Jeevan Anand Surrender or Paid up, what to do? This is one of the common query I have received in last few months.
Lic jeevan anand plan is the most selling insurance policy for life insurance corporation of India from a long time.
After various changes in IRDA rules, LIC has relaunched old Jeevan ananad in the name of New Jeevan Anand policy. The key features of this new Jeevan Anand remains almost same, without providing much life cover and long term return.
Many people started realizing the facts about these LIC policies and now looking to come out of that. But got confused whether to surrender the policy or paid up. If you are searching for jeevan anand surrender value after 5 years or similar terms and found this page, then I will help you to decide whether to surrender or paid up your jeevan anand plan.
Jeevan Anand Surrender or Paid up
To understand the situation and decide which one will be good we will consider few basic questions mostly asked.
Can I surrender lic jeevan anand policy before 3 years?
As per policy rule, one can’t surrender jeevan anand plan before 3 years of premium payment. That means if you surrender this plan after 2 years of premium payment then you will not get any money back.
Can I surrender value of jeevan anand after 3 years?
In that case as per policy rule you will get some surrender value. The surrender value calculation of Jeevan anand plan as follows = 30% of paid premium after excluding 1st year premium. E.g. if your yearly premium is 20,000 and you have paid 3 premiums, t.e. 60,000 your surrender value will be 30% of ( 60,000 – 20,000 ) = 30% of 40,000 = 12,000 only.
Jeevan anand paid up before 3 years
This is not possible. To paid up jeevan anand policy, one have to continue premium paying for minimum 3 years.
Lic jeevan anand paid up value after 3 years
Yes, you can paid up your jeevan anand plan instead of surrendering. Considering the above example, if you surrender jeevan anand plan after 3 years, then you may loose 60,000 – 12,000 = 48,000. But if you paid up your Jeevan anad plan then you may save this 48,000 amount. But you entire policy benefit will be ceased at that point and maturity value will be prorate basis as per premium paid.
I have paid 1 premium, should I surrender or paid up?
I think you have only one option left, that is discontinue the policy by not paying further premiums. As per rule you can’t paid up or surrender jeevan anand plan. So better to forget about the paid premium and bear the loss to save further loss.
I have paid 2 premium, should I pay 1 more premium and paid up the plan?
Again you can forget your premium paid and invest money in other investment tool. We will take an example here. E.g. your premium is 20,000 and we have seen that if you pay 1 more premium, your surrender value will be 12,000 (after paying total 60,000).
But if you stop paying premium now, your loss will be 40,000 (2 premiums) but after 3rd premium the loss will be 60,000 – 12,000 = 48,000. So surrender is not the option.
Now if you paid up the policy after paying 3rd premium, then your 60,000 money will be with LIC for entire policy term and on maturity it will earn a very less bonus.
In other way if you bear the loss of 40,000 and invest further 20,000 of 3rd premium in mutual fund or any investment for a period of more than 15 years, the actual yield will be more than this.
So as per calculation it is better to accept loss and continue with other investment options, but you have to do the calculation properly as per investment options you are going to choose.
Finally, what to do : Jeevan Anand Surrender or Paid up
If you have paid more premiums e.g. more than 5 years or more than 8 years then you have to stop for a while. In a 15 years policy if you have paid 8 premiums and realized the mistake of investment, then it is better to paid up the policy rather than surrender.
If you are an aggressive investor or can take more risk then you can surrender jeevan anand plan and take out the money in invest in equity for better returns. But even though you surrender the plan, it will take around 1 year to get the surrender value back to your account.
Don’t Miss Best term insurance policy in India
Don’t just buy any insurance plan as per your friend’s or agent’s recommendation. Check out the policy benefits and after purchase clause, mainly paid up and surrender value. Otherwise you might be trapped in future and feel like there is no way to come out.
And even after realizing if you don’t come out at proper time, then you may dig further lose. In a single line, stay away from any insurance with savings plan in future.
So, what is your take away from this “Jeevan Anand Surrender or Paid up” debate?