If you want to surrender a life insurance policy, then know these things, you will remain in profit

IF YOU WANT TO SURRENDER A Life Insurance POLICY, THEN KNOW THESE THINGS, YOU WILL REMAIN IN PROFIT

If you want to surrender a <b>Life Insurance</b> policy, then know these things, you will remain in profit
If you want to surrender a Life Insurance policy, then know these things, you will remain in profit

You will get more benefits by surrendering the traditional plan and investing the premium in equity funds. It is another matter that the premium paid in it will definitely be lost. Let's say that a 30-year-old man buys four 20-year endowment plans. Each of these gets a cover of 3 lakh rupees. For these, he will pay 60,000 rupees as premium in a year.

If you want to surrender a <b>Life Insurance</b> policy, then know these things, you will remain in profit
If you want to surrender a Life Insurance policy, then know these things, you will remain in profit

First case: Let's say that you surrender the policy before three years. In this, the premium is paid for two years.

Loss of premium: Rs. 1.2 lakhs,
at the rate of 6 percent, the amount to be paid after the policy matures: Rs. 20.29 lakhs
Amount to be paid for applying 60,000 rupees in equity for 12 years at the rate of 12%: Rs.35.25 lakhs, despite the loss of premium, the amount earned in 18 years: Rs. 34.04 lakhs

Second case: Policy is surrendered on payment of 5 years premium

Loss of premium: Total amount of premium paid (Rs 3.6 lakh) - Surrender Value * = Rs 3.08 Lakh The

policy is run for the entire duration at 6% Amount to be paid on maturity of Rs. 20.29 Lakh: Rs 60,000 in equity at the rate of 12% for 15 years. Rs. 23.57 Lakh Amount earned in 15 years despite loss of premium: Rs. 20.49 Lakh.
* There may be a slight change in the actual surrender value.

If you do not know what will happen when you surrender the policy, then see the answers to these questions:

What is surrender value? 

In the case of Life Insurance, you get back some part of the amount paid as a premium when you surrender the policy before running it for the entire duration. Charges are deducted in it. This amount is called surrender value.
If you want to surrender a <b>Life Insurance</b> policy, then know these things, you will remain in profit
If you want to surrender a Life Insurance policy, then know these things, you will remain in profit

Will I get surrender value on all Life Insurance policies? 

No. Surrender value is refunded only in those policies in which insurance also has a share of the investment. Therefore, there will be no surrender value in the pure term plan. At the same time, traditional plans like endowment, moneyback and ULIP have surrender value.

What is the surrender value when you stop paying premium?

No. You will get a part of your money only if you have paid the premium continuously for two years. (If the period of premium payment is less than 10 years). This has been done for three years if the premium payment period is more than 10 years. If you surrender the policy earlier, then you do not get any money back.

Can insurance be stopped by paying premiums? 

Yes You can change the policy to a paid-up policy. However, this option opens only after paying the premium for 2/3 years. In this way, the cover continues till maturity even if the premium is stopped. In this case the size of the cover will be reduced and will be in proportion to the premium paid. This sum insured is called paid up value. 
It is calculated based on the formula stated below :-
Paidup value = Basic Sum Assured x (Number of premiums paid / Number of premiums payable)

How much money do you get back in ULIPs?

Before lock-in period: If you stop paying the premium before five years, the policy will expire. After deducting some charges, the remaining fund value is sent to the discontinuation fund. Here you get 3.5 percent interest on it. After five years, the amount is returned.

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