How to close lic policy ? You can close lic policy after 3 years. You will received Surrender Value of the policy. You can get surrender value of the policy if at least 3 years premiums have been paid by the policy holder. Apart from this you may also have the option of making a policy ‘paid-up’, which means reducing the sum assured, depending upon the number of premium paid. There is an option to keep the policy in force by deducting future premium from the surrender value. Also there is an option to provide term insurance if the surrender value is more than the sum assured.
In case the policy status is lapsed, all the premiums paid are forfeited. Insurance company does not entertain any claims if the policy is lapse. The Insurance Act does not allow for forfeiture as every policy acquires a reserve based on the premiums already paid.