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:
- Original life insurance policy document.
- Original premium payment receipts.
- Download this surrender request letter, fill-in your specific details, and print a copy.
- 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.
- 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.