LIC Policy Maturity & Bonus Calculator
Estimate your basic Sum Assured, declared Simple Reversionary Bonuses, Final Additional Bonus (FAB), and true annualized yield (IRR %) across Jeevan Labh, Jeevan Anand, and Endowment plans.
Policy Parameters
Buy Term & Invest Difference (BTID) Opportunity Cost
Invested across 10 years
Maturity minus total premiums paid
Surplus if surplus was in Nifty 50 Index @ 12%
Maturity Composition & Alternative Compounding
Visual ModelYear-by-Year Bonus Accrual & Death Benefit Schedule
Schedule| Year | Premium Paid | Cumulative Paid | Annual Bonus | Cumulative Bonus | Death Cover | Maturity Payout |
|---|
Understanding LIC Policy Maturity: Bonuses, Yield & Tax Laws (2026)
For decades, Life Insurance Corporation of India (LIC) endowment plans have been the cornerstone of household financial savings across Indian families. However, evaluating the actual financial payout requires peeling back the marketing jargon of "bonus rates" to understand how Simple Reversionary Bonuses, Final Additional Bonuses (FAB), and real Internal Rates of Return (IRR) function in practice.
Simple Reversionary Bonus
Unlike mutual fund compounding where returns compound exponentially, LIC bonuses are calculated as a simple flat rate (e.g., ₹44 per ₹1,000 Sum Assured). It does not earn interest over the policy term; instead, it is simply banked and paid out without compounding at maturity.
Final Additional Bonus (FAB)
FAB is a loyalty incentive paid only once upon maturity for policies completing at least 15 years. Rates scale exponentially for tenures exceeding 25 to 30 years, often contributing 10% to 25% of the total maturity cash inflow.
Section 10(10D) ₹5 Lakh Cap
Under Finance Act 2023, traditional non-linked life insurance policies issued on or after April 1, 2023 where the aggregate annual premium exceeds ₹5,00,000 lose tax exemption under Section 10(10D). The net profit is taxable as "Income from Other Sources" under Section 56(2)(xiii).
Related Insurance & Wealth Calculators
LIC Surrender Calculator
GSV vs SSV and paid-up alternative
Public Provident Fund (PPF)
7.1% Sovereign EEE tax-free compounding
Sukanya Samriddhi (SSY)
8.2% Girl child sovereign wealth engine
Mutual Fund SIP Calculator
12% Equity wealth compounding simulator