LIC Policy Surrender vs Paid-up – Which is Better?

Surrender vs Paid-up – Understanding the Difference

Surrender: You exit the policy completely. Get lump sum (heavily discounted). Policy ends.

Paid-up: Stop paying premiums. Policy continues with reduced SA (Paid-up SA = Original SA × premiums paid / total premiums payable). Get paid-up SA + bonus at maturity. No more premium payment needed.

When Paid-up is Better: When you have 5+ years remaining to maturity. Paid-up value is usually higher than surrender value.