Stopped paying premiums, or thinking about it? Find out what your reduced sum assured and vested bonus actually add up to.
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Stopping premiums on an LIC policy doesn't have to mean losing everything — but it does mean your cover shrinks, and most people have no idea by how much until they ask LIC directly. This paid-up value calculator gives you an instant estimate of your reduced sum assured plus whatever bonus has already vested, using the standard formula that applies across most traditional LIC plans.
No further bonus accrues once a policy is paid-up. The vested bonus is frozen at whatever had already accumulated, and gets paid out alongside the reduced sum assured at maturity or death.
Scenario: ₹10,00,000 Basic Sum Assured, 20-year Premium Paying Term, premiums stopped after 8 years, bonus rate ₹40 per ₹1,000 SA per year.
This ₹7,20,000 is what the policy pays out at the original maturity date or on death, whichever comes first — with no further premiums required and no further bonus accruing.
| Option | What You Get | When It Makes Sense |
|---|---|---|
| Continue paying | Full sum assured + full bonus at maturity | You can still afford the premium |
| Go paid-up | Reduced sum assured + bonus frozen so far, paid at original maturity/death | You genuinely cannot continue but don't need cash now |
| Surrender | Lump sum today, policy ends immediately | You need the cash now and won't miss the eventual payout |
Paid-up almost always beats surrender in total value if you don't need the money immediately, precisely because surrender value is calculated at a discount to reflect early exit, while paid-up value simply waits for the original maturity date.
A paid-up policy is what your LIC policy becomes if you stop paying premiums after completing at least 3 full years (2 years for some plans), rather than letting it lapse entirely. Instead of the policy ending, the sum assured is reduced proportionally to how many years you actually paid versus how many you originally committed to, and the policy continues at this lower cover with no further premiums due. Any bonus already vested up to that point stays attached to the reduced policy.
Paid-up value is what your policy is worth if it continues, unpaid, until maturity or death, and pays out then. Surrender value is what you get in cash today if you close the policy immediately. A paid-up policy keeps working for you in the background with reduced cover; surrendering ends it entirely for an upfront lump sum, which is typically much lower than the eventual paid-up payout would be. Choosing paid-up over surrender only makes sense if you do not need the cash now and can wait for maturity.
No. Once a policy becomes paid-up, LIC stops adding any further annual bonus to it. The bonus that had already vested up to the point you stopped paying remains attached and gets paid out at maturity or death, but no new bonus accrues from that point forward. This is one of the biggest hidden costs of letting a policy go paid-up rather than continuing it, since the compounding bonus growth simply stops.
Most LIC traditional plans require at least 2 to 3 full years of premiums paid before the policy is eligible for paid-up status, though the exact minimum varies by specific plan. Stop paying before this minimum is reached and the policy simply lapses instead, with no reduced-cover fallback and no guaranteed payout at all, unless you revive it within the permitted revival period by paying the overdue premiums with interest.
Yes, most LIC plans allow reviving a paid-up policy back to its original full sum assured within a defined revival window, typically up to 5 years from the first unpaid premium, by paying all the overdue premiums plus interest (commonly around 9.5% per annum, compounding half-yearly) and satisfying any medical requirements the insurer asks for. After the revival window closes, the policy generally cannot return to full cover and stays paid-up permanently.
Yes, the standard formula used across most LIC traditional plans is: Paid-Up Sum Assured equals Basic Sum Assured multiplied by the number of years of premium actually paid, divided by the total number of years originally payable. Pay 8 years out of a 20-year premium paying term, for example, and your paid-up sum assured becomes 8/20ths, or 40%, of your original sum assured. Vested bonus is added on top of this reduced figure.
The premium paying term is what matters for this formula, not the overall policy term. On a limited-premium plan, such as a 20-year policy with premiums payable only for the first 12 years, the paid-up calculation uses 12 as the denominator, not 20. If you stop after 8 years on such a plan, your ratio is 8/12, not 8/20. Confirm your specific policy's premium paying term from your policy document before relying on this calculator's output.
Riders attached to your base policy, such as accidental death benefit or critical illness cover, generally lapse once the base policy becomes paid-up, since rider premiums are typically bundled with the base premium and stop being paid at the same time. Check your specific policy's terms, since some insurers structure certain riders differently, but the general expectation is that only the base life cover continues in reduced form, and supplementary rider benefits do not survive the paid-up conversion.
Because both the sum assured reduction and the loss of future bonus compound against you simultaneously. Stopping at 8 years out of 20 does not just cost you 60% of your cover; it also permanently stops 12 more years of bonus accrual that would have applied to the full sum assured had you continued. This is why insurance advisors generally recommend treating a traditional LIC policy as a long-term commitment before purchasing it, rather than assuming an easy partial exit later.
This calculator uses the standard, generic paid-up formula that applies to most traditional LIC endowment and whole-life participating plans, and is meant as an illustrative estimate. Specific plans can have variations in minimum qualifying years, bonus vesting rules, and rider treatment. For an exact figure, request a paid-up value quotation directly from LIC using your policy number, since only LIC's own records reflect your policy's precise bonus history and terms.
