Should I surrender my LIC policy or opt for paid up option
Life insurance policies have become the investment norm in today’s times. Salaried people as well as businessmen opt for multiple LIC policies thinking that they’re making right investment decision. Although there is a lot of financial security attached with these LIC policies, but still it may not turn out to be your best investment option. It’s hard to choose between totally withdrawing an LIC policy or choosing to get paid up for it. Both the options have their own pros and cons which have been discussed here.
What Should Be The Ideal Financial Decision- LIC Policy Withdrawal OR Paid Up Scheme? We will try to provide answer to this question and would ask our viewers to add or correct us.
About LIC Policy withdrawal and paid up system
If you opt for cash back for your LIC policy, then you would get money back from LIC. But in case of Paid up system, your policy won’t be withdrawn but the amount that you would receive on maturity would be decreased on the condition that you won’t have to make any further payment for LIC policy’s installments.
- If you opt for complete cash back then your security cover would be totally eliminated. In case of natural calamity or emergency, you won’t have the LIC backing.
- Upon complete discontinuation of LIC policy, you would be able to receive only partial money back. LIC will refund only 30-40% of your total invested money as per the rules.
- But the advantage of complete LIC policy withdrawal is that you would be saved from paying high instalments every month. You could opt for more profitable options like term based investment policies, mutual funds etc.
- The second option of paid up would be advantageous for those people who want to retain the security cover for their families.
- Also, the LIC would be give you 100% cash back for your investment upon the arrival of the pre decided maturity date of that LIC policy. This way you would be saved from losses.