How to Surrender and Close Your LIC Jeevan Anand Life Insurance Policy?

by Vinaya HS on January 18, 2011

in Finance

Thanks for visiting Capital Advisor. I frequently update this blog to cover various topics on personal finance such as investment strategies, financial products that you should buy and ones that you really should stay away from, financial calculators, emerging themes such as early retirement and financial independence, and much more. You can Subscribe through Email and receive new articles directly in your Inbox or you can Subscribe through the RSS Feed and receive new articles in your feed reader.

This post should actually be titled “How I Made LIC Richer by Rs 90,000?”

First, a background on how this Jeevan Anand policy came into my life. :-)

Towards the end of 2004 and in my early twenties, when I was at the peak of committing one financial mistake after the other (taking loans from my employer, charging my credit cards to shop for things that I really didn’t need, failing to save a rupee, etc.), I bought a LIC Jeevan Anand life insurance policy simply to avoid paying income-tax. This policy required me to pay Rs 25,000 each year for 20 years for a life insurance cover of Rs 500,000. I somehow paid the premium for 3 years (2005, 2006, and 2007) and then stopped because it was exactly at that time when I started educating myself about personal finance and discovered the existence of term-plans. Since the policy was now surrender-worthy, I decided to go ahead and surrender it for whatever it was worth.

However, for one reason or the other, I kept putting off surrendering this policy (even after hearing from LIC that I’d need to surrender and close this lapsed policy before I could apply for a term-plan with them). Now, having recently made this resolution, I finally went ahead and surrendered the policy. The lady at the counter informed me that with accrued bonus the value of the policy now stood at Rs 140,000 but if I surrendered the policy I’d only get a far far lesser amount of Rs 50,000. I was indeed tempted for a moment to have the policy revived but I stood by my decision (and my resolution) and asked for the policy to be closed.

So there you go. I paid Rs 25,000 each year for 3 years, am only getting back Rs 50,000 after 6 years, while LIC pockets a cool Rs 90,000 at my expense. And I write a blog on personal finance!

That apart, I thought I’d share with you the procedure for closing such a policy (it’s somewhat similar to what you’ve read before on closing your unit linked life insurance policy).

Procedure to surrender and close your LIC Jeevan Anand Policy.

  • Get the documents listed below into one file:

    1. Original life insurance policy document.
    2. Original premium payment receipts.
    3. Download this surrender request letter, fill-in your specific details, and print a copy.
    4. Get a copy of the S.V. Application and Form No. 3510/5074 either from your agent or from a nearby LIC office and fill it up.
    5. Photocopies of #1 and #2 above.

  • Staple together the filled-up surrender request letter, original life insurance policy document, photocopy of premium paid receipts, S.V. Application and Form No. 3510/5074 in that order. Let’s call this as our “Submission Packet.” This set of documents is what you’ll need to submit at the LIC Branch Office from where your policy was issued (you cannot submit them at any other branch office).

  • Staple together the photocopy of the policy document and original premium paid receipts. Let’s call this as our “Reference Packet.”

  • Go to the branch office from where your policy was issued and handover the “Submission Packet” at the counter. Once your policy details are verified, the person at the counter will print and sign an acknowledgment receipt. Verify the details on this receipt and attach it to your “Reference Packet.”

  • Wait for the check to reach you by post.

  • Once the check arrives, verify your name and account number for correctness and take a photocopy. Attach this photocopy to your “Reference Packet.”

  • Deposit the check at your bank.

  • Once the check is credited to your account, tear-up your “Reference Packet” if you feel like doing so.

I did. Here’s pictorial evidence.


It’s now time to execute the next steps of my strategy.

Thanks for reading this article. I'd love to hear your opinion. Please use the comments section below to share your thoughts. I frequently write new articles that also cover several other aspects of personal finance including credit cards, financial goals, health insurance, income tax, life insurance, mutual funds, retirement planning, and much more. You can Subscribe through Email and receive new articles directly in your Inbox or you can Subscribe through the RSS Feed and receive new articles in your feed reader.

{ 127 comments… read them below or add one }

TOLENTINO January 26, 2012 at 3:43 PM

Thanks for sharing such good ideas…..

I paid 69,000RS for 3 years and now I am going to surrender the insurance policy but the insurance agent say that I will only receive 1,74000RS does any can tell me why they are going to deduct 33,000RS?
Is it true or is the agent is going to pocket some money? Please reply

Nair March 6, 2012 at 9:40 PM

I too did a financial mistake in my early twenties,when i got my job – Took Jeevan Anand of 8 lakhs(5+3 from 2 “different relatives-agents”!!!) I was not even knowing what does premium mean !!!
I quit my job after 2years and jobless ever since.. But still I am paying the premiums,from the savings i had in my bank account+father’s help .NOw its 5years and I am planning to make it “paid up “.I dont want to make a single payment more ..What is your suggestion??Is it better than surrendering ??so that i may not lose what i paid –i dont want bonus or interest-i only need what i paid from my hand ..
Please help

Nair March 6, 2012 at 9:53 PM

N.B . I paid a total of Rs.166460 in last 5 years..!!!!
“LIC sucks ..its a trap for 25 years…

paranthaman March 16, 2012 at 10:12 AM


Not just LIC. Every insurance company is cheating the living people to compensate the losses incurred by dead.

I started a money back policy 5 years ago. now, i’m diagnoised with cancer. when i approach the lic office for closure, they told me talk to my agent. my agent is has relocated to some other city. With failed health , my chances of closing LIC is closed.
I feel cheated.

Reality Check March 18, 2012 at 6:35 PM

Tell me who would have profited if you died in those three years!!! Food for thought

Anti-ULIP April 17, 2012 at 9:01 AM

Do not fool people.Food for thought my foot !
If someone would have taken term insurance he would have got himself insured for a much larger amount than what the Jeevan anand policy gives.Even if you die, your family will not be able to survive on jeevan anand policy sum assured I can bet you on this.

Blood-sucking policies giving 4-5% returns,it’s hell.

Vinaya H S April 17, 2012 at 9:19 AM

@Anti-ULIP –

Ha ha ha. Well said. :-)

Amit Jain April 18, 2012 at 11:21 AM

One of the main reason is that, on surrendering the policy, LIC deducts the full amount of first year premium. Also, the premiums for other years, starting from second year, are returned with some deduction based on number of premiums paid

Ravi April 26, 2012 at 4:15 PM

Thank you. I have surrendered my policy. Now waiting for the cheque

Beware April 27, 2012 at 1:33 PM

I surrendered my LIC Jeevan Anand policy.
Invested = Rs.1,68,000
Got back after surrender = Rs. 85,000 !!!! (This is daylight loot nothing else).After 5 years my money is halved !

Nair April 27, 2012 at 7:22 PM

I didnt surrender, I made it ‘paid-up’…Nothing to do -just dont pay the premiums any more , After your plan term,(mine is 20 yeras!!!) you will get back what you bonus,no coverage …165000 in 2032!!!!

Beware April 28, 2012 at 1:27 PM

Please do some calculation….LIC will still loot you even if you have made it “paid-up”.

1. Case I – Make it “paid up” and get Rs.165000 in 2032. Plus peanut amount of life cover.
2.Case II – Make it “Surrender” and get Rs.85000 now in 2012 Then keep it in bank FD for 20 years and get Rs.4,12,000 (4 lakh 12 thousands) in 2032 at 8% interest.

Now decide which is better !

Nair April 28, 2012 at 6:16 PM

Thanks for the idea..,I didnt think about it this way…I only thought of losing my hard earned 80,000/-
I wanted to get back atleast what I paid,Thats why I made it paid up..

Beware April 30, 2012 at 9:35 AM

The point is you are not losing it, you have already lost it the moment you took the policy. If you keep Rs.80k with them they’ll eat the interest for next 20 years,so better surrender and you take your principal and interest both :-)

nagaraj 9840047520 May 1, 2012 at 8:02 AM

dear friends,
iam from chennai lic cheife insurance advisor.
pls understand the financial t pyramid, what says keep some amount in long term fixed investments. For longer targets LIC plans + PPF .Imediate security is term plan .so you invest in Lic plans long term goal, for example you plan 2 crores in age 58. you save through mf 1 crore and Lic plans 1 crore . some time you may surrender the mf amount, but you keep Lic plans long term.
in case your mf balance 0 to 1 crore but lic plans give you 1 crore.
thank you, any clarification pls mail me.

nagaraj 9840047520 May 1, 2012 at 8:05 AM

term plan is additional cover, but pls donot surrender jeevan anand and take term policy.

Ask Questions May 2, 2012 at 10:31 AM

Do not misguide people.Tell me what % returns LIC jeevan anand gives ?? 4-5% ?

Sachin May 18, 2012 at 4:37 PM

Thanks Nagraj,

I am also feeling & struggling about the same thing.
Pl. let know how I will be benificial, if I will continue my Jevan Anand policy started on Jan’2010 with yerly 26000/- premium as compare to the term plan.

Manoj Bobade May 29, 2012 at 7:44 PM

Hi, Can someone tell is there any procedure of surrendering the Term policy ?
I have taken a term policy from LIC in 2008 and now I want to move to another Insurance company as it is offering me lesser premium on a bigger sum assured.

Kindly guide me whether I should surrender or just let it lapse as the policy will not have any surrender value.

Ravi May 29, 2012 at 7:56 PM

Dear Manoj, Not even necessary to think twice. Just surrender. Take out what ever u get and get out of LIC and take a term insurance.

Even in case you do not get a single rupee paying another premium is waste of money.

Procedure is available on this website. Check it out

JK May 30, 2012 at 8:08 AM


Have a question about the infamous Jeevan Anand policy which I took in my ignorance 6 years ago. It has lapsed as i have not made payments for the last financial year. I now want to surrender the policy, but have a question…. Would it be better to revive the policy before surrendering it (paying an additional year’s premiums out of which LIC would return only 30%), or just go ahead without reviving it (seems the better option to me)?

Advise please. Thanks and kudos for maintaining a superb educational website!!


Ravi May 30, 2012 at 8:17 AM

Hi JK, Not necessary to revive.

Chanaveer June 9, 2012 at 12:38 PM


I have following queries regarding surrendering LIC Jeevan Anand policy:
1. In Form 5074, who should sign for “Signature of Assignee”. Is this the nominee?
2. Again, in Form 5074, there is a signature field below Revenue stamp, next to witness details. Its not clear who should sign this. Is it witness?
3. In S.V.APPLICATION form, what should I fill for “Name and Address of the paying Authority, Designation, Present Badge No. & Dept. No.”?

Chanaveer K

SAtish June 22, 2012 at 12:12 PM


I am about to surrender a bunch of LIC policies.
Original premium payment receipts are mandatory for this? I may not have original receipts with me.


Vinaya HS June 22, 2012 at 12:48 PM

@Satish –

That should be OK. You can go ahead and surrender since LIC would already have a record of all your premium payments on their system.

Vinaya HS June 23, 2012 at 9:27 AM

@Chanaveer –

1. Assignee is not the same as nominee. Unless you’ve pledged the policy to someone else for say taking a loan from them, the assignee would not be applicable at all.

2. Signature below space for stamp is your signature. Witness signature would be done in the same space where witness details are entered.

3. No need to fill these details. LIC Office would do that.

sheena July 6, 2012 at 10:36 PM

I too have made a mistake in taking this policy (21 yrs, 5 lakhs) from a relative.
I’ve paid first premium amount of Rs. 25000/- in April 2012
Please suggest what should be done now? Can I surrender this policy now?

Vinaya HS July 9, 2012 at 6:26 PM

@sheena –

Quite an unfortunate situation. There’s nothing you can do now since even the free look-in period is over. Better to treat the 25k as a sunk cost and forget about it.

Balaji July 10, 2012 at 1:24 AM

Hi Vinaya,
I have taken a Jeevan Anand policy in July 2010. Until now, paid premium quarterly for 2 years (approx 72k). Sum Assured is 5 Lakhs, 16 yr term, premium per quarter is Rs 9181.
I realised after 1 year that this policy is neither serving fully serving my insurance needs nor investment purpose. Wanted to discontinue after 1 yr but family members suggested to continue the premiums, otherwise we’ll lose the 1st yr premium amount (approx 36k). I thought of making it a ‘paid-up’ policy after paying premiums for 3 years.

(1) In my case, Surrender OR paid-up after 3 years, which is the best option.

(2) If I make it paid up, Will I get the bonus component along with the reduced sum-assured at the end of the Jeevan Anand policy term.

Appreciate your suggestion. Thanks.


Vinaya HS July 10, 2012 at 2:46 PM

@Balaji –

You will need to verify these calculations once with the local LIC office but here’s what I’m thinking –

1. Surrender now. Payback = 0. Insurance = 0. Loss = 72k.

2. Surrender next year. Payback = 30% x 72k = 21.6k. Insurance = 0. Loss = 86.4k.

3. Make paid-up next year. Payback = 0. Reduced insurance = 94k. Loss = 108k.

Tough choice to make. I’d opt for either #1 or #3.

But please verify these calculations with the LIC office once. Would be great if you can update us here.

Balaji July 10, 2012 at 6:47 PM

hi Vinaya,
Thanks for your suggestion. In point 3, the loss should be approx 16k. how did you arrive at 108k. pls clarify. Will update once I get the actual calculations.


Vinaya HS July 10, 2012 at 11:17 PM

@Balaji –

Why I put the loss at 108k (36k x 3 years) is because your investment is immediate (and a sunk cost) but you probably wouldn’t see the final policy pay out happening until the original policy term is completed or you’re no more (in which case any of these wouldn’t really matter to you!).

Balaji July 11, 2012 at 1:04 AM

thanks Vinaya :)

santosh jadhav July 15, 2012 at 8:40 AM

I have taken jivan Tarang policy with pre premium of 13744.I had paid total seven yearly premium.I want to surendar the policy what is the amount I get after surrend

Ashish Kumar July 15, 2012 at 11:06 AM

This is so stupid to surrender your policy and then complain that my money got halved. I am not a supporter of LIC but you should look to Jeevan Anand from a long term perspective. It is a kind of policy that would give u money when u r old and u need it the most. Who knows the money u SAVED (mark my word – not invested) in Jeevan Anand, u might have ended up buying a fancy bike or a cool iPhone or probably a costly Laptop.

Its about building your portfolio. U have to keep your portfolio diversified. LIC could be a part of it. You cannot invest all your money in equities / mutual funds and be at the mercy of volatile markets.

SAY NO TO-ULIPs July 16, 2012 at 11:26 AM

@Asish Kumar,
It is plain stupid to believe that any LIC is going to support you at your old age.The fact is they’ll milk your money and take away majority of the interest and handover the leftovers to you when you are old.If you don’t invest in LIC then you can keep the money in some liquid fund or PPF or post office MIS I bet you will get much better returns than that of LIC which gives 5-6% pa.Please do some calculation and find out.

Vinaya H S July 16, 2012 at 12:43 PM


You beat me to it. :-)

Also, if I had to make a choice, I’d rather burn my money on an iPhone/Laptop and enjoy my “today” rather than buying Jeevan Anand and not enjoying my “any day”.

What say?

Anonymous July 16, 2012 at 1:58 PM

@ SAY NO TO-ULIPs > Sir I have done my analysis. I know the returns turn out to be 6-7% . But the thing is u cannot invest whole amount in PPF or keep it liquid and earn 3-4%. What my perception is you have a diversified portfolio and having one LIC policy does you no harm.

@Vinaya H S > Sir no one is stopping you. Go ahead any buy the latest iPhone5 which will be launched in sometime at 55000. Next year the same iPhone5 will be outdated and you will sell it for 20000.

SAY NO TO-ULIPs July 17, 2012 at 9:41 AM

This very phrase ‘having one LIC/ULIP policy does you no harm’ has looted many investors already,so please stop advertising it.ULIPs are worst and LIC is worst among the worst.Diversified portfolio should actually have : 1. Mutual Funds 2.Equities 3.Gold funds 4.PPF 5.Post office MIS 6.Liquid funds(they give 8% plus returns) 7.Fixed deposits in banks.

Well my dear that’s what we call DIVERSIFICATION OF FUNDS.Now stop fooling people who are not smart enough to avoid LIC touts.People must learn to say a firm “NO” to LIC looters.It will indeed do YOU A LOT OF HARM.It is not HARMLESS,it is very much HARMFUL and you will need a smart brain to detect its harmfulness.

goodfundadvisor August 27, 2012 at 8:02 PM

f you take Anmol Jeevan life insurance term policy of Rs 20 Lakh coverage for 20 year, and your age is 27 year, you need to pay premium of around yearly Rs 5500 only.

But if you take Jeevan Anand plan of Rs 20 Lakh coverage for 20 year, and your age is 27 year, your yearly premium will be around Rs 1 lakh. After 20 year you will receive Rs 20 lakh on total investment of around Rs 20 Lakh. So there is almost no gain.

Suppose you have Rs 30,000 per year amount to invest, if you take Anmol Jeevan life insurance plan (term policy), you have to pay Rs 5500 per year for Rs 20 Lakh coverage. If you invest rest of money i.e Rs 24500 in equity per year, and if you assume minimum 15% return from equity market, you final return after 20 year will be Rs 28 lakh.

So using 2nd method, by Rs 30,000 per year you can get 20 lakh life insurance coverage and return of Rs 28 lakh after 20 year, The best thing is, you can use your invested money in equity at any time in emergency

Ranjit Singh Shekhawat October 8, 2012 at 12:12 PM

I took a LIC policy named Jeevan Surbhi of SA of 4 Lacs in Feb,2009. Total premium pay upto Feb,2013 will be Rs. 122592/- using premium of Rs 15324/- every six month.
Total premium pay term is 18 Years. In year 2013 I’l get 20% of SA (4Lacs) = Rs. 80k. ( according to Table # 108).
Should I surrender this policy after getting this Rs. 80,000 amount or before.
What will be the surrender value in both cases.

Pl Help ..

manisha bisht October 19, 2012 at 5:41 PM

Term plan is the mother of insurance…….only it is meaningful…..others are a bluff…if one wants his financial protection go for a term plan…and if you want to grow your money there are much good opportunities outside insurance…..these companies only make a picture as if there is nothing smart except insurance……

Shankar Anand October 29, 2012 at 2:58 PM

I took a 20 yr Jeevan Rekha policy with sum assured 5 lacs in Sep 2003. I have paid half yearly premium of Rs.10,822 till Mar 2012. Hence total premiums paid till date is Rs.1,94,796/-. Bonus accrued till date is Rs. 1,54,500/-.

My surrender value as on date is Rs. 98,500/-.

If I take the surrender value of Rs.98,500/- today and invest somewhere with 10% compound interest p.a., I will get Rs.2,81,032/- in 2023.

If I make the policy paid up now, in 2023 I expect to get prorated sum assured + bonus accrued till now = (9/20) * 500000 + 154500 = Rs.3,79,500/-

Hence, I think making the policy paid up is better. Can you confirm if I am correct?

Similarly I took a 25 yr Jeevan Anand policy with sum assured 9 lacs in Sep 2003. I have paid half yearly premium of Rs.18,772 till Mar 2012. Hence total premiums paid till date is Rs.3,37,896/-. Bonus accrued till date is Rs. 3,38,400/-.

My surrender value as on date is Rs. 2,34,700/-.

If I take the surrender value of Rs.2,34,700/- today and invest somewhere with 10% compound interest p.a., I will get Rs.6,69,626/- in 2023.

If I make the policy paid up, in 2023 I expect to get prorated sum assured + bonus accrued till now = (9/25) * 900000 + 338400 = Rs.6,62,400/-

Hence, I think making the policy paid up is better. Can you confirm if I am correct?

Ravi October 31, 2012 at 11:05 AM

Hi Ashish,

I agree with your views and hope the guys who are discussing the negative parts of LIC are not aware of the policies of other insurance company too.
But here you missed to add one more thing to open the eyes of these guys who are just here to blame the LIC.


pls try to think logically, rather then instant thinking and coming to conclusion.
First you shd understand why you took Jeevan Anand… or any other policy.
You indicate that it was better if you have invested money some where else apart from LIC jeevan anand or purchased costly laptop or fancy bike whatever..
Can you pls tell me if Mr X has invested money25000, somewhere else and unfortunately he passed away, then in that case what was the value of that money in 1,2,3 yrs…??
How much his family can make of this money …??
If this was invested in LIC Jeevan Anand -[LIC Premium - 25000 yearly and SA 5 Lakhs]
Nominee will get the SA amount as compansation. Even if he had paid 1 premium or 2 or 3…!!

So the purpose of Investment OR LICs [savings + Risk cover] are different.
So pls stop misguiding people.

If you have any queries you can reach me at

Ravi October 31, 2012 at 2:02 PM

One more example for all of those who want to surrender their policy –
If you are just looking for investment rather then risk cover then surely you shd go for other options if you dont know these features and benefits.

Ex : Mr PANDE takes lic;s Jeevan Anand for 21 yrs n S A is 10 lakh unfortunet Mr Pande is dies in 2nd yr . Premium 50,000/- PA


and WHAT will RETUNE IN M.Funds ?

My ans is lic gives

10,00000 S A

and wht will retune in ur any m .f ?

ans = 3000 per month * 24 month =72000

if nav is up m f gives 80000 or 85000 only

and nav will down give 50000 to 60000 Rs only

Dear so called experts – PLZ dont give wrong advice abt INSURANCE plans.

Srikanth Matrubai October 31, 2012 at 3:20 PM

Hi Ravi,
No Financial Planner in his true wisdom will advise you to go for Mutual Funds alone.
What, we planners are telling you is, go for a Term Plan, and the amount which you have saved from the difference of Jeevan Anand and the Term Plan should be invested in Mutual Funds.
Please do not jump to conclusions without proper analyses.
You are making a fool of yourself.

Vinaya H S November 1, 2012 at 2:37 PM

@Shankar Anand –

Did you get these figures (i.e. surrender values, accrued bonus, etc.) from the LIC Office?

Shankar Anand November 1, 2012 at 2:39 PM

@Vinaya Yes

Shankar Anand November 1, 2012 at 3:34 PM

Looks like I made a mistake in calculating the returns of my 2nd policy (Jeevan Anand).

Since it is a 25 year policy, I will get the returns only in 2028.

Hence if I make it paid up, I will get Rs.6,62,400/- in 2028.

If I surrender the policy and get Rs.2,34,700 now and invest somewhere with 10% compound interest, I will get Rs.10,78,400/- in 2028.

So, for my 2nd policy surrendering it now seems to be better. But for my Jeevan Rekha policy making it paid up seems to be better.

@Vinaya: Can you help me and confirm if my calculations are OK?

Previous post:

Next post: