am 27 years old i have LIC's Jeevan Umang Plan (945) With Commencement Date:-28/07/2022 With Instalment Premium: 66386.00 Per Year . For 20 Years. If I Surrender my LIC Policy than What amount of surrender value money it is worth it to surrender my ongoing policy

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

Ans: You are 27 years old. Your income is Rs. 80,000 per month. You are paying Rs. 45,027 annually for LIC’s New Jeevan Labh (Plan 936). You are also paying Rs. 66,386 annually for LIC’s Jeevan Umang (Plan 945). Both started on 28/07/2022. Combined, you are paying Rs. 1,11,413 per year. That is around Rs. 9,284 per month.

Let’s assess this from all angles.

? Your Age and Financial Advantage

– You are just 27 years old now.
– You have long working life ahead.
– This is the best time to build wealth.
– Time is your biggest asset right now.
– Small changes now will give big results later.
– Your current income is good.
– Rs. 80,000 per month gives you high saving potential.
– You are on the right track to start financial planning early.

? What LIC Policies Really Do

– Jeevan Labh and Jeevan Umang are traditional LIC policies.
– These are investment plus insurance plans.
– They offer low life cover.
– They offer very low returns.
– Returns are around 4% to 5% only.
– This is even lower than inflation.
– So your money loses value over time.
– You pay regular premium but get poor growth.
– These plans are not good for wealth creation.

? Problems With Investment-Cum-Insurance Plans

– These plans mix two different goals.
– One is protection, other is wealth building.
– But neither goal is fully achieved.
– Insurance cover is too low for your need.
– Investment return is too small for your future.
– Your money gets locked for long term.
– There is very low liquidity in such plans.
– You can’t withdraw when you need.
– If you miss premium, policy may lapse.
– It becomes a burden without good benefit.

? Better Way to Do Insurance

– Insurance is only for protection.
– For that, buy a pure term insurance plan.
– It is cheaper and gives high life cover.
– Premium will be very low at your age.
– You can get Rs. 1 crore cover at low cost.
– That will protect your family fully.
– Don’t use LIC traditional plans for insurance needs.

? Better Way to Do Investment

– Investment is for growth of money.
– Use mutual funds for this purpose.
– Start SIPs in actively managed mutual funds.
– These funds grow with market and give better returns.
– Index funds are not good for you.
– Index funds only copy the market blindly.
– They fall badly when market crashes.
– They don’t protect your money in tough times.
– Actively managed funds adjust risk and return.
– They are better for a long-term investor like you.

? Disadvantages of Continuing LIC Plans

– You will pay high premiums every year.
– Your returns will stay very low.
– You will not be able to stop in middle.
– You lose flexibility with your money.
– In future, you may need that money.
– But these plans lock it for 15–20 years.
– If you surrender later, you get less than what you paid.
– So, more delay will lead to more loss.

? Can You Surrender Now?

– Yes, you can surrender the plans now.
– But you have completed only 2 years.
– So surrender value will be low now.
– Still, it is better to stop early than regret later.
– You can consider paid-up option also.
– But that also gives poor return.
– The best step is to stop both policies.
– Take the loss now and secure your future better.
– Redeploy that money into mutual funds.

? What You Should Do Now

– First, buy a term insurance plan.
– This gives full life protection at low cost.
– Second, stop both LIC policies immediately.
– Don’t renew premium this July 2025.
– Third, start SIPs of Rs. 9,000 monthly in mutual funds.
– Choose 2 or 3 actively managed mutual funds.
– Use different types like large-cap, flexi-cap, hybrid.
– Start with regular plans through a Certified Financial Planner.
– Don’t go with direct mutual fund apps.

? Why Regular Funds Through CFP Are Better

– Direct funds offer no support.
– No one tells you when to change funds.
– During market fall, you may panic and stop SIPs.
– That harms your goals and confidence.
– Regular funds with CFP and MFD guidance give direction.
– CFP gives full financial planning service.
– They help in goal setting, rebalancing and exit strategy.
– Regular mode is more suitable for working individuals.
– Focus on value, not just cost.

? What Happens If You Delay Action

– You will continue paying Rs. 1.1 lakh yearly.
– For 20 years, this is over Rs. 22 lakh.
– You may get Rs. 30–32 lakh after 25 years.
– But value of money will reduce due to inflation.
– You are locking your potential wealth for poor gain.
– If you act now, your money will grow better.
– Mutual funds can build Rs. 1 crore in 25 years.
– But traditional LIC plans can’t reach there.

? Tax Benefit is Not Enough Reason

– LIC policies offer 80C benefit.
– But that’s not enough to keep bad investment.
– ELSS mutual fund also gives same benefit.
– And gives higher returns than LIC plans.
– Tax-saving should not be your main reason to invest.
– Return, liquidity and flexibility are more important.

? Protecting Your Financial Future

– You are young and earning well.
– This is the best time to invest right.
– Avoid emotional attachment to LIC policies.
– Take informed decision with full calculation.
– Focus on long-term wealth creation.
– Your financial freedom depends on your decisions today.
– Choose flexible, high-growth investment options.
– Stay protected with proper term insurance.

? Role of a Certified Financial Planner

– A CFP helps build your financial foundation.
– They create a plan based on your life goals.
– They track your progress and help in rebalancing.
– They also help in choosing right SIPs and insurance.
– A CFP ensures you don’t make random decisions.
– Instead of following crowd, you follow a structured path.
– Your money works better with CFP guidance.

? Finally

– You are still early in your working life.
– But LIC policies are not suitable for you.
– They give low return, low cover, and low flexibility.
– You should stop both plans now.
– Buy a good term insurance policy.
– Start mutual fund SIPs in regular plan through CFP.
– Plan your future with full awareness and proper support.
– Take this small step today.
– It will give you peace and growth for many years ahead.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

Ans: Your self-driven approach and minimalistic lifestyle are truly inspiring. Stopping traditional plan premiums and choosing to invest in mutual funds is a strong, thoughtful move.

» Understanding the Paid-Up Policy Option
– Converting to paid-up means you keep the policy with reduced benefits.
– No more premiums need to be paid once made paid-up.
– Insurance coverage continues but is much lower than the original cover.
– Paid-up value pays after maturity or on death, along with bonus added till last active premium.
– No fresh bonuses will accrue after paid-up status.
– This choice gives some life cover and future payout without more payments.

» Surrendering the Policy: What to Expect
– Surrender gives you some money now, but it is less than premiums paid.
– Surrender value often is just 30-60% of total premiums paid, sometimes even less.
– All policy benefits, bonuses, and protection stop after surrender.
– Once surrendered, you get no death cover or maturity benefit at all.
– Money you get on surrender can be invested right away for growth.
– If surrender value is extremely low, loss can feel unfair and disappointing.

» Key Differences: Paid-Up vs Surrender
– Paid-up means waiting till maturity or death for payout, but coverage remains.
– Surrender means immediate cash, but you lose all policy benefits.
– Reduced paid-up is less payout but at least you do not exit with huge loss.
– Some policies let you wait for higher value at maturity than what you’d get from surrender.
– No more bonuses after going paid-up, but you retain whatever bonus is already attached.

» Evaluating Your Personal Situation
– At 61, term plan and health insurance are already in place, which protects dependents.
– You are self-sufficient and do not depend on the old plan benefits.
– If no urgent financial emergency, immediate cash from surrender may not be vital.
– If you can invest on your own, mutual fund SIPs offer better growth than leaving money in many LIC traditional plans.

» Why Not Surrender in Your Case
– Paid-up is a practical choice if surrender value is too low.
– You avoid booking a big loss by keeping it paid-up.
– For many policies, paid-up value at maturity is greater than what immediate surrender gives.
– Your decision to stop premiums and keep as paid-up is usually the most loss-minimising route.

» When Surrender Might Be Better
– If surrender value is close or equal to current paid-up value.
– If you urgently need liquidity now for a better investment or emergency.
– If growth from mutual funds would strongly outpace what a tiny maturity benefit would deliver years later.
– If policy is many years from maturity and the death cover is not required, sometimes surrender makes sense.

» Insights from Similar Cases
– Most traditional LIC plans penalise early exits, giving poor value if surrendered soon.
– Many people keep paid-up to avoid emotional loss and keep at least some benefit alive.
– Those who can utilise surrender amount for very high return growth might opt to surrender, but that is rare at your stage.

» Emotional Impact and Practical Factors
– Keeping the paid-up relieves premium payment stress.
– Seeing the policy remain may reduce emotional loss from ending it completely.
– Emotionally, keeping some link gives peace till maturity, especially for long-held policies.

» Combining with Mutual Fund Strategy
– Continue investing premiums previously paid to LIC in mutual funds.
– For next 5 to 8 years, mutual funds can help grow wealth much faster.
– Paid-up policy remains as a backup and bonus for the end of tenure.

» Tax Considerations and Timing
– Surrender may trigger a tax liability on profits if surrender value is more than premiums paid.
– Paid-up policy is usually tax-neutral till maturity, and benefits paid on maturity are often tax-free, based on Section 10(10D) rules (check your document or with a tax expert).

» Final Insights
– Your move to keep policy as paid-up and start investing in mutual funds is smart.
– Unless you must access money quickly, do not surrender at deep loss.
– If you do not need death cover, surrender can be checked only if value matches or has minimal gap with paid-up.
– Otherwise, let the policy quietly run its course.
– Use mutual funds to fill up any insurance or growth gap from now onward.
– Maintain your disciplined investment with hope and patience.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

Ans: Hi,

I am sorry but plans like this doesn't give much benefit and one should never opt for such plans.
It is better for you to surrender this policy now rather than dragging this loss for another 20 years.

You can easily get more returns in simple FD and more than double if you choose mutual funds investment.
Your exact maturity value will be told by LIC office but you will definitely lose more than 15% on what you have paid.

But on a brighter side, surrendering and reinvesting the same in mutual funds with minimum 12% return will vanish your losses in just 2-3 years.

Hence, practical approach is to close this policy.

Let me know if you need more help.

Best Regards,
Reetika Sharma, Certified Financial Planner
https://www.instagram.com/cfpreetika/

Ans: Hi Imran,

LIC policies are best known for their low returns of maximum 4-5% over the entire tenure. This return is even less than that of a FD.
But you have already paid premiums for 12 years - 5.88 lakhs; you will get only 4.6 lakhs back. This is the case with every LIC policy.

Whether to continue or surrender depends on your requirement.
- Continue if you are ok with such low returns.
- Surrender if you will reinvest the proceedings in equity mutual funds or if you need money.

Surrendering now will be a loss for you. But treinvesting the entire 4.6 lakhs into mutual funds along with quarterly SIP of 12.5k will give you 17.8 lakhs at the end of 8 years.
And this amount is more than total sum assured if you continue policies. Plus final values will compensate for the loss you will feel now.

Hence better to surrender and reroute those investments in high return generating instruments.

Let me know if you need more help.

Best Regards,
Reetika Sharma, Certified Financial Planner
https://www.instagram.com/cfpreetika/