Paid-Up Value in LIC Policy: What It Means and How to Calculate

When you stop paying LIC premiums after completing at least 3 years, your policy does not automatically lapse - it converts to **paid-up status**. This is one of LIC's most misunderstood but important features.

## What is Paid-Up Status?

A paid-up policy is one where: - You have stopped paying premiums - But the policy has not been surrendered - The life cover continues - but at a reduced amount called the **Paid-Up Sum Assured**

Formula: Paid-Up Sum Assured = (Number of premiums paid ÷ Total premiums payable) × Original Sum Assured

**Example:** 20-year endowment policy, Rs 10 lakh sum assured. You paid 8 years (annual premium), then stopped. Paid-Up SA = (8/20) × Rs 10 lakh = **Rs 4 lakh**

You still have Rs 4 lakh life cover. And at maturity (year 20), you receive Rs 4 lakh + any bonus accrued during the paid-up period (bonus accrual typically stops when policy goes paid-up).

## When Does Paid-Up Apply?

Paid-up conversion is automatic when: - At least 3 years of premiums have been paid - You stop paying further premiums - The policy is NOT surrendered

If you have paid fewer than 3 years of premiums and stop paying, the policy lapses (no value).

## Paid-Up vs Surrender - Which is Better?

**Almost always: paid-up is better than surrender.**

Surrender gives you cash now but ends the policy. Paid-up gives you no cash now, but the policy continues with reduced cover and you receive the paid-up maturity amount at the original maturity date.

The only time surrender makes sense is if you desperately need cash immediately and cannot wait for maturity.

## Reactivating a Paid-Up Policy

You can revive a paid-up policy by paying all outstanding premiums + interest within 2 years of it going paid-up (5 years with health declaration). After revival, the original sum assured is restored.

## How to Check Your Paid-Up Value

1. Log in to LIC customer portal (customer.onlineportal.licindia.in) 2. Under "Policy Status," check if your policy shows "Paid-Up" 3. The paid-up sum assured is displayed in your policy details

Or call your branch/agent and quote your policy number. Ajay Kumar Poddar at 9415313434 can help you evaluate whether to keep your policy paid-up or revive it.