LIC Premium Calculator — Life Cover & Tax Benefit India
Calculate how much life insurance cover you need, compare LIC term insurance vs endowment premium side-by-side, and check your Section 80C tax deduction and Section 10(10D) maturity exemption. Covers LIC Tech Term, Jeevan Anand, GST on premium, and the term + SIP alternative.
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How to Use This Calculator
Life Cover Needed tab
Enter your annual income, outstanding liabilities (home loan, car loan, etc.), existing life cover (employer insurance, existing policies), and number of dependents. The calculator uses the Human Life Value (HLV) method — 10x income for 1-2 dependents, 12x for 3, and 15x for 4+ — to determine your ideal cover. It then shows the gap between what you need and what you already have, plus an estimated term insurance premium to fill that gap.
Term vs Endowment tab
Enter the cover amount, your age, and policy term to see a head-to-head comparison between term insurance (LIC Tech Term) and endowment (LIC Jeevan Anand). The calculator shows the massive premium difference, the endowment’s low effective return (~5-6%), and the “term + SIP” alternative — where investing the premium difference in equity mutual funds typically builds far more wealth than the endowment maturity.
Tax on LIC tab
Enter your annual premium, sum assured, policy type, and issue date to check three things: (1) whether your premium qualifies for Section 80C deduction and how much tax you save, (2) whether your maturity proceeds are tax-free under Section 10(10D), and (3) the GST on your premium. The calculator checks both the 10% premium rule (for post-2012 policies) and the ₹5 lakh aggregate cap (Budget 2023).
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How Life Insurance Cover is Calculated
The calculator uses the Human Life Value (HLV) method recommended by IRDAI, combined with a liability-adjusted approach:
(Annual Income × Multiplier) + Outstanding Liabilities − Existing Cover
Multiplier by dependents:
• 1-2 dependents → 10x annual income
• 3 dependents → 12x annual income
• 4+ dependents → 15x annual income
Term vs Endowment premium ratio:
Endowment premium ≈ 40-50x term premium for same sum assured
Term + SIP corpus:
FV = SIP × [(1 + r)n − 1] / r × (1 + r)
Where SIP = (Endowment premium − Term premium) / 12
Section 80C deduction rule:
Premium must be ≤ 10% of Sum Assured (post April 2012)
Maximum deduction: ₹1,50,000 per FY (shared with PPF, EPF, ELSS, etc.)
The HLV approach ensures your family can replace your income for 10-15 years, repay all debts, and maintain their standard of living. The multiplier accounts for inflation and the time value of money.
Example
Priya — 30-year-old IT professional in Bangalore, ₹15 lakh annual income, ₹40 lakh home loan
Priya earns ₹15 lakh/year, has a ₹40 lakh home loan, her employer provides ₹10 lakh group insurance, she has 2 dependents (husband works part-time, one child). She wants to know if she needs additional life cover.
Step 1: Calculate cover needed
Step 2: Account for existing cover
Step 3: Term insurance premium
Step 4: Tax benefit
For just ₹700/month (effectively less after tax savings), Priya gets ₹1.8 Cr life cover for her family. An endowment plan for the same cover would cost ₹7-8 lakh/year — over 80x more expensive. By choosing term insurance and investing the difference in mutual funds, she builds wealth far more efficiently.