What Is LIC Premium and How Is It Calculated?

Are you confused about what exactly is LIC premium is? Don’t worry—many people are! Whether you’re planning to buy a LIC policy or just want to understand how much you need to pay and why, this article will clear up all your doubts.

We’ll also show how our free tool at MyPolicyTools.in can help you calculate LIC premiums quickly and accurately. Let’s get started.

What Is LIC Premium?

The LIC premium is the amount of money you pay to the Life Insurance Corporation (LIC) of India to keep your policy active. It can be paid:

• Monthly
• Quarterly
• Half-yearly
• Yearly

This premium ensures that you and your family are financially protected. In return, LIC offers a maturity benefit (if you survive the term) or a death benefit (if something unfortunate happens during the policy period).

Why Do You Pay LIC Premiums?

Think of LIC premiums as a small savings that gives you:

1. Insurance coverage
2. Guaranteed returns
3. Bonus benefits
4. Peace of mind

The premium amount varies based on:

1. Your age
2. The sum assured (coverage amount)
3. Policy term
4. Policy type (endowment, term plan, whole life, etc.)
5. Payment mode

How Is LIC Premium Calculated?

The LIC premium is not a random number. It’s calculated using a specific formula that takes into account several factors:

✅ 1. Sum Assured

The guaranteed amount your family receives in case of your death.

✅ 2. Policy Term

The number of years you choose to stay insured, like 10, 20, or 30 years.

✅ 3. Policy Type

For example, term insurance is cheaper than endowment or whole life policies.

✅ 4. Age and Health

Younger policyholders generally pay lower premiums. The older you are, the higher the risk for the insurer.

✅ 5. Payment Mode

Paying annually usually costs less than monthly or quarterly due to fewer processing charges.

🧮 Example Calculation (Simplified):

Let’s say:

1. Sum Assured: ₹5,00,000
2. Age: 30
3. Policy Term: 20 years
4. Policy Type: Endowment

The annual premium may be around ₹20,000 (this amount varies). You pay this for 20 years and then receive a maturity amount, which includes the sum assured + bonus.

Instead of guessing or doing long calculations manually…

🛠️ Use Our Free LIC Premium Calculator Tool

At MyPolicyTools.in, we offer a free, easy-to-use LIC Premium Calculator tool. Here’s how it helps:

✅ Instant Premium Estimation

Just enter your age, policy type, sum assured, and term, and the tool instantly gives an estimate of your annual or monthly premium.

✅ Try Different Scenarios

Want to see the premium difference between a 10-year and 20-year term? Or endowment vs term insurance? Try different combinations with just a few clicks.

✅ Zero Confusion, Full Clarity

The tool is simple, mobile-friendly, and designed for anyone to use—no financial background required.

✅ Safe & Free

No login, no payment. Use it anytime, anywhere!

How to Use the Tool (Step-by-Step):

1. Visit 👉 LIC Premium Calculator
2. Select your Policy Type
3. Enter your Age, Sum Assured, and Policy Term
4. Choose the Payment Mode (monthly, yearly, etc.)
5. Click “Calculate.”

You’ll see the estimated premium right away!

Why MyPolicyTools.in Is Useful for LIC Policyholders

At MyPolicyTools.in, we don’t just offer premium calculators. Our website is built to empower users with tools and knowledge to make better insurance decisions:

• ✅ Surrender Value Calculators
• ✅ Maturity Value Tools
• ✅ Step-by-step Guides
• ✅ Policy Comparisons
• ✅ Latest LIC Updates

We also publish easy-to-read blog posts, FAQs, and calculators tailored for Indian users who want clarity without confusing financial terms.

Explore Our Tools Now:

👉 LIC Premium Calculator – Free Online Tool

Frequently Asked Questions