LIC depending on the policy term and duration.

Example:
If your policy’s Sum Assured is Rs. 5,00,000 and you have paid 6 out of 10 years of premiums, your paid-up value will be:

(6 ÷ 10) × Rs. 5,00,000 = Rs. 3,00,000
If vested bonuses are Rs. 30,000 and the surrender factor is 30%,
Surrender Value = (Rs. 3,30,000 × 30%) = Rs. 99,000

How to Check LIC Policy Surrender Status Online?

Here are the steps to check the LIC policy surrender status online:

Navigate to the official LIC website.
Log in to your account using your credentials. If you are a new user, click on ‘register’.
Then from the left side of the homepage, select ‘Enrol Policies’.
Click on 'Click to Enrol New Policies' and then on 'Proceed.'
Enter the necessary details like the policy number, the policyholder's name and the premium amount. Then simply click on the 'Enrol your policy' option.
Under the 'Loan and Bonus' column, select 'Click for details' next to your policy.
Here, you can find information about your loan eligibility and surrender value.

What Happens after Surrendering an LIC Policy?

After LIC policy surrender, here are the following things that will happen:

Your coverage ends right away.
You get the surrender value.
The policy becomes void and can't be restarted later.
You lose all the benefits that come with the policy.
You won't get any tax benefits under Section 80C anymore.

LIC policy surrender is a major financial decision as it ends insurance coverage and related benefits permanently. It should ideally be considered only after evaluating alternatives like policy loans or partial withdrawals. If LIC policy surrender is unavoidable, ensure all documents are submitted correctly and understand the surrender value to make an informed choice.

Frequently Asked Questions

Can I surrender my LIC policy online?

Yes, you have the option to surrender your ongoing LIC policy via online, as LIC provides a fully digitalised surrender facility for better convenience.

Can I close my LIC policy before maturity?

Yes, you can close your LIC policy before maturity either by physically visiting your nearest LIC branch by contacting your LIC agent or by filling out a surrender application online.

When can I surrender my LIC policy?

Each type of LIC policy comes with different terms and conditions; hence, it is extremely crucial for the policyholder to thoroughly go through the LIC policy documents before filing a surrender policy form.

How to cancel LIC policy within 15 days?

To cancel an LIC policy within 15 days, you must carefully understand the cancellation terms such as penalties, specific timeframes, etc. Then, you can either visit your nearest LIC branch to initiate the cancellation process. You can also contact your LIC agent and surrender your existing LIC policy.

How to cancel LIC policy after 1 year?

If you are willing to surrender an LIC policy within 1 year, it's essential to thoroughly go through the policy terms and conditions including penalties, specified timeframes, and other relevant terms. Also, there can be policies where cancellation within a year is not allowed and it could lead to severe penalties.

How to check the surrender value of an LIC policy?

To check the surrender value of your LIC policy, simply login to the LIC portal using your credentials. Then head on to the existing policy details section where you will find the current surrender value of your existing policy.

How to download the surrender value of your LIC policy?

You can check the surrender value of your existing LIC policy by logging in to the LIC portal and navigating to the policy detail section. There, you will find the surrender value of your policy.

What is the processing time for surrendering a LIC policy?

It typically takes a few weeks to process the surrender request of an LIC policy.

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

In case you surrender your LIC after 3 years, your surrender value will be approximately 30% of the total premiums paid. However, the premium paid for the first year and the premiums paid towards accidental benefits coverage riders are excluded from it.

Is it good to surrender an LIC policy after 10 years?

Even if you surrender your policy after 10 years, LIC never recommends you surrender your policy before maturity as the surrender values would always be comparatively lower. However, based on your emergency you can reorder your priorities and go for cancellation if it is necessary.

How can I convert my LIC policy to a paid-up policy?

If your policy has been active for over 10 years and you've paid premiums for at least 3 years, it will automatically convert to a paid-up status if you stop your premium payments. Similarly, for policies with a duration of below 10 years where you've fully paid premiums for over 2 years, the paid-up status will be applied under the same conditions.

How much time it takes to get money from LIC for surrender?

The surrender process varies with the policy type. Usually, the processing time in the surrender process can take up to a few weeks for LIC.

About the Author

Rucha K

Content Writer - Insurance

Insurance doesn’t have to be a maze of fine print. I simplify policies, bring clarity to the details, and make financial decisions easier—one blog at a time. I enjoy turning numbers and insights into clear, actionable narratives that simplify personal finance. Read more

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