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Disadvantages Of LIC Policy Surrendering: In emergencies, life insurance provides immediate financial security. In case of the sudden death of the breadwinner (policyholder), the life insurance policy provides financial support to the family members dependent on him. However, a life insurance policy is a long-term plan. In some cases, the policyholder may not be able to pay the premium. Due to financial challenges, he may decide that he cannot continue the policy. Or, he may need money urgently. In such situations, many policyholders surrender their life insurance policies before maturity.

Many disadvantages to surrendering the policy
Surrendering the policy immediately gets money in the bank account of the policyholder. Thereby, the relationship between the police and him is severed. From there, he does not have to pay the premium. But, there are disadvantages in such cases too. When the policy is surrendered, the policyholder has to lose a lot of the money he has paid. The insurance company does not return the entire amount paid by him in the form of a premium. You will also lose out on other benefits at maturity.

Payment after deducting the surrender value
Surrendering the policy means you are voluntarily removing the financial security cover for your family. After surrendering the policy, you/your family will lose the benefits like deposit + bonus on policy maturity. The insurance company will return the remaining amount after deducting the surrender value, which is much less. If the policyholder dies after surrendering the policy, the nominee will not get the death benefit. Moreover, you can also claim income tax exemption as long as the life insurance policy is continued. If you surrender the policy, this benefit will also be lost. In any case, surrendering a life insurance policy does not result in a loss but a gain. Therefore, it is better to think twice before deciding to surrender a life policy.

What is the surrender value?
Typically, the surrender value is 30 per cent of the total premium paid so far. The surrender value may vary depending on the period of policy maintenance and the insurance company's rules. The surrender value is 'zero' for insurance policies of more than ten years.
Alternatives to Policy Surrender
There are other ways to overcome financial challenges without having to surrender a life insurance policy. Instead of surrendering the insurance company, the policyholder can take a loan from the same company. This facility is offered by Life Insurance Corporation (LIC). If the policyholder has money, he can repay the loan or there is no need to pay. If the loan is not paid... when the policy matures, the insurance companies will deduct the loan + interest on it and transfer the remaining money to the policyholder's bank account. This means that by doing this, not only will the financial loss be reduced, but the benefits that come with the policy maturity will also not be missed.