The LIC return calculator works out the maturity value of a traditional LIC policy (sum assured plus bonuses) and the real annual return, or IRR, on your premiums. Example: ₹50,000 a year for 15 years on a ₹10 lakh, 21-year policy with a ₹45 bonus gives about ₹20.45 lakh at maturity, an IRR of about 7.09%, almost the same as PPF at 7.1%.
LIC Policy Return (IRR) Calculator
Your estimate
- Total premium paid
- ₹7,50,000
- Total bonus (estimated)simple reversionary bonus
- ₹9,45,000
- Final additional bonus
- ₹1,00,000
- Net gain
- ₹12,95,000
- Money multiple
- 2.73×
- Same premiums at the comparison rateafter 21 years
- ₹20,46,533
- Policy minus comparisonnegative means the safe option would have given more (ignores life cover)
- ₹-1,533
- Total premium paid₹7,50,00037%
- Net gain₹12,95,00063%
Individual life insurance premiums are exempt from GST from 22 September 2025. Figures are estimates based on typical rates and may differ from LIC’s official quote.
What does the LIC return calculator do?
Most people know their premium and their sum assured, but not the return their LIC policy actually earns. The maturity figure, often shown as “₹20 lakh on ₹7.5 lakh invested”, hides how long your money was locked in. This calculator turns a traditional LIC policy into two clear numbers:
- Maturity value: sum assured plus the simple reversionary bonus for every year of the term, plus any final additional bonus.
- IRR (internal rate of return): the yearly interest rate that would turn your stream of premiums into that maturity value.
It also shows the money multiple, and what the same premiums would have grown to at a safe rate you choose, such as PPF or a bank FD. Then you can see whether the policy is doing its job.
It works for any with-profit endowment-type LIC plan that pays a lump sum at the end: Jeevan Labh, Jeevan Anand, New Endowment, Jeevan Lakshya and similar. We are an independent site; results are estimates based on your inputs.
How it works (the formula in plain words)
- Total premium = yearly premium × premium paying term.
- Bonus = bonus rate × (sum assured ÷ 1,000) × policy term. LIC declares the bonus per ₹1,000 of sum assured each year, and it accrues for the full term, even after premiums stop.
- Final additional bonus = FAB rate × (sum assured ÷ 1,000), paid once at maturity. Put 0 if you want a cautious estimate.
- Maturity value = sum assured + bonus + final bonus.
- IRR: each premium is treated as money going out at the start of the year, and the maturity as money coming in at the end of the term. The calculator solves for the rate that makes the two equal.
- Comparison: each premium is grown at your comparison rate until the end of the term and added up.
There is no GST line. Since 22 September 2025, individual life insurance premiums are exempt from GST, so the premium you enter is the full outflow.
Why IRR and not just “total return”?
Two policies can both double your money, but one might take 12 years and the other 25. The first earns about 6% a year, the second under 3%. IRR captures that difference because it accounts for when each rupee leaves your account and when it comes back. It is the same measure banks use to quote loan rates and mutual funds use for SIP returns (XIRR), so it lets you line up an LIC policy against any other option on equal terms.
Worked example
A limited-pay endowment policy: premium ₹50,000 a year for 15 years, sum assured ₹10 lakh, 21-year term, bonus ₹45, final bonus ₹100 per ₹1,000, compared with PPF at 7.1%.
| Item | Amount |
|---|---|
| Total premium paid | ₹7,50,000 |
| Simple reversionary bonus | ₹9,45,000 |
| Final additional bonus | ₹1,00,000 |
| Maturity value | ₹20,45,000 |
| IRR | 7.09% a year |
| Money multiple | 2.73× |
| Same premiums in PPF at 7.1% | ₹20,46,533 |
| Policy minus PPF | −₹1,533 |
The policy almost exactly matches PPF, and it also gave ₹10 lakh of life cover for 21 years.
A regular-pay policy with no final bonus: ₹45,000 a year for 20 years, ₹10 lakh sum assured, bonus ₹42, FAB 0. Maturity is ₹18,40,000 (2.04×), and the IRR is 6.40%. At 7.1%, the same premiums would have grown to ₹19,97,486, about ₹1.57 lakh more. That gap is the price of the life cover and the plan’s guarantees.
Tip: always run a “no bonus” case. In the first example, setting both bonuses to zero drops the maturity to ₹10 lakh and the IRR to about 2%. The difference between that and 7% is how much you depend on LIC’s future bonus declarations.
How to read the results
- Maturity value is the rupee amount you can expect at the end of the term, if your bonus assumptions hold.
- Approx. return (IRR) is the number to compare with other investments. An IRR above your comparison rate means the policy beat the safe option.
- Total bonus and Final additional bonus show how much of the maturity depends on bonuses rather than the guaranteed sum assured.
- Money multiple is maturity divided by total premium. It is easy to understand but ignores time, so don’t judge a policy on it alone.
- Same premiums at the comparison rate and the difference row tell you what the policy costs or earns compared with the safe option. A negative difference is not automatically bad, because the policy also carried life cover.
Tips and common mistakes
- Use the real bonus for your plan. Bonus rates differ by plan and term. Check the latest declaration for your plan, or look at our LIC bonus calculator.
- Don’t forget the premium paying term. Limited-pay plans such as Jeevan Labh stop premiums years before maturity. That raises the IRR, so enter it correctly.
- Don’t double-count. If your plan pays money back during the term, this single-maturity model will understate the return. Use the money back calculator instead.
- Tax matters. Maturity is generally tax-free under Section 11 read with Schedule II of the Income-tax Act, 2025 (earlier Section 10(10D)) when conditions are met, while FD interest is taxable. A 6.4% tax-free IRR can beat a 7% taxable FD for someone in the 30% bracket.
- Mid-term exit changes everything. If you might surrender early, the return will be far lower. Check the surrender value before you commit to a long policy.
Related calculators
- LIC maturity calculator: plan-specific maturity estimates.
- LIC Jeevan Labh calculator: premium, maturity and IRR for Plans 736, 936 and 836.
Frequently asked questions
How do I calculate the return on my LIC policy?
Add the sum assured, the yearly bonus multiplied by the term, and any final bonus to get the maturity value. Then find the interest rate at which your yearly premiums would grow to that amount. That rate is the IRR, and this calculator does the arithmetic for you.
What is a good return on an LIC endowment policy?
Traditional LIC endowment and money back plans usually deliver around 5% to 7% a year, tax-free, with life cover included. In our example, a ₹45 bonus gives 7.09%, while a ₹38 bonus with no final bonus gives about 6.19%.
Why is the maturity amount not the same as the return?
The maturity amount is a total in rupees; the return is a yearly rate. ₹20.45 lakh for ₹7.5 lakh of premium looks like 2.7 times your money, but spread over 21 years it is about 7.09% a year.
Is the LIC return guaranteed?
Only the sum assured is guaranteed in with-profit plans. Bonuses are declared every year based on LIC's surplus. Without any bonus, our example's return would fall to about 2%, so always test a lower bonus rate.
Should I include GST in the premium?
No. Individual life insurance premiums have been exempt from GST since 22 September 2025, so enter the premium you now pay. For older years, premiums carried 4.5% GST in the first year and 2.25% later, which slightly reduced the true return.
Is LIC better than PPF?
At current bonus levels, a good LIC endowment plan can come close to PPF's 7.1%, but it is less liquid and bonus is not guaranteed. LIC includes life cover; PPF does not. Many people use PPF for savings and a term plan for cover instead.
Can I use this for a money back policy?
This calculator assumes a single payment at maturity. For money back plans, use our money back calculator, which accounts for each survival benefit and its timing.
Disclaimer: LIC Premium Calculators is an independent website. We are not affiliated with, endorsed by or connected to Life Insurance Corporation of India. All figures are estimates for illustration; confirm exact premiums and benefits with LIC or a licensed agent before buying.