When you purchase a LIC policy, you will pay your policy premium regularly. But in some cases, you might be in a financial crisis or you may feel that you need not continue the policy as you have life insurance cover from some other insurance products. In such cases, if you had decided not to pay any premium further, you shall stop paying the premium to your policy.
Now you have 2 options:
1. If your policy has completed 3 years and if you have paid 3 full year premium to your policy, you shall surrender your policy and take back the surrender value that you would receive. Please check here for the estimated surrender value of your LIC policy. In some cases, you might lose even the premium that you have paid to your policy while surrendering. ie., the surrender value of your policy would be lesser that the total premium you have paid to your policy till date. If you have not completed paying the 3 full year premium of your policy, you will not be able to surrender your policy.
2. If you have paid 3 full years premium, and you wish to discontinue your policy, you shall not necessarily surrender your policy and take back the surrender value. Rather, you shall also leave the policy without surrendering it so that the policy becomes a paid up policy. In a paid up life insurance policy, the life insurance will cease. Only the investment part of the policy will be returned along with the accured bonus at the end of the policy term. Consider if you have taken a policy with 15 years policy term and you have paid the premium for your policy only for the first 5 years. If you discontinue to pay the premium, your policy will be converted into a paid up policy. At the end of the 15 years, you will receive the premium paid with the bonus accured in these 5 years.
If you would like to revive a lapsed policy, check here.