# How to Calculate Returns from LIC New Jeevan Anand policy (2023)?

Are you a LIC policyholder and are looking for How to calculate % returns from LIC New Jeevan Anand policy in India (2023)?

You are not alone. Many Indians get introduced to LIC (by their family/friend LIC uncles) and start investing in traditional endowment plans like LIC New Jeevan Anand (Plan No. 915) at the start of their earning years.

But it is only after paying premium for a few years that they realize about the actual returns of LIC Jeevan Anand and how it offers very low-returns-&-small-insurance-cover that these policyholders start asking Should I surrender my LIC New Jeevan Anand? And it is quite natural to feel that way as its your hard earned money you are investing in LIC New Jeevan Anand and that too for decades long policy tenures of 15-30 years.

But in this post, let’s understand How to calculate returns from LIC New Jeevan Anand policy? and Life Insurance Jeevan Anand Plan Return Calculation using MS Excel. We will also see what are the different types of LIC bonuses declared on LIC New Jeevan Anand type of insurance policies and how these impact your returns as a policyholder. You will then be in a very good position to understand why it is not the best investment option even if LIC agents tell you that it combines insurance and investments and what not.

Let’s see.

How to Calculate LIC New Jeevan Anand policy Returns (2023)?

One of the most popular (and most aggressively sold) type of life insurance is endowment plans. And LIC New Jeevan Anand is one type of endowment assurance plan too.

To summarize the offering, in LIC New Jeevan Anand which is “a non-linked, participating, individual, life assurance savings plan”, you need to pay a premium for X number of years and then on maturity, you get a fixed sum assured plus bonuses. After the policy maturity the life cover still continues, and as and when the policyholder eventually dies, the nominee will get up to 125% of the sum assured, again.

So as LIC agents will tell you, LIC New Jeevan Anand pays you when you live (till maturity) and also to your family (once you are no more). Typical example of LIC slogan of “Zindagi Ke Sath Bhi, Zindagi Ke Baad Bhi”. To be fair, this sounds tempting and attractive.

If you look at LIC New Jeevan Anand policy brochure (link) on LIC’s website, in the Benefit Illustration, it talks about up to 8% gross returns. But that is just an illustration and not the actual returns you get. How?

Let’s say a 35-year old wants to buy LIC New Jeevan Anand policy for Rs 20 Lakh sum assured and for a 25-year tenure. I used the LIC Premium Calculator on one of the sales websites of LIC (link) and here is the annual premium illustration:

Related Reading – What is Premium of LIC New Jeevan Anand Plan?

As per the above image, you need to pay approx. Rs 93,000 per year for 25 years. For this, you will get a Rs 20 lakh life insurance coverage.

Now let’s see what all benefits the policyholders are entitled to:

• Sum Assured: In this example, Rs 20 Lakh is the guaranteed amount that will be paid after the policy tenure of 25 years.
• Simple Revisionary Bonus: The maturity payment, in addition to sum assured above, will also have a non-guaranteed part. This is called Simple Reversionary Bonus that is part of LIC Bonus Rates announced by LIC at the end of each year and is based on the sum assured. This bonus gets added every year (accrues) but is and paid out (without compounding or any accrued interest) at the end of the policy term or maturity, along with the Sum assured.
• Final Additional Bonus – In addition to the above two, Final Additional Bonus (which is also not guaranteed but generally been paid each year in past) may also be declared under the policy in the year when the policy matures or there is death claim. The Final Additional Bonus (FAB) is paid only once in the policies. Final Additional Bonus shall not be payable under paid-up policies.

Let’s calculate LIC New Jeevan Anand Returns now.

Here is what you get on maturity after 25 years:

• Sum Assured – Guaranteed Rs 20 Lakh in Sum Assured
• Simple Revisionary Bonus – To estimate the simple revisionary bonus component, I have taken LIC’s last years’ declared bonus and assumed that it will remain at least same more or less around the next 25 years. In reality, this component may be higher but most probably, it might go lower as well as things have changed after LIC IPO and shareholders interest also need to be looked at and not just policyholders. Easier said than done but that is how it is expected to play out. So looking at latest LIC Bonus Rates announced (link), we find that the bonus rate is Rs 46 per thousand of sum assured. So for a Rs 20 lakh policy, this comes to Rs 92,000 each year. This is calculated as = 46/1000 * Rs 20 lakh. If we assume that this is the average bonus that will be declared each year, then in 25 years, this will amount to Rs 23 lakh in Simple Revisionary Bonus (calculated as 25 years x Rs 92,000 per year)
• Final Additional Bonus – Now this is a bit tricky. We need to guess what will happen 25 years down the line. So let’s try 3-4 different FAB figures to see how it impacts returns. Let’s say LIC decides to declare Final Additional Bonus of Rs 200 per 1000 of SA, OR Rs 400 per 1000 of SA, OR Rs 600 per 1000 of SA. So in each case, the FAB will be Rs 2 lakh, Rs 4 lakh and Rs 6 lakh respectively.

So the total of these 3 values, comes to Rs 20 lakh (Sum Assured) + Rs 23 lakh (Simple Revisionary Bonus) + Rs 2/4/6 lakh (Final Additional Bonus) = Rs 45-49 lakh depending on the final bonus declared in the year of policy maturity.

Note 1 – All LIC Policies may not offer all the above 3 bonus components Each LIC policy has its own set of features and bonuses.

Note 2 – While LIC has been here for decades and has been paying bonuses each year, please remember that bonus declaration is not guaranteed. So rate of past bonuses should not be considered as a given and guaranteed and these may or may not repeat in future. More so as LIC is now a listed company after the mega LIC IPO. The agents won’t tell you that as they need to sell you policies and for that, they need to promise you everything. I hope you understand.

Related Reading – How to Calculate LIC Bonus Amount on your LIC policies?

LIC New Jeevan Anand Return Calculation using MS Excel

Now we shall see that using the above calculated values, How to calculate Rate of Return on maturity from an LIC New Jeevan Anand life insurance policy?

Let’s now understand the procedure to calculate return on life insurance LIC plan with the example of LIC New Jeevan Anand, using a very simple function of MS Excel’s – IRR Function (that is used to calculate the Internal Rate of Return).

I have created a very very basic LIC New Jeevan Anand Returns Calculator which you can download as well. This is just for general information (and illustrating) and should not be used as 100% accurate results. You can download it using the link below –

Here are the results of our example –

The LIC New Jeevan Anand return (IRR) results depend on the chosen figures for policy tenure, sum assured, annual premium, simple revisionary bonus rate and final additional bonus rates.

In the example above, LIC New Jeevan Anand offers Sum Assured + Simple Reversionary Bonuses (payable yearly) + Final Additional bonus (FAB : one time) at the time of maturity, and that is what is incorporated in this basic calculator.

If you fill up the figures correctly in the yellow cells in the Jeevan Anand maturity calculator, it will calculate and how you the Maturity Benefit Calculations of LIC New Jeevan Anand Life Insurance Plan in 2023.

In the image above, the IRR for this example comes to 5.86%. The actual figure for you (and for different combination of policy term, bonus rates, etc.) will either be lower or slightly higher.

So that is What’s your return from LIC New Jeevan Anand policy are and that is how to do Life Insurance New Jeevan Anand Plan Return Calculation using a LIC Maturity calculator shared above.

If you calculate the returns of LIC New Jeevan Anand correctly and without being influenced by impractical promises of LIC agents, it will become very clearly that LIC New Jeevan Anand offers low returns. And this is shown in IRR calculations very clearly. The policy brochure illustrations are just samples and not real returns. You may or may not get it.

So the low life cover and poor returns (5-6%) is the major reasons why investors of LIC New Jeevan Anand lose faith in the policy and contemplate cancelling or surrendering the policy before maturity.

You may counter this that it also offers life insurance coverage. Not just during policy tenure but also after maturity (to nominees). While that is true, you need to think without being biased by what you have heard from agents.

While most LIC policyholders get attracted to endowment plans because of the idea of ‘getting some money back from insurance on maturity and survival (as term insurance provides no return), the reality is that you can generate far superior returns if you keep investment and insurance separate. Imagine what would be the outcome if instead of LIC policy you invested elsewhere for better returns (say mutual funds giving average 10-11% returns historically though not guaranteed)? As for life insurance, you can buy simple term plans very cheaply any day.

As we move towards ending this article, here is one thing that you should ensure – Whatever you decide to do or not, please don’t forget purchasing a term life insurance for yourself. You owe it your family and hence, make this decision as soon as possible if you don’t have one.

In general, it is best to avoid traditional endowment plans like LIC New Jeevan Anand as these neither provide good returns or large life cover. Whether you want to purchase one even after reading all this or you are thinking of surrendering your LIC Jeevan Anand in 2023 is something that you need to think and decide for yourself.

Related Reading – How to Surrender LIC Policy Before Maturity?

Hopefully, you would have found this writeup on How to Calculate LIC New Jeevan Anand Returns (2023) in India useful. I have tried to make it as simple to understand as I could and have used LIC Jeevan Anand Maturity Calculator to show the LIC Jeevan Anand Returns. If you have doubts about what to do then please get in touch with a SEBI registered Investment Advisor to help you plan your finances properly.

Disclaimer – The views expressed above should not be considered professional investment advice or advertisement or otherwise. The article is for general educational purposes only. The readers are requested to take into consideration all the risk factors including their financial condition, suitability to risk-return profile and the likes and take professional investment advice before taking any financial decisions or actions which may have financial implications now or in future.