⚠️ Educational Content Only: Insurance products have specific terms and conditions. Read the policy document (prospectus) carefully before buying. This is not financial advice.
LIC (Life Insurance Corporation of India) is India's largest insurer — trusted by 29 crore+ policyholders. But LIC offers 30+ products, and choosing the wrong one costs you lakhs in returns. The golden rule: keep insurance and investment separate. Buy a pure term plan for life cover (cheapest) and invest separately in mutual funds for wealth. Here's how LIC's key plans compare and which ones actually make sense in 2026.
LIC Plans Overview — Types
- Term Plans: Pure life cover — high sum assured, very low premium. No maturity benefit if you survive. Best for life protection.
- Endowment Plans: Life cover + savings/bonus. Lower returns (4–6% effective yield) but "safe". LIC Jeevan Anand, Jeevan Labh are endowment plans.
- Money-Back Plans: Get periodic payouts during policy term + maturity benefit. Useful for planned expenses.
- Whole Life Plans: Cover until age 100. Premium for limited period.
- ULIPs: Market-linked plans — returns depend on fund performance. High charges in early years.
Best LIC Plans — Detailed Reviews
🥇 LIC Tech Term (Plan No. 854) — Best Pure Protection
Type: Pure Term · Available: Online only · Death Benefit: Up to ₹5 crore+
LIC's online pure term plan — the cheapest way to get a large life cover from LIC. Available only online through licindia.in.
Key features:
• Cover up to ₹5 crore (or more) for just ₹10,000–₹25,000/year (for 30-year-old, 30-year term)
• Two death benefit options: Level Cover or Increasing Cover (5% annual increase)
• Joint life option available (covers spouse too)
• Special premium rates for women and non-smokers
• No maturity benefit — only death benefit (that's why it's cheap)
Premium example: 30-year-old male, non-smoker, ₹1 crore cover, 30-year term = approx ₹8,800–₹10,500/year
Best for: Anyone needing maximum life cover at minimum cost. Should be your first LIC priority.
LIC Jeevan Anand (Plan 915) — Most Popular Endowment
Type: Endowment + Whole Life · Death Benefit: Sum Assured + Bonus · Maturity: Sum Assured + Bonus
India's most popular endowment plan. Offers dual benefit: maturity payout if you survive + life cover continues even after maturity (whole life component). Profits come as bonuses (Simple Reversionary Bonus + Final Addition Bonus) declared annually by LIC.
Effective return analysis: Historically 4.5–5.5% IRR (internal rate of return) when bonuses are included. This is lower than FD rates in most years, but many people value the "forced savings" aspect and the combination of cover + savings.
Premium example: 30-year-old, ₹5L sum assured, 20-year term = approx ₹28,000–₹30,000/year
Best for: People who want savings discipline + life cover in one product. Not for those who can invest separately.
LIC Jeevan Labh (Plan 936) — Best Endowment for Returns
Type: Limited Premium Endowment · Premium Payment: 10/15/16 years · Policy Term: 16/21/25 years
Limited premium endowment — you pay premium for fewer years than the policy term. For example, in the 25-year policy, you pay premium for only 16 years but are covered for 25 years. This is more efficient than paying for the full term.
Key advantage over Jeevan Anand: Shorter premium-paying period gives a slightly better IRR (roughly 5–6%). The lump sum maturity amount is significantly higher due to compound bonuses over a longer period.
Best policy term to choose: 25-year term (premium for 16 years) gives the best bonus accumulation and maturity value.
Best for: Mid-career professionals wanting a large guaranteed corpus at retirement with insurance cover
LIC Plans — Quick Comparison Table
| Plan | Type | Effective Return | Tax Benefit | Buy Online? |
|---|
| Tech Term (854) | Pure Term | N/A (protection only) | 80C + 10(10D) | Yes (licindia.in) |
| Jeevan Anand (915) | Endowment | 4.5–5.5% IRR | 80C + 10(10D) | No (agent/branch) |
| Jeevan Labh (936) | Ltd. Premium Endowment | 5–6% IRR | 80C + 10(10D) | No (agent/branch) |
| New Jeevan Umang (945) | Whole Life + Money Back | 5–6% IRR | 80C + 10(10D) | No (agent/branch) |
| New Money Back 20 yrs (920) | Money Back | 4–5% IRR | 80C + 10(10D) | No (agent/branch) |
How to Buy LIC Policy Online — Step by Step
- Go to licindia.in → Click "Buy Policy Online"
- For Tech Term: Select "Term Plans" → "LIC's Tech Term" → Calculate premium for your age and sum assured
- Fill proposal form: personal details, nominee details, income, medical history
- Upload documents: PAN, Aadhaar, income proof (salary slip / ITR), age proof
- Pay first premium online (net banking / UPI / credit card)
- Medical exam may be required for large sum assured (above ₹25–50 lakh)
- Policy document emailed within 7–15 days after underwriting approval
💡 The Smart Strategy: Buy LIC Tech Term (₹1 crore cover for ~₹10,000/year) + SIP in index fund (₹15,000–₹20,000/month). Over 20 years, this combination gives you much better wealth creation than any LIC endowment plan — while keeping life protection intact. The "BTID" (Buy Term, Invest the Difference) strategy is recommended by most financial planners.
LIC Tax Benefits
- Section 80C: Premium paid is deductible up to ₹1.5 lakh/year (under old tax regime)
- Section 10(10D): Maturity proceeds are tax-free IF annual premium ≤ 10% of sum assured. For policies issued after April 2023 with annual premium above ₹5 lakh, maturity is taxable as per your income slab.
- Death benefit: Always 100% tax-free under Section 10(10D)
⚠️ Warning on LIC Surrender: Never surrender an LIC endowment policy in the first 3 years — you get zero surrender value. After 3 years, you get only 30–70% of premiums paid (Special Surrender Value). Surrendering midway is a major financial loss. If you can't afford premiums, opt for "Paid Up Policy" status instead of surrendering.