Which LIC policy gives the best return? A real person’s lowdown
I totally get it—you’re here because you want actual returns, not just flashy promises. And you’re asking, which LIC policy gives the best return? You’re not alone; many folks are on the hunt for a plan that balances growth and security.
What does “best return” even mean?
First off, let’s clear this up: returns from LIC policies come from bonuses, guaranteed additions, and the sum assured itself. Some plans offer attractive non-participating guaranteed additions—like Navjeevan Shree touting 9.5%—but experts warn that’s not the full picture. Real return depends on overall payout, how long you stay invested, and what costs are involved.
Top LIC Picks for Solid Returns in 2025
Here’s a quick peek at plans regularly praised for their returns:
LIC Jeevan Labh (Endowment)
This plan has gained popularity among savers. The endowment provides numerous reversionary and final bonuses, along with a lump sum payout upon maturity. This endowment is an excellent choice for investors with mid- to long-term goals.
LIC New Jeevan Anand
The endowment offers slightly more flexibility in terms of term length, ranging from 15 to 35 years. Bonuses are decent. This is a consistently recommended choice.
LIC Jeevan Umang (Whole Life)
It provides survival benefits and long-term guaranteed bonuses. Some sources say it gives ~8% returns, and it’s a popular pick.
LIC Jeevan Utsav
A whole-life plan offering 10% of the sum assured as regular income post-term. This plan is suitable for those seeking consistent payouts.
ULIPs: LIC SIIP, Index Plus & Nivesh Plus
These bonuses are invested in market-linked funds, which means that their returns depend on market conditions. This plan offers a significant potential for growth, but it also carries a higher level of risk. For those comfortable with equities.
Navjeevan Shree – too good to be true?
LIC’s new Navjeevan Shree advertises a 9.5% guaranteed addition. Sounds wonderful, right? But caution: that rate is only one piece—it doesn’t reflect net returns after costs or how bonuses actually compound, The Economic Times. So while catchy, it may not top the returns leaderboard once you do the math.
Real-Life Reaction: Reddit Speaks
From r/personalfinanceindia:
“Assuming you pay for 16 years and get lumpsum in 23rd year, the return works out to 6%. You can get better returns even if you invest in PPF.”
They recommend splitting money: get a low-cost term plan and invest the rest in a mix of PPF, FDs, or equity—often outperforming traditional LIC returns.
Side-by-side comparison
| Plan Name | Type | Term & Bonuses | Typical Return Range |
|---|---|---|---|
| Jeevan Labh | Endowment | 15–25 yrs, with reversionary + final bonuses | ~6–8% historic |
| New Jeevan Anand | Endowment | 15–35 yrs, similar bonus structure | ~6–8% |
| Jeevan Umang | Whole Life | Long-term, survival benefits + bonuses | ~8% |
| Jeevan Utsav | Whole Life | 10% annual survival benefit post-term | ~8–9% (incl. perks) |
| Navjeevan Shree | Non‑part policy | Guaranteed 9.5% addition—but from LIC only | Effective return varies |
| ULIPs | Market-linked | Equity/debt mix; flexible fund options | Highly variable |
Tips to Maximize Your Returns
Start early & pay annually—compounds better and saves on admin costs.
Hold until maturity—bonuses get slashed if you stop early.
Match the plan to theo goal—needs long-term? Go endowment. Want income later? Try Utsav or Umang. Prefer growth? ULIP might suit.
Don’t overlook pure investment tools—PPF, ELSS, and mutual funds often yield more than 6–7%. LIC plans are more conservative.
Compute XIRR—check your actual annualized returns, not just maturity value.
So, which one gives the best return?
If your goal is to determine which LIC policy offers the highest return, here’s the summary: For guaranteed, stable returns, Jeevan Umang and Jeevan Utsav consistently lead the market with returns of approximately 8%. Among traditional endowment plans, Jeevan Labh and New Jeevan Anand follow closely. If you’re okay with market exposure and fees, ULIPs like SIIP, Index Plus, or Nivesh Plus can potentially do better, but they carry risk. And those shiny, guaranteed additions to non-participating plans, like Navjeevan Shree? They merit a thorough examination.
FAQ – quick Q&A recap
Q: Which LIC policy gives the best return?
A: If you want guaranteed returns, Jeevan Umang and Jeevan Utsav often lead (~8%). Want flexibility and potential? Look at ULIPs like SIIP or Index Plus.
Q: Is 9.5% on Navjeevan Shree real?
A: That’s just a guaranteed addition, not your effective annual return. After fees and compounding, actual returns may be lower.
Q: Should I pick a term plan and invest separately?
A: Many personal finance folks swear by a term + investment combo—term insurance for cover and mutual funds or PPF for better returns. One Redditor said investing separately gave much better returns than LIC’s combo plans.
Q: How do ULIPs compare with endowment plans?
A: ULIPs are market-linked—so they can offer higher long-term returns, but also more volatility and costs. Endowment plans are steadier & simpler.
Q: Are LIC returns taxable?
A: Maturity payouts are usually tax-free under Section 10(10D), provided premium rules are met. Premiums themselves get deductions under Section 80C.
Final takeaway
To answer, which LIC policy gives the best return? —For most people, a plan like Jeevan Umang or Jeevan Utsav delivers reliable ~8% returns with decent coverage. Endowment plans like Jeevan Labh/New Jeevan Anand are solid too.
If you’re prepared to assume some risk and manage additional complexity and costs, ULIPs may surpass traditional plans—but only after carefully examining the fund performance and fees.
Additionally, consider the proven combination of term insurance and investments in mutual funds or PPF, which has the potential to outperform LIC yields over time.
I hope you choose the LIC plan (or combination) that truly makes your money work for you. And hey, if you ever want help running an XIRR on your projected payouts or comparing actual returns, ping me anytime!
Are you uncertain about the extent of coverage your family requires? Use our free Health Insurance Coverage Calculator to get a quick, personalized estimate—it’s simple, swift, and designed for Indian households.