विशेषज्ञ की सलाह चाहिए?हमारे गुरु मदद कर सकते हैं

Ramalingam Kalirajan |8899 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on May 29, 2025

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more

Asked by Anonymous - May 25, 2025

Hello Sir. Could you please help me to evaluate on to Surrender LIC policy is a wise decision now. Plan details below. Plan - Lic Jeevan Anand 815 Sum insured - 8lakhs Premium - 36 Annualy Policy in force from - 2015 Maturity year - 2040 Premium paid - 10 years Premium remaining - 15 years Please help me to understand if I surrender this policy will be beneficial to reduce by debts or to invest in MF via SIP. Also please advise how much I get if I surrender the policy now. Thank you Thank you.

Ans: You have clearly outlined your concern. Evaluating whether to surrender your LIC Jeevan Anand Plan 815 is a valid question, especially in a debt crisis. Let's assess this from a 360-degree financial planning perspective.

Policy Summary and Present Status
Policy Name: LIC Jeevan Anand (Plan 815)

Sum Assured: Rs. 8 lakhs

Annual Premium: Rs. 36,000

Policy Start Year: 2015

Maturity Year: 2040

Premiums Paid: 10 years completed

Premiums Remaining: 15 more years to go

You have paid Rs. 3.6 lakhs till date (Rs. 36,000 × 10 years)

Surrender Value Possibility at This Stage
After 10 years, policy acquires good surrender value.

You are eligible for a Guaranteed Surrender Value plus bonus value.

Usually, you can get 30% to 50% of total premiums paid.

That means, you may receive around Rs. 1.2 lakhs to Rs. 1.8 lakhs.

Bonus accumulated may add another Rs. 20,000 to Rs. 50,000

So, expected surrender value = Rs. 1.5 lakhs to Rs. 2.3 lakhs.

You must confirm exact amount from the LIC branch or online portal.

LIC agents may not give accurate surrender value details. Go to branch directly.

Is Surrendering Beneficial During Debt Pressure?
You are currently under heavy debt of Rs. 30 lakhs.

Every rupee counts in managing your debt pressure.

Rs. 2 lakhs recovery from this LIC policy can ease your situation slightly.

Also, you will stop paying Rs. 36,000 annually going forward.

That means extra Rs. 3,000 every month saved.

This saving can be used to clear smaller EMIs.

Stopping premium outflow will ease your monthly budget.

Also, LIC policies give very low returns – around 4% to 5% per year.

That’s not good enough when your loans are charging 18% or more interest.

Holding this policy makes no sense when you are paying 2x or 3x in interest.

Insurance and Investment Are Different
LIC Jeevan Anand is an investment cum insurance plan.

Such plans offer low insurance cover and low returns.

You must separate insurance and investment always.

Buy term insurance only for pure life cover.

Invest separately in instruments with better returns.

Do not mix the two goals. It creates confusion and underperformance.

Once Debts Are Cleared – Start Fresh Investment
When your loan burden is reduced, start SIPs in mutual funds.

But don’t choose direct funds on your own. They look cheaper but are risky.

Direct plans don’t guide you when market falls.

Regular plans via MFD with CFP support are more reliable.

Professional help matters more than 0.5% savings in cost.

Actively managed funds give consistent performance over time.

Index funds don’t adapt to market changes. They lack flexibility.

Actively managed funds are better in Indian markets due to volatility.

Invest in regular mutual funds through a Certified Financial Planner.

What If You Don’t Surrender the Policy?
You’ll continue paying Rs. 36,000 every year for 15 more years.

Total outflow will be Rs. 5.4 lakhs more in future.

On maturity in 2040, expected return will be around Rs. 12 to 14 lakhs.

That gives you less than 5% return yearly.

Against that, your credit cards or personal loans are eating 18% to 36%.

You are borrowing at 36% and investing at 5%. It is a huge mismatch.

It is not wise to keep such a policy when under high debt pressure.

Also, keeping it does not help in your credit score recovery.

It only blocks your cash flow for the next 15 years.

If You Are Emotionally Attached to the Policy
Some people feel emotional about LIC policies.

They may feel security or trust due to LIC brand.

But emotional decisions don’t work well in money matters.

Make decision based on logic, not emotions.

You can always restart investment later with better options.

But your debt needs urgent solution today.

Steps to Surrender the Policy
Visit the LIC branch where the policy was issued.

Carry original bond, ID proof, cancelled cheque, and surrender request form.

Request surrender value statement. Ask for exact amount.

Submit the request in writing and get acknowledgement.

You will get amount by NEFT in 7–10 working days.

Once received, use it immediately to reduce your highest-interest loan.

What to Do with the Surrender Proceeds
Don’t spend the amount. Use it only for loan repayment.

Target the most painful loan first – credit card or loan app.

Next, use the freed-up monthly Rs. 3,000 for loan EMIs.

Recalculate your EMI burden after that.

This will reduce your stress and improve CIBIL score.

Don’t reinvest this money now.

Focus only on debt elimination till your income becomes stable.

Final Insights
Your decision to question this policy is smart.

Most people don’t review old policies. You have taken a right step.

Surrendering this LIC policy now is a wise choice.

It gives cash today and saves money in future.

It helps you reduce debt faster and gain control over money.

Once your situation improves, you can start better investments.

Don’t feel guilty for surrendering. It is a practical step, not failure.

Financial planning is about making right choices at right time.

And this is the right time for that decision.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

Asked on - May 29, 2025 | Answered on May 30, 2025

Hello Sir, Thank you very much for taking some time to give your insights. I inquired about surrender value and maturity amount. If i decide to Surrender the policy now, I would get between 2 Lakhs to 2.25 Lakhs. On maturity, I would get around 21 Lakhs. This includes bonuses and other extra. I even checked in LIC online tool. Request you to please advise on this. Thank you so much.

Ans: Thank you for sharing the updated surrender value and maturity amount details.

You will get Rs. 2 to 2.25 lakhs if you surrender now.

On maturity, you may get Rs. 21 lakhs after 15 more years.

Now, let’s assess both options from practical, financial, and emotional angle.

Comparing Current Value vs Future Value

If you hold, you will pay Rs. 5.4 lakhs more over 15 years.

The return will be Rs. 21 lakhs. That includes your Rs. 3.6 lakhs already paid and Rs. 5.4 lakhs more.

Net gain is around Rs. 12 lakhs over 15 years.

This gives you less than 5% annual return.

Also, this money is locked for 15 years. No liquidity.

If You Surrender Today

You get Rs. 2 to 2.25 lakhs in hand now.

No more premium to be paid. Rs. 36,000 saved annually.

That frees up cash every month. Rs. 3,000 monthly is useful for other priorities.

If you invest through SIP in mutual funds, you get better returns.

Debt pressure also reduces faster with this Rs. 2 lakh.

Emotion vs Logic

Rs. 21 lakhs after 15 years may sound attractive.

But this is slow growth. And not flexible.

You must not make decisions from emotional attachment.

LIC policies sound secure, but are poor wealth creators.

You can get better cover with term plan and better returns with mutual funds.

Decision Summary

Surrender now gives flexibility, cash flow, and debt support.

Continuing gives low return, poor liquidity, and future burden.

From Certified Financial Planner’s view, surrendering is the right choice now.

Once your debt is under control, start SIPs in regular mutual funds through MFD with CFP support.

You will grow faster and stay more financially stable.

You have taken right steps by evaluating surrender now.

Make the change and move to better financial future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.