How does LIC Calculate Its Premium?

LIC is by far the most popular insurance company in India and also one of the oldest. Earlier people were attracted to LIC because it was owned by the government and hence considered to be safe. On the other hand, LIC also offers the widest range of differently designed policies for different requirements. The premiums for the policies are also more affordable compared to the premiums charged by private insurance companies.

However, the main trouble with Life insurance corporation policies is that there are so many of them and it becomes difficult to understand which policy will be the most suitable for you. While you can easily find out about the benefits under each policy, the main question is what premium is charged for those benefits. But now that dilemma is also resolved as you can easily get LIC premium calculator online. 

With the help of such a calculator you can easily discern the amount that you need to pay a premium for the different LIC policies. Let us try to understand LIC policy and premiums in detail.

How LIC policies work

There are many things related to LIC policies apart from simply getting the sum assured. Apart from the premiums there are the bonuses and the policy rules of LIC.

Moneyback plans or non-moneyback plans

Apart from the basic term insurance LIC offers many different kinds of plans. Many LIC policies pay the policy holder in a periodic manner like at the end of the 4^th, 8^th and 12^th year and finally at the end of the maturity period. These are the money back policies and an example of these is the LIC Jeevan Surabhi or LIC komal Jeevan, many people prefer these plans because they get money at regular intervals in between and this seems to be attractive to them.

However, you need to bear in mind that the premiums for these policies are usually higher. On the other hand there are some LIC policies which do not pay you back on regular intervals, but instead they only pay you at the end of the maturity period. These are generally known as normal Endowment plans and examples of these plans are the Jeevan Anand and Jeevan Tarang.

How to calculate premium for your preferred LIC policy

The first step is to search for the calculator by typing in ‘LIC premium calculator’ in your preferred search engine.

The next step is to log into the website and choose the plan for which you wish to calculate the premium from the list of plans.

The next step is to enter date of birth which you can choose from the calendar link on the website. Next you should enter the monthly premium that you wish to pay.

The premium calculator will display your age and the sum assured. For instance if the result is 12,50,000 for a monthly premium of Rs. 5000 you can opt for the Jeevan saral policy for sum assured of Rs. 12,50,000.

If you wish to opt for term insurance then this is the best way to get an idea of the amount of premium that you need to pay.

Do bear in mind that the net premium amount that you need to pay in reality may be different from what you see on the premium calculator. This is because the final decision regarding the premium amount is with the under-writer. Also with some policies it is not possible to get a monthly premium option and it could be in different tenures like half yearly, annually etc. You need to get in touch with either the LIC office or your LIC agent in order to confirm the premium amount. However, you do get an approximate idea of the amount you need to pay with the help of the calculator.