LIC Savings Calculator

The calculator runs a high-fidelity numerical solver (Newton-Raphson method) based on your real-life yearly premium payments (including applicable 1st year and renewal GST) as cash outflows and your final projected maturity proceeds (Sum Assured + Reversionary Bonus + FAB) as the cash inflow. This produces a highly accurate compound annual growth rate (CAGR/IRR) typically ranging between 4.8% to 6.2% depending on policy terms.

The Policy Term represents the entire duration of the policy where you enjoy insurance coverage and accumulated bonus additions. The Premium Paying Term (PPT) is the specific number of years you are required to pay premiums. In Regular Pay plans, PPT is equal to the Policy Term. In Limited Pay plans, PPT is shorter than the Policy Term (e.g. Jeevan Labh where term is 21 years but premium payment is only for 15 years).

Yes. Under Section 10(10D) of the Income Tax Act, maturity proceeds (including all vested bonuses) are 100% tax-free, provided the basic Sum Assured is at least 10 times the annual premium paid. In addition, the premiums paid during the policy duration are eligible for tax deduction under Section 80C up to ₹1.5 Lakhs per year.

Yes. LIC provides a grace period of 30 days for Yearly, Half-Yearly, and Quarterly premium payment frequencies. For Monthly payment frequencies, the grace period is restricted to 15 days. If a premium is paid during the grace period, no late fees or interest penalties are charged, and the policy remains active with full risk coverage.

Yes, you can easily apply for a loan against your LIC savings plan after the policy has acquired a surrender value (completed 2 full policy years). You can borrow up to 90% of the accrued surrender value in active plans and 85% in paid-up plans. The interest rates are set on a simple reducing balance, and you do not need to repay the principal immediately—it can be adjusted against maturity payouts.

If you stop paying premiums before completing 2 full years, the policy lapses, and all benefits (including risk cover and vested bonuses) are lost. No surrender value or return of premiums is paid. However, you can revive a lapsed policy within 5 consecutive years from the first unpaid premium date by paying outstanding premiums along with interest surcharge penalties.