LIC Jeevan Labh Review: 4.76% in the 8% Illustration

Is LIC Jeevan Labh a good investment?

As an investment, no. On LIC's own benefit illustration for Plan 736, for a 30-year-old with a ₹2,00,000 sum assured paying ₹10,025 a year for 16 years on a 25-year policy, Jeevan Labh returns 4.76% a year at the 8% scenario and 1.80% at the 4% scenario, and the guaranteed portion alone works out to 1.26%. A Public Provident Fund pays 7.1% a year for October to December 2026, set by the government and tax-free. Jeevan Labh is a non-linked participating savings plan, so only the sum assured is contractual; everything above it is bonus that LIC declares at its discretion.

That does not make it a scam. It makes it a forced-savings plan with a life-cover floor, priced like one. The question worth answering is not whether the return is good, because it is not, but whether disciplined, insured, below-market saving is what you actually want. For some people it is.

What LIC's own illustration shows

Jeevan Labh is currently sold as Plan 736, UIN 512N304V03; the earlier Plan 936 was withdrawn for new sales on 1 October 2024 and re-filed under the new IRDAI product rules. LIC's Plan 736 sales brochure carries this benefit illustration:

Against those inputs, LIC illustrates two maturity figures, at the 4% and 8% gross-return scenarios IRDAI requires every insurer to show:

The crucial point sits in the gap between the columns. The 8% is an assumed investment return, not the rate your money earns. LIC's own illustration says the two rates are not guaranteed and are not the upper or lower limits of what you might get. On the premiums you actually pay, its higher, 8% scenario works out to 4.76% a year and the 4% scenario to 1.80%. And if LIC declared no bonus at all, you would get the sum assured back and 1.26%.

If you hold the older Plan 936. LIC's Plan 936 brochure illustrated the same 30-year-old, ₹2,00,000 sum assured and 25-year term at ₹9,134 a year, with the same ₹2,20,000 and ₹3,70,000 maturity figures. On that lower premium the rates are 1.79% guaranteed, 2.33% and 5.28%. Plan 936 policies continue on their own terms; our guide to surrendering or making an LIC policy paid-up sets out where the two plans' exit rules differ.

How that compares to the obvious alternatives

The honest test for any savings-plus-insurance product is to split it into its two jobs and price each separately.

• As protection: the ₹10,025-a-year premium here buys ₹2,00,000 of cover. A plain term plan buys ₹1 crore of cover to age 60 for a 30-year-old non-smoking man for ₹8,856 to ₹10,440 a year across the five plans nyvo rates (nyvo premium data, May 2026): about the same premium for fifty times the cover. Most of the Jeevan Labh premium is going into the savings pot, not the cover.
• As savings: the pot returns 4.76% in LIC's 8% illustration. A PPF pays 7.1% a year for October to December 2026, tax-free, but the government resets that rate every quarter, so today's gap is a comparison at current rates, not a promised difference over the policy's 25 years.

This is the arithmetic behind the standard advice to buy term and invest the rest: a term plan plus a PPF gives you both far more cover and a higher return than a single plan trying to do both. Jeevan Labh bundles them and, in bundling, dilutes both. Our page on the real return on guaranteed income plans sets these figures beside the non-participating plans on the market.

Then who is Jeevan Labh actually for?

For the person who will not otherwise save or invest, and who values a fixed contractual outcome over a market one. Three things genuinely count in its favour:

1. It forces the habit. A 16-year premium commitment with a lapse penalty is, for some people, the only saving that actually happens. A PPF you can neglect; a policy you tend not to.
2. The floor is contractual. The sum assured cannot fall, and the death benefit – the higher of the basic sum assured or 7 times the annualised premium, plus vested bonuses and any Final Additional Bonus, never less than 105% of premiums paid – protects the early years if the worst happens.
3. There is no market risk. The return is low, but it will not be negative, which is not true of an index fund.

None of that changes the return. It changes whether the return is the right thing to optimise for. If you have the discipline to run a term plan alongside a PPF or an index fund, that combination wins on every measure here. If you do not, Jeevan Labh is a safe, dull, below-market way to end up with a lump sum you would not otherwise have saved.

FAQs

What is the return on LIC Jeevan Labh?

On LIC's own Plan 736 benefit illustration for a 30-year-old with a ₹2,00,000 sum assured, a 25-year term, a 16-year premium term and a yearly premium of ₹10,025, the maturity return is 4.76% a year at the 8% scenario and 1.80% at the 4% scenario. The guaranteed portion, the sum assured with no bonus, is 1.26% a year. These are arithmetic on LIC's published figures, not projections.

Is the 8% in the LIC illustration what I will earn?

No. The 4% and 8% are the gross investment returns LIC assumes, shown because IRDAI requires both scenarios. On the premiums you pay, LIC's own Plan 736 illustration for age 30 (₹10,025 a year for 16 years, 25-year term) works out to 4.76% a year in the 8% scenario and 1.80% in the 4% scenario, and LIC states that neither rate is guaranteed.

Is LIC Jeevan Labh better than a PPF?

Not at today's rates. A PPF pays 7.1% a year for October to December 2026, tax-free, against Jeevan Labh's 4.76% in LIC's 8% illustration for age 30, ₹10,025 a year for 16 years and a 25-year term; the PPF rate is reset each quarter, so the gap can change. Jeevan Labh adds a small life cover that a PPF does not, but a separate term plan buys far more cover for the money, so the PPF-plus-term combination beats it on both counts.

Is only part of the Jeevan Labh maturity guaranteed?

Yes. Only the basic sum assured is guaranteed. The rest of the maturity value is Simple Reversionary Bonus and Final Additional Bonus, which LIC declares at its discretion each year and which are not contractually promised. If LIC declared no bonus, you would receive the sum assured alone.

Was LIC Jeevan Labh discontinued?

Plan 936 was withdrawn for new sales on 1 October 2024 under the new IRDAI product regulations. LIC re-filed the plan and it is currently sold as Plan 736, UIN 512N304V03. Existing 936 policies continue to maturity on their original terms.

Should I surrender my Jeevan Labh policy?

That depends on how many years you have paid and what you would do with the money instead, and it is not a decision to take on a headline return alone – an early surrender can lose a large part of what you have paid. Read how surrender value works first, and speak to an advisor who is not paid to keep the policy in force.

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