LIC Premium & Maturity Calculator

Computing the effective IRR of existing LIC endowment policies to decide whether to hold to maturity, pay-up, or surrender and reinvest.

Comparing the tax efficiency of LIC traditional plans vs ELSS vs PPF for Section 80C utilisation.

Estimating the maturity benefit of existing LIC policies for retirement corpus planning alongside EPF, PPF, and NPS.

Term insurance coverage assessment — computing the adequate life cover needed (typically 10-20× annual income) and comparing LIC Tech Term vs private insurer costs.

Surrender value estimation for financial emergency planning — knowing the approximate surrender value helps decide whether a policy loan or surrender is the better option during financial stress.

What is the difference between LIC Jeevan Anand and Jeevan Labh?

Jeevan Anand (Plan 915) is a regular premium endowment plan where you pay premiums for the full policy term and receive SA + bonuses at maturity; uniquely, the whole life cover for the full SA continues after maturity at no extra premium. Jeevan Labh (Plan 836) is a limited premium endowment plan — you pay for a shorter period (e.g., 16 years) but coverage and maturity benefit continue for a longer term (e.g., 25 years). Jeevan Labh is generally preferred for its premium efficiency.

What are LIC's reversionary bonus rates?

LIC declares Simple Reversionary Bonus (SRB) annually — it is a percentage of the Sum Assured per ₹1,000 of SA. Recent SRB rates: for endowment plans (Jeevan Anand, Jeevan Labh) — approximately ₹35-55 per ₹1,000 SA per year. Final Additional Bonus (FAB) is declared for policies running 15+ years and significantly boosts the maturity payout — approximately ₹200-700 per ₹1,000 SA depending on policy type and term. Bonus rates are announced annually and are not guaranteed.

Is the LIC maturity amount taxable?

Under Section 10(10D): LIC maturity amount is tax-free if the annual premium does not exceed 10% of the Sum Assured (for policies issued after April 1, 2012). For policies where annual premium exceeds 10% of SA, the maturity amount is taxable (TDS deducted by LIC at 5% if total sum exceeds ₹1 lakh). Death benefit is always tax-free regardless of premium-to-SA ratio. This 10% rule effectively restricts 80C tax benefits only to plans where SA is at least 10× the annual premium.

What is the grace period for LIC premium payment?

LIC allows a grace period of 30 days for annual, semi-annual, and quarterly premium payment modes; 15 days for monthly mode. If the premium is not paid within the grace period, the policy lapses. A lapsed policy can be revived within 5 years of lapsation by paying all outstanding premiums with interest (typically 9-10% per annum compound). Policies lapsed before 3 full annual premiums are paid have no surrender value.

How is LIC premium different from ELSS for Section 80C?

Both LIC premiums and ELSS investments qualify for Section 80C deduction up to ₹1.5 lakh. Key differences: LIC premium provides life cover (critical for dependents); ELSS provides only investment with no insurance. Returns: ELSS offers historically higher returns (12-15% CAGR) vs LIC traditional plans (5-6% IRR). Liquidity: ELSS has 3-year lock-in; LIC traditional plans have multi-year terms with significant surrender penalties. For pure tax saving + investment, ELSS is superior; for tax saving + protection, term insurance + ELSS/PPF is generally better than traditional LIC endowment.

What is the LIC loan facility?

Once a LIC traditional policy has accumulated a surrender value (after 3 years of premium payment), the policyholder can take a loan against the policy. The loan amount is up to 90% of the surrender value. The interest rate on policy loans is typically 9-11% per annum. If the loan is not repaid, the outstanding loan + interest is deducted from the claim amount (death benefit or maturity value). Policy loans are a good emergency liquidity option rather than surrendering the policy.

What is the difference between sum assured and death benefit in LIC plans?

Sum Assured (SA) is the face value of the policy — the guaranteed amount the policyholder or nominee receives. Death benefit is the total amount payable to the nominee on death — this includes SA plus all accumulated bonuses. For some plans, death benefit is the higher of SA or 10 times the annualised premium, whichever is higher. Effectively, in traditional plans, the death benefit during the policy term includes SA + bonuses accrued up to the date of death.

Should I surrender my old LIC policy and invest in mutual funds?

This is a common question. In most cases: if a traditional LIC policy has been running for less than 5-7 years, surrendering means significant loss of premiums. If the policy has been running 10+ years with substantial bonuses, it may be worth holding to maturity as the returns improve with time. For older policies (pre-2012 era) with better bonus rates, holding often makes sense. The right approach is to buy adequate term insurance separately (if not done), stop new LIC endowment investments, and invest future savings in ELSS/PPF/NPS for better returns.