How to Surrender LIC Policy Online 2026
When Can You Surrender?
After 3 full years of premiums paid (policy must have surrender value).
Surrender Value Calculation
| Policy Year | Surrender Value Factor |
|---|---|
| Year 3 | 30% of premiums paid |
| Year 4-5 | 50% |
| Year 6-7 | 65% |
| Year 8-9 | 75% |
| Year 10+ | 90% + bonuses |
**Example:** Rs. 50,000/year premium, paid for 5 years = Rs. 2,50,000. Surrender value at 50% = Rs. 1,25,000 (you lose Rs. 1,25,000).
Online Process
- Log in to LIC Customer Portal
- Service Requests > Policy Surrender
- Visit home branch with original bond
- Receive payment in 7-15 days via NEFT
Tax Implications
- Premium above Rs. 2,50,000/year: Surrender value is taxable
- Premium below Rs. 2,50,000: Tax-exempt under Section 10(10D)
- TDS of 5% if surrender value exceeds Rs. 1 lakh
Better Alternatives
- **Make policy paid-up** -- stop premiums, keep reduced cover
- **Policy loan** -- borrow up to 90% of surrender value at 9-10.5%
- **Revival** -- if lapsed, revive instead of surrendering
**Talk to our experts before surrendering:** [Free consultation](https://insurancesupport.online/contact).
HK
Hari Kotian
IRDAI Certified Insurance Advisor | 25+ Years Experience
IRDAI Reg No: 0149161D. Helping families across Bengaluru and India with insurance advisory, claim recovery, and policy optimization since 1998.
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