Sir I have purchased 200000 sum assured for 35 years lic jeevan saral in year 2009 at that time my age was 38. Can I surrender the policy or should I continue the policy please suggest.

Ans: You're approaching your policy's maturity date in March 2026, and here are some options to consider for your SBI Life Retire Smart LP policy:

Understanding the Policy:

• Guaranteed Benefit: This policy guarantees 101% of your total paid premium on maturity. In your case, that's Rs 5,05,000 (1.01*Rs 5 lakh).
• Market Performance: The current fund value of Rs 5.70 lakh reflects how the units you invested in have performed in the market.

Decision Points at Maturity (March 2026):

• Surrender the Policy: You can receive the fund value (Rs 5.70 lakh) along with any guaranteed additions or terminal bonuses offered by SBI Life. However, check the policy documents for any surrender charges that might apply.
• Annuitise the Corpus: This option allows you to convert the total corpus (fund value + guaranteed additions) into a regular income stream through an annuity plan from SBI Life. This provides a guaranteed income but limits access to the principal amount.
• Continue the Policy (if allowed): Check with SBI Life if you have the option to extend the policy term. This allows the fund value to potentially grow further through market gains, but you'll continue paying premiums.

Choosing the Right Option:

Since I cannot give financial advice, here's how to make an informed decision:

• Review Policy Documents: Look for details on surrender charges, guaranteed additions, and the option to extend the policy.
• Contact SBI Life: Talk to your SBI Life advisor or customer care to understand the specific benefits and charges associated with each option.

Consider Your Needs:

• Retirement Income Needs: Do you need a guaranteed income stream (Annuity) or are you comfortable with some market risk for potentially higher returns (Continuing the Policy)?
• Other Retirement Savings: Do you have other sources of retirement income, like a pension or investments?
• Medical Needs: Factor in any potential medical expenses that might require a larger corpus.

Additional Tips:

• Market Performance: Consider the current market conditions. If the market is expected to perform well, continuing the policy might be beneficial.
• Risk Tolerance: How comfortable are you with market fluctuations? Annuities offer stability, while continuing the policy exposes you to market risks.

By carefully evaluating these factors and talking with SBI Life, you can make the best decision to secure your financial future in retirement.

Ans: Firstly, I commend your proactive approach in evaluating your financial decisions, especially regarding insurance policies like LIC Jeevan Arogya. It's essential to understand the implications of surrendering such policies.

Understanding LIC Jeevan Arogya
LIC Jeevan Arogya is a health insurance policy that provides coverage against hospitalization expenses. It offers benefits such as hospital cash benefits and surgical benefits, aiming to support your healthcare costs.

Considering Surrendering Your Policy
Surrender Value
Before surrendering your LIC Jeevan Arogya policy, it's crucial to check its surrender value. The surrender value is the amount you will receive if you decide to terminate the policy before its maturity.

Calculation Factors
The surrender value depends on various factors, including the premium paid, the policy's tenure, and any bonuses accrued. Typically, health insurance policies like LIC Jeevan Arogya do not accumulate cash value like traditional life insurance policies.

Potential Outcomes
Partial Surrender
Some insurance policies allow for partial surrender, where you can withdraw a portion of the accumulated value while keeping the policy active.

Policy Lapse
If you stop paying premiums without surrendering, the policy may lapse, and you may lose all benefits and the premiums paid.

Considerations Before Surrendering
Alternative Options
Before surrendering, consider if there are alternative options such as reducing coverage or modifying the policy to better suit your needs.

Financial Impact
Evaluate the financial impact of surrendering. Calculate the surrender value and compare it with the benefits received and future premium payments.

Health Coverage
Ensure you have adequate health coverage in place before surrendering. Health insurance is crucial for unexpected medical expenses.

Consulting a Certified Financial Planner
Expert Advice
A Certified Financial Planner (CFP) can provide personalized advice based on your specific situation. They can help you understand the surrender value and explore alternatives.

Long-Term Financial Goals
Consider how surrendering the policy aligns with your long-term financial goals. Redirecting funds to investments that offer better growth potential might be beneficial.

Final Insights
Surrendering an insurance policy like LIC Jeevan Arogya should be a well-thought-out decision. Assess the surrender value, understand the financial implications, and consider consulting a Certified Financial Planner to guide you through the process.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Surrendering an insurance policy is a major decision. You have consistently paid Rs 4083/- per month since 2012. This dedication shows your commitment to securing your future. Now, let's delve into the specifics of surrendering your policy and its implications.

Surrender Value and Its Components
The surrender value is the amount you get when you decide to discontinue your policy before its maturity. This amount includes two main components:

Guaranteed Surrender Value: This is a percentage of the premiums you have paid, minus the first year's premium and any bonuses you might have received.

Special Surrender Value: This is usually higher than the guaranteed surrender value. It takes into account factors like the duration of the policy and the total premiums paid.

Since you have been paying premiums for over a decade, you are likely to receive a special surrender value. This value reflects the time and money invested in the policy.

Evaluating Bonuses
Insurance policies often come with bonuses, which are additional amounts added to the sum assured. These bonuses can significantly impact the surrender value. However, understanding the exact bonus details can be challenging without specific policy documentation. Generally, bonuses accumulate annually and are declared by the insurance company based on their profits.

In your case, given the policy's tenure, there should be a notable bonus component. But, for precise information, it's essential to contact the insurance company directly or refer to your policy documents.

Analyzing Financial Goals
Surrendering a policy is not just about the immediate financial gain. It's crucial to align this decision with your long-term financial goals. Reflect on the reasons for surrendering the policy:

Immediate Financial Needs: If you have urgent financial requirements, surrendering the policy might provide quick funds.

Better Investment Opportunities: You might want to explore other investment avenues that offer higher returns.

Changing Financial Priorities: Your financial goals and priorities might have evolved over time.

Exploring Alternative Investments
Upon surrendering your policy, you might consider reinvesting the proceeds. Here are some options to consider:

Mutual Funds
Mutual funds offer a diverse range of investment opportunities. They are managed by professional fund managers who make investment decisions on your behalf. Here’s why mutual funds can be a good option:

Diversification: Mutual funds invest in a variety of assets, reducing risk.

Professional Management: Experienced fund managers handle your investments.

Liquidity: You can easily buy and sell mutual fund units, providing flexibility.

Potential for Higher Returns: Historically, mutual funds have offered higher returns compared to traditional savings instruments.

Systematic Investment Plans (SIPs)
SIPs are a disciplined way to invest in mutual funds. They allow you to invest a fixed amount regularly, ensuring you benefit from market fluctuations. This method can help you build a substantial corpus over time.

Debt Instruments
If you prefer lower risk, consider debt instruments like fixed deposits or government bonds. These options provide stability and predictable returns.

Equity Investments
For those comfortable with higher risk, equity investments can offer significant growth potential. Investing in stocks directly can be rewarding but requires careful analysis and monitoring.

Assessing Risks and Benefits
Every investment comes with its own set of risks and benefits. It’s important to evaluate these before making a decision:

Risk Tolerance: Understand your ability to withstand market fluctuations.

Time Horizon: Consider the duration you can keep your money invested.

Financial Goals: Align your investments with your long-term objectives.

Tax Implications: Different investments have varied tax treatments. Understand the tax benefits and liabilities associated with each option.

Consulting a Certified Financial Planner
To make an informed decision, it’s wise to consult a Certified Financial Planner (CFP). A CFP can provide personalized advice based on your financial situation and goals. They can help you:

Analyze Your Current Financial Position: Assess your income, expenses, and savings.

Set Realistic Goals: Define achievable financial objectives.

Create a Customized Investment Plan: Develop a strategy tailored to your needs.

Monitor and Adjust: Regularly review and adjust your plan to stay on track.


Your dedication to paying premiums for over a decade is commendable. This long-term commitment reflects your focus on financial security. When considering policy surrender, it's important to maintain this long-term perspective. Think about how your decisions today will impact your financial future.


We understand that navigating financial decisions can be challenging. It’s normal to feel uncertain about the best course of action. By gathering information and seeking professional advice, you’re taking the right steps toward making an informed decision.

Final Insights
Surrendering your insurance policy is a significant decision with various implications. It's essential to consider the surrender value, bonuses, and your long-term financial goals. Exploring alternative investments can provide opportunities for better returns and financial growth. Consulting a Certified Financial Planner can offer valuable guidance tailored to your needs. Remember to maintain a long-term perspective and make decisions that align with your financial objectives.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

Ans: Some insurance companies even charge penalty similar to what is levied during policy surrender, for paid up policies.

Suggest you check that aspect with LIC.

If they are charging then it is better to surrender and exit.

If they are not charging then you may retain them as paid up policies and divert the policy premium amount to investment in mutual funds.

*Investments in mutual funds are subject to market risks. Please read all scheme related documents carefully before investing