Understanding LIC Jeevan Labh Plan 936: Limited Premium Savings Framework
LIC Jeevan Labh (Plan 936) is one of the highest-selling limited premium paying, participating, non-linked endowment assurance plans issued by the Life Insurance Corporation (LIC) of India. Designed specifically to combine aggressive wealth accumulation with substantial tax-free life cover, Plan 936 is structured for parents, professionals, and long-term savers seeking a secure asset class. Unlike standard endowment policies where premiums are payable throughout the term, Jeevan Labh features a shortened premium payment schedule, allowing investors to enjoy continuous participating bonus accruals without ongoing payment liabilities.
The cornerstone of Plan 936 is its participating structure. This enables the policyholder to receive dividends in the form of Reversionary Bonuses declared annually by LIC, complemented by a substantial Final Additional Bonus (FAB) at maturity. By limiting the premium payment years while maintaining active growth for up to 25 years, Jeevan Labh yields an exceptionally high compound benefit relative to total premiums paid.
Rigid Policy Terms & Premium Paying Term (PPT) Combinations
LIC Jeevan Labh does not feature customizable terms; instead, it is bounded by three strict configurations tailored to maximize compounding efficiencies. Review the eligibility requirements below:
| Policy Term (PT) | Premium Paying Term (PPT) | Minimum Entry Age | Maximum Entry Age | Max Maturity Age |
|---|---|---|---|---|
| 16 Years | 10 Years | 8 Years (Completed) | 59 Years | 75 Years |
| 21 Years | 15 Years | 8 Years (Completed) | 54 Years | 75 Years |
| 25 Years | 16 Years | 8 Years (Completed) | 50 Years | 75 Years |
Core Actuarial Mathematics of Plan 936
The compounding returns of LIC Jeevan Labh are modeled on three pillars: Sum Assured, Participating Annual Reversionary Bonuses, and the Final Additional Bonus. The calculator computes these values through the following actuarial formulas:
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Vested Reversionary Bonus: Declared per ₹1,000 Sum Assured annually. Our model utilizes conservative LIC historical standards: ₹40 p.a. for a 16-year term, ₹44 p.a. for a 21-year term, and ₹47 p.a. for a 25-year term.
Formula: Vested Bonus = (Basic Sum Assured × Bonus Rate ÷ 1000) × Policy Term -
Final Additional Bonus (FAB): A one-time participating dividend declared at the termination of the contract, rewarded to policyholders for remaining invested. For premium terms, FAB scales significantly for policy sizes ₹5,00,000 and above.
Formula: FAB Amount = (Basic Sum Assured × FAB Rate ÷ 1000) - Limited Term Compounding Edge: During the non-premium paying years (e.g., Year 11-16 under a 16-year term), no premiums are paid, but the policy value continues to grow. Vested bonuses are accrued for the complete 16, 21, or 25 years, maximizing compounding.
Maturity & Death Benefit Mathematics
The payout structures under Plan 936 are designed with a high level of security. They are computed as follows:
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Maturity Benefit (Survival Payout): Payable upon surviving the complete policy term, provided all premiums have been cleared.
Payout = Basic Sum Assured + Accrued Reversionary Bonuses + Final Additional Bonus (FAB) -
Death Benefit (Risk Cover): Payable to the registered nominee in the event of the policyholder's demise during the term.
Payout = Sum Assured on Death + Accrued Reversionary Bonuses + Final Additional Bonus (FAB)
*Sum Assured on Death is defined as the higher of the Basic Sum Assured or 7 times the annualized premium.
Tax Exemption & Section 10(10D) Safety
One of the most compelling advantages of LIC Jeevan Labh (Plan 936) is its dual tax savings status, qualifying it as a highly tax-efficient savings asset:
- Premium Deductions (Section 80C): Premiums paid towards LIC Plan 936 are fully deductible from taxable income up to a limit of ₹1,50,000 per financial year under Section 80C of the Income Tax Act.
- 100% Tax-Free Maturity Payout (Section 10(10D)): The entire final maturity payout—including the basic Sum Assured, accumulated reversionary bonuses, and Final Additional Bonus—is 100% tax-free at receipt. This remains untouched by income slabs, making the effective yield far superior to taxable products like fixed deposits or corporate bonds.
LIC Jeevan Labh Plan 936 - Frequently Asked Questions
Q1: What are the Policy Term and PPT options under Jeevan Labh?
Jeevan Labh features three designated configurations: 16-year term with a 10-year PPT, 21-year term with a 15-year PPT, and a 25-year term with a 16-year PPT. You cannot customize or combine other terms.
Q2: What is the minimum Sum Assured required for purchase?
The minimum basic Sum Assured is strictly ₹2,00,000. There is no maximum Sum Assured limit, which allows high-net-worth individuals to construct large tax-free wealth corpuses.
Q3: Is the maturity payout taxable under GST or Income Tax?
No, the maturity payout is completely exempt from Income Tax under Section 10(10D). Furthermore, there is no GST deducted on maturity payouts. GST (18%) is only applicable on the risk cover premium portion during the paying term.
Q4: What is the minimum and maximum entry age for Plan 936?
The minimum entry age is 8 years completed. The maximum entry age varies depending on the term: 59 years for a 16-year policy term, 54 years for a 21-year policy term, and 50 years for a 25-year policy term.
Q5: Can I surrender my policy before the policy term completes?
Yes. A policyholder can surrender the policy at any point provided at least 2 full years' premiums have been paid. Upon surrender, a Guaranteed Surrender Value (GSV) along with a Special Surrender Value (SSV) is calculated, and the higher amount is paid out.
Q6: How does the Proposer PWB rider help under Jeevan Labh?
If you purchase Jeevan Labh for a child (8 years or older) and attach the Premium Waiver Benefit (PWB) Rider, all future premiums are completely waived by LIC in the event of the proposer's (parent's) death. The policy continues to grow, and the child receives the full tax-free maturity benefit as planned.