LIC Jeevan Labh (Plan 936) Review: Should You Buy It.

By Viplav Majumdar CFP

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LIC Jeevan Labh: A Simple, Honest Analysis!

This analysis of LIC Jeevan Labh has been prepared for people who already hold this policy, or are thinking about buying it. This analysis is based purely on the promised objectives of the plan and their results. We have checked the suitability of this plan with the claimed objectives. The work is done on the direct impact of this plan on the future of an investor. Investors can take a better decision without depending only on the seller's promise. You may bookmark this page for future reference.

Why We Have Analyzed LIC Jeevan Labh

Most people buy a policy because someone they trust told them to. Very few check the real numbers first.

The reality is simple. You have limited savings. Your wealth in future will depend on the maturity value of your investments. So, invest your savings carefully.

LIC Jeevan Labh is one of the most widely held endowment policies in Indian homes. Millions of families are paying into it right now. That is exactly why its numbers deserve a plain, open look.

How We Have Analyzed LIC Jeevan Labh

The central idea of this analysis is your wealth and your financial responsibilities in future, with rising costs. We’ve shown the impact of the probable results of this plan on your life; negative or positive.

This is a direct, impact-based, neutral check. We’ve taken the plan's own numbers from its benefit illustration. We’ve compared them vs. plain, well-known options like FD, PPF and Mutual Funds. We’ve also checked the real wealth creation after adjusting for inflation, so you can see its real value, not just big-looking numbers. We’ve differentiated wealth creation and risk protection for your better understanding.

For the preparation of the Planyourworld Analysis we have used the calculators available on Planyourworld.com. These are unique in India. They show the real wealth creation after adjusting for inflation, income tax, and the value of the maturity amount in today's terms.

LIC Jeevan Labh: Quick Summary of the Results

LIC Jeevan Labh promises to help you with two objectives: savings with a maturity amount, and risk protection for your family.

When we checked both parts on their own, both looked weak.

Risk Protection: The life cover is too less to protect a family. In the plan's own illustration, the sum assured is ₹2 lakh. The pure risk part inside your premium costs hardly ₹400 a year. The rest is like a savings account with a long lock-in.

Wealth Building: The maturity value is not guaranteed in full. It depends on bonus. In our analysis the actual rate of return came out between roughly 2.6% and 5.5%, depending on which bonus scenario plays out. (You can use our wealth returns calculator to check how much return you'll need to create wealth).

In either case, the wealth part gives a loss of wealth, in real terms (after adjusting for inflation). The maturity value is less than a plain FD or PPF. It blocks a big part of your savings for 25 years. This has a highly negative impact on your financial future.

The rest of this article walks you through the exact numbers, so you can judge for yourself.

PYW WEALTH RATING ⭐☆☆☆☆ (loss of wealth)

Promises of LIC Jeevan Labh

Here is what the plan promises, in simple terms, taken from the illustration used in our video analysis:

•      Age of the person: 30 years

•      Basic Sum Assured (life cover): ₹2,00,000

•      Policy term: 25 years

•      Premium paying term: 16 years

•      Yearly premium: ₹9,134 (tax not included in our working)

•      Death benefit during the term, plus maturity benefit at the end

•      Participation in profit, so a bonus is added every year

•      At maturity you get around ₹2,20,000 in the lower scenario and about ₹3,70,000 in the better scenario

Please note one word carefully: participation in profit. It means this is not a fully guaranteed plan. Only the sum assured is fixed. The bonus is not.

LIC Jeevan Labh: What It Claims to Do

People usually buy this kind of policy for two reasons:

•      Risk Protection: People want to protect their family if something happens to them.

•      Wealth Building: Investors want their money to grow into real wealth for future responsibilities.

LIC Jeevan Labh tries to do both jobs in one product. Let us check how it justifies both.

LIC Jeevan Labh: Analysis of Life Cover

How much life insurance does a family really need?

Insurance is bought to protect your family for their entire life.

Your spouse's expenses for her whole life. Education of children. Settlement of children. Repayment of loans. In total, the dignity of your family, forever.

Now let us see how much protection this policy gives to your family, after you.

In the illustration, the yearly premium is ₹9,134 and the sum assured is ₹2,00,000. This is how the money splits:

•      About ₹400 a year is the real cost of pure risk cover for ₹2 lakh (this is roughly what a term plan charges for the same cover).

•      The rest, about ₹8,734 a year, goes into the savings side of the policy. We will check that side next.

So, the question is simple. Is ₹2 lakh of life cover enough for your family? Think about it plainly:

•      How much do you spend at home in one year?

•      How much loan do you carry, and who will repay it?

•      What are your child's school and college fees?

•      What about your child's settlement?

•      What about your loved one's day-to-day life for the next 30 or 40 years?

For most families, ₹2 lakh will not even cover one year of running the house. Hence, the honest answer is no.

Here is the part most buyers never see. If ₹400 buys ₹2 lakh of cover, then the same ₹9,134 spent only on pure risk cover could also buy a cover of around ₹45 lakh. Same money. Same period. A completely different level of safety for your family.

Concept of Life Insurance As per Financial Planning

You will pay for your responsibilities and create wealth by the age of 55 or 60. You protect your family's future with insurance, in case of untimely death in between.

Later in this article we have shown the path, how you can protect your family on your own, without depending on advisors. Also, how you can do your own financial planning.

LIC Jeevan Labh: How Much Wealth Can You Build?

Now let us check the wealth creation from LIC Jeevan Labh. Does a maturity value mean wealth? “No”.

We shall check wealth creation in two parts.

Firstly, we’ll compare the maturity value with simple options.

Secondly, we’ll check the real wealth creation, as it should be seen; after adjusting for rising costs. Every future bill of yours will rise with inflation.

So here is the plain question. If you put aside ₹8,734 every year for 16 years and then held that money for another 9 years, how much can you get?

Read that once more. Even the better scenario of the plan's own illustration ends in a loss of real wealth. And the whole comparison below is built on that better scenario, so the plan gets every benefit of doubt.

LIC Jeevan Labh vs. FDs, PPF and Mutual Funds

Let us take a quick overview of wealth creation in this plan vs. other plain and simple options. Same money, ₹8,734 a year for 16 years. Same total period of 25 years. Tax is not included in any of these workings, exactly as we said at the start.

LIC Jeevan Labh vs. Fixed Deposits

Fixed Deposits are the most common form of saving among Indian families. Nobody calls an FD a wealth plan. Yet in our analysis the plain FD ends up ahead, for the same money and the same period.

Why is the FD marked as 0% wealth creation? Because 7% is also roughly the rate at which your costs rise. So an FD only keeps you where you are. It does not make you richer. Anything below it makes you poorer.

LIC Jeevan Labh vs. PPF

Public Provident Fund is another very popular choice. It is backed by the government and the maturity is tax-free. Even so, its tax-free label alone does not guarantee wealth creation. It just about stays level with rising costs.

LIC Jeevan Labh vs. Mutual Funds (Commission-based)

This is a large-cap mutual fund plan which carries the hidden commission of the distributor inside it. It is called a regular plan. The commission is deducted daily, at the time of NAV calculation, so you never see it as a bill.

Even after carrying that commission, it may give you about ₹11,60,000 for the same yearly saving and the same period.

(We have considered an average 12% rate of return over the whole period.)

LIC Jeevan Labh vs. Mutual Funds (No Commission)

This is the same mutual fund scheme without the distributor's commission. It is called a direct plan. It could give you about ₹13,84,000 for the same money and period. Anyone can reach this value by learning money management.

(We have considered an average 13% rate of return over the whole period.)

So even a plain FD or PPF, both very safe and very simple, could give you more than this plan. An index or large-cap fund could give you far more across these 25 years.

Concept of Wealth Creation

More wealth means more purchasing power. To be wealthy, you need to create purchasing power in future. So, you create wealth only when you get more return than inflation.

LIC Jeevan Labh: Real Wealth Creation Explained Practically

Let us leave percentages aside and put a real bill in front of you.

Imagine you set a target of ₹11 lakh in today's value for your child's college, 25 years from now. That sounds like a good and safe number today.

With the rising cost of education, what costs ₹11 lakh today could cost close to ₹60 lakh in 25 years, at 7% inflation. Experts suggest considering 10% for education, which makes it even bigger.

And what does LIC Jeevan Labh hand you at the same time? About ₹3,70,000 in its better scenario.

That is the whole story in one line. The number looks fine today. The bill does not wait for it.

You are committed to pay for your future goals. So, the honest question is: should you be saving more, and in a better place?

Stop Investing Blindly for Wealth Creation: Respect Your Hard-Earned Savings

Do you have unlimited savings? Have you already arranged funds for all your future goals? If yes, it hardly matters where you invest. If not, respect every rupee.

It is the only thing that will pay your future bills. College fees of your son and daughter. Their marriage. Your medical bills beyond the insurance cover. Twenty to thirty years of retirement. And many more.

You ask any advisor about your future, and some plan is sold to you. In reality, most people are investing in the wrong products, without knowing the result.

Your responsibilities cannot be postponed. If you have limited savings, your future depends on the maturities that land in your bank account. With less savings, taking suitable decisions is not optional. It is a must.

So, does this plan suit your situation?

How to Know Which Plan is Right (Suitable) for You?

Every family has a different situation today, and unique needs tomorrow. Suitable investments depend on your age, career, savings, future expenses and all your goals.

As you saw above, one single goal may need ₹60 lakh. That looks difficult with limited savings. So, suitability to your current and future requirements becomes far more important than the name of the product.

But how do you check suitability, when you have never been trained in investing or money management? To plan your own world, everyone must get trained. And take responsibility for their own investments.

You need three things to identify suitable investments for your family's better future:

•      Skills of money management

•      One decision: take the commitment to become your own financial advisor

•      Clarity on your current situation and future goals

Let me discuss all three, in short.

How Money Management Skills Help You Grow Real Wealth

Everyone has their own opinion about money. Now think, how did you build yours? Do you know how wealthy people create passive income from small amounts? That is the skill of wealth principles.

The skill of creating wealth gives you freedom. You stop depending on others for advice. You start investing with clarity.

In my financial planning career of more than 20 years, I have seen people struggling at retirement. The reason is the same every time. They were never aware of the strategies of a wealthy retirement. One can even plan an early retirement with less savings.

Money skills also save you hidden commissions. Hidden commissions can erode around 40% of your wealth by the age of 60.

Roughly 20 hours of knowledge can make you wealthy forever.

After learning, one question will strike your mind. Why are these skills never shared with common people? With wealth skills you will be able to evaluate your current investments and take suitable decisions after looking at your own situation.

Know Your Requirements and Situation

Where are you today, financially? How much exactly do you save every month? Is your money lying idle in a bank account? What are the amounts your goals will actually demand? What do your son and daughter want? How much do you need to retire?

What is the suitable plan for you?

A plan that suits your colleague may not suit you at all.

The Best Solution: Create Your Financial Plan, Become Your Own Financial Advisor

Where do people usually fail in investing?

They save, then they take advice from others. Product sellers and bankers present themselves as advisors. Investing on a seller's advice is financially fatal.

It is simple, easy and highly beneficial to become your own financial advisor. Good financial planners are very expensive, and very few in number.

For this you may start your learning with Planyourworld Wealthy IQ, designed by financial planners for the common man. It can be covered in about 6 hours.

The beauty of this course is that it works for people with no background in finance at all.

Already Bought LIC Jeevan Labh? Do This

If you already hold this policy, please do not panic. Nothing has to be decided today.

Check the suitability of this product in your current situation and for your future benefit. For this you may learn money management. Then evaluate all your other investments in the same way.

Or hire a good fee-based financial planner for your complete financial planning. That will set you on the right path.

Takeaway From Planyourworld Analysis: LIC Jeevan Labh

Plans like this look attractive on the surface. A trusted name, a long list of features, a big-sounding maturity figure.

Based on this analysis, you can decide whether LIC Jeevan Labh suits your two objectives or not; protection for your family, and real wealth for your goals.

Ultimately it is your money, so it is your own responsibility to take the right decision.

If this article helped you look at your own investments a little differently, that is a very good first step in your journey to becoming your own financial advisor.

LIC Jeevan Labh FAQs: Frequently Asked Questions

1. What is LIC Jeevan Labh Plan 936?

It is an endowment policy from LIC. You pay premiums for a shorter period than the policy term, and you get a maturity amount at the end. It also carries a life cover during the term. In the illustration we used, the premium runs for 16 years and the policy matures in 25 years.

2. Is LIC Jeevan Labh an insurance plan or an investment plan?

It tries to be both. But when you check each part on its own, both look weak. The ₹2 lakh sum assured is far too small to protect a family. The savings part gives less at maturity than a plain FD or PPF. Mixing the two usually compromises both goals.

3. What is the maturity amount of LIC Jeevan Labh?

The maturity amount is your basic sum assured plus the bonuses added over the years. In the illustration we studied, that works out to about ₹2,20,000 in the lower scenario and about ₹3,70,000 in the better one, on a yearly premium of ₹9,134.

4. Are the returns of Jeevan Labh guaranteed?

Only the basic sum assured is guaranteed. The bonus is not. That is what participation in profit means. So your final maturity amount is known only at the end, not at the start.

5. What is the actual rate of return of LIC Jeevan Labh?

In our analysis the actual return came out between roughly 2.6% and 5.5%, depending on the bonus scenario. Compare that with the rate at which your costs rise, and the picture becomes clear.

6. What is the bonus rate of LIC Jeevan Labh?

The bonus is declared per thousand of sum assured. In the year we checked while making this analysis, it worked out to about ₹40 per thousand, which is roughly 4% on the sum assured, not on your premium. That is an important difference most buyers miss.

7. Can a Fixed Deposit or PPF give more than Plan 936?

Yes, both can. In our working, the same ₹8,734 a year grew to about ₹4,79,000 in a 7% FD and about ₹4,88,000 in PPF, against about ₹3,70,000 from the policy in its better scenario. More money, no long lock-in, and no small life cover eating into the return.

8. Is the LIC Jeevan Labh maturity amount tax-free?

Maturity proceeds of such policies are generally exempt under Section 10(10D), subject to the conditions and limits in force, and premiums may qualify under Section 80C. But please note the point of this article. Tax-free does not mean wealth-creating. A tax-free amount that grows slower than your bills still leaves you poorer.

9. Can I surrender this policy or take a loan against it?

Yes. The policy acquires a surrender value after the minimum premium-paying period set by LIC, and a loan is available against that value. Surrendering early usually returns much less than what you paid. Before you act, check the numbers for your own policy year, or get them checked properly.

10. Is LIC Jeevan Labh Plan 936 still available to buy?

Plan 936 was withdrawn from new sales in October 2024 and was reintroduced by LIC in a revised form under a new plan number. Existing policies continue as they are. So, if you already hold this policy, this analysis is still fully relevant to you.

11. Does inflation reduce the real value of the maturity amount?

It does, and this is the part most people miss. Say you have a goal worth ₹11 lakh today, like your child's college fee. In 25 years, at 7% average inflation, it could cost close to ₹60 lakh. So, the real question is not how big the maturity number looks. It is how much of that bill it can actually pay.