LIC Jeevan Pragati Plan (Table No.838) – Features, Review & Returns Calculation

LIC (Life Insurance Corporation of India)has launched a new Endowment plan called LIC Jeevan Pragati (Plan no 838). This plan is available for purchase from 3rd February, 2016 onwards. This new endowment assurance plan is a non-linked, with-profits and savings cum protection plan.

The main feature of this Jeevan Pragathi plan is the ‘sum assured on death’ (part of death benefit) automatically increases after every five years during the term of the policy.

LIC’s New Plans in 2016

LIC of India has already launched two new schemes in 2016;

  • LIC Jeevan Labh – New Endowment Plan : This plan has been launched on 4th January, 2016. Click hereto read detailed review on Jeevan Labh.
  • LIC Jeevan Shikhar Plan : This is a single premium endowment plan and has been launched on 11th January, 2016. Click here to read detailed review on Jeevan Shikhar plan.

So, LIC’s Jeevan Pragati would be the third new plan of LIC for the year 2016.

Key Features & Eligibility Conditions of LIC Jeevan Pragati Plan

The main features of this new endowment plan are as below;

  • Minimum Basic Sum Assured (payable on maturity) : Rs. 1,50,000/-
  • Maximum Basic Sum Assured : No Limit(Maturity Sum Assured shall be in multiple of Rs. 10,000/- only)
  • Minimum Policy Term : 12 years
  • Maximum Policy Term : 20 years
  • Minimum Age at entry for Life Assured: 12 years (completed)
  • Maximum Entry Age : 45 years (nearer birthday)
  • Maximum Age at Maturity for Life Assured : 65 years
  • Premium payment mode : Yearly, half-yearly, quarterly & monthly.
  • Accidental Death & Disability Benefit Rider is available on payment of additional premium.
    • Minimum Accident Benefit Sum Assured is Rs 10,000
    • Maximum Accident Benefit Sum Assured is an amount equal to the Basic Sum Assured subject to the maximum of Rs 1 cr.
    • Minimum entry age for the rider is 18 years.
  • Agent’s commission for policy term 12 to 14 years is 20% in first year and 7.5% in 2nd & 3rd year. The first year agents’ commission would be 25% on a 15 year policy term.

Benefits under LIC’s Jeevan Pragati policy

  • Death Benefit under Jeevan Pragati Plan :On death of the Life Assured during the policy term, the Death Benefit which is ‘Sum Assured on Death’ + Vested Simple Reversionary Bonuses + Final additional bonus, if any, shall be payable to the nominee. The Sum assured on death automatically increases every five years.Where “Sum Assured on Death” is defined as the higher of a)10 times of annualized premium (or) b)Absolute amount assured to be paid on death, which is as under;

i) During the first five policy years : 100% of the Basic Sum Assured.

ii) During 6th to 10th policy years : 125% of the Basic Sum Assured.

iii) During 11th to 15th policy years : 150% of the Basic Sum Assured.

iv) During 16th to 20th policy years : 200% of the Basic Sum Assured.

  • Maturity Benefit payable under LIC Jeevan Pragati Policy : On survival to the end of the policy term, the maturity benefit which is ‘Sum Assured on Maturity’ + Simple Reversionary Bonuses + Final Additional bonus (FAB) if any, shall be payable to the policy holder.Sum Assured on Maturity is equal to Basic Sum Assured.
  • Final Additional Bonus is not payable on PAID-UP policies.
  • The date of commencement of risk under Jeevan Pragati plan will be immediately from the date of issuance of policy.

Illustration of LIC Jeevan Pragati Plan

LIC Jeevan Pragati Maturity illustration example pic

Mr. Bhandari(30 years) purchases LIC Jeevan Pragati insurance policy with a Sum Assured of Rs 10 Lakh . He opts for 20 years as the policy term.

Death Benefit in Bhandari’s case : If Mr Bhandari passes away, the Death Benefit which is the total of ‘Sum Assured on Death‘ + Vested Simple Reversionary Bonuses + Final additional bonus, if any, shall be payable to the nominee.

The risk cover (Sum assured on Death) depends on the completed no of policy years. Absolute amount assured to be paid on death, will be as below;

i) During the first five policy years : 100% of the Basic Sum Assured.

ii) During 6th to 10th policy years : 125% of the Basic Sum Assured.

iii) During 11th to 15th policy years : 150% of the Basic Sum Assured.

iv) During 16th to 20th policy years : 200% of the Basic Sum Assured.

Maturity Benefit : Suppose if Mr.Bhandari survives till the policy term maturity, the maturity benefit payable to him will be:-

  • Maturity amount = Rs 10 Lac + Bonus + Final Additional Bonus (if any)

LIC Jeevan Pragathi Plan & Calculation of Returns on maturity

LIC Jeevan Pragati Maturity amount benefit calculation returns calculation with bonuses FAB pic

I have calculated the returns on maturity using IRR (Internal Rate of Return) function of MS Excel. In the above example, policy duration is 20 years . At the beginning of 21st year (policy maturity), the policy holder will get around Rs 3.36 Lakh. I have assumed Rs 42 per Rs 1000 Sum assured as Yearly bonus and Rs 400 as Final Additional Bonus (FAB). The FAB depends on the quantum of sum assured and the policy tenure.

So, the expected returns from LIC Jeevan Pragati insurance plan can be in the range of 6% to 7%.

My Opinion on LIC’s Jeevan Pragati Plan

Should you buy LIC Jeevan Pragati policy? Is this a good plan?

Generally, the returns from ‘Endowment Plans’ can be somewhere in the range of 5% to 7 %, which does not help in achieving your long-term goals, considering the prevailing rate of inflation in a growing economy like ours . The returns are very much dependent on the bonus rates (Simple Reversionary and Final Additional Bonuses) that LIC declares every year.

Kindly stay away from these kind of plans if you are expecting higher Rate of Returns. Do not buy this plan just because it offers you Tax Saving benefits under Section 80c. There are better Tax Saving Investment options available in the market. For example, PPF (Public Provident Fund) will can offer you better returns than these kind of Endowment Plans (if safety of capital and tax benefits are your priority). You may read my article on Term insurance Vs Endowment plans to get more idea about the importance of having adequate life cover and why Small Savings Scheme like PPF can be a better option than traditional life insurance plans (such as money-back / endowment plan).

I am sure this plan will be aggressively promoted based on ‘increasing risk cover’ feature. If your objective is to get life cover, consider buying a term plan and review your risk cover requirements based on your changing economic profile. You may also consider Term plans like ICICI’s iProtect Smart Term Insurance plan (or) SBI Life’s e-Shield term plan which offer increasing life cover options at key stages of your life.

(Kindly note that this post is based on the limited information that is available on net. The above details can be changed.)

You may like reading below articles;

  • ganesh Agrawal says:

    Hi Sreekanth,

    My DOB is Mar 1974. I want to purchase a Term plan for Rs. 1 Crore. I file ITR for 3.6 Lakh. Could you please suggest some good term plan. I want the insurance co. to pay to my family in case of any mishappening to me.

    Please suggest some good plan.

  • Nitram says:

    Hey Mr S, I have been reading with interest some of your posts on Life Insurance. Off late as I receive my maturity benefits of a couple of my policies i did feel the returns to be minimum. While I am not greedy, i do like a fair return.
    I am currently looking to take a life cover alongwith Tax benefit for my 22 yr old daughter who has just started her career.

    I invest in sips and ppf and debt too (Post office). Just thought I will have one of this for the portfolio too. Sometimes i do wonder with returns in the region of 7 what are we doing. Can you suggest something asap. Term or other products. I prefer LIC (don’t ask me why, just don’t know – maybe i want to help this agent lady to help her family )

    • Dear Nitram,
      If she does not have any dependents and/or does not have any financial liabilities, she may post-pone buying a life cover.
      But can try to buy a Health plan with high Sum Assured.
      Best portals to compare health plans.
      Top online term insurance plans.

      • Nitram says:

        K thanks for your revert. I was considering a Term plan after reading links suggested by you.

        As regards health plans. Her employers do have a cover for her I suppose. I too have taken a health policy for her, may be the coverage might not be very high though.

        Honestly, these health policies make you run in circles very confusing and you keep getting calls from them to increase or what not. very difficult to understand i tell you. My exp is with ICICI. so i am very wary of them.

        I will go through your suggested links on mediclaim. what would u suggest increase her current coverage in the policy i hold for her or buy a new one. Increase i suppose. I renewed the policy in June 2016 (once in two years premium). I am so scared to call the icici guys for this,they will drive me mad with a log of stuff i do not follow ;(

  • Amod Jha says:

    You are doing a very good job.All the best.
    I have two doubts in LIC Jeevan Pragati Plan. If I have talen this plan in 2016 and I die in 2017 or 18 so shall I eligible for Final Addition bonus.(As per my knowledge FAB is paid at the end of the policy term). My second confusion is one line which is written on LIC site and that is “Death benefit shall not be less than 105% of all the premiums paid as on date of death”

    • Dear Amod,
      May I know why would you like to buy this plan?
      FAB is part of Death benefit in this plan. If LIC declares it then it can be received as part of the death benefit by the nominee.
      That is the minimum death benefit amount (105%).

  • sj says:

    Respected Sir,
    Which LIC Policy is best suited for me at the age of 31 years?

    • Shreedhar says:

      It depends on how much can u pay monthly & at what age u want return of it..u can whatsapp me for taking policy..i’ll gve u best policy which suits u & according to ur conditions(7666713945)

  • Rahul says:

    Dear Shrikanth,

    Hi this is rahul here. I would like to know about the LIC policy which should give me a good maturity value in future. I dont have any policy yet. I would like to apply LIC policy for tax saving too.

    I have seen Jeevan Labh policy apart from that any other policy ?

    Kindly assist on the LIC policy.


  • Sudhakar Raman says:

    Dear Sreekanth,

    I am 38 year old and looking forward for life risks so I am searching best life insurance products,

    It will far better if the maturity of this is good for me / family.

    Please suggest the good plans.

    My goal is life security and financial security first

    Thanks in advance

  • Anil Bedre says:

    Hiii sir
    This is Anil. Last months I opened new policy of new jeevan anand (5lacs) for 25 years. My age is 31. I just want to know is it worth investing in new jeevan anand? Pls give me your suggestions for the same. And I have my PPF account also from last 5 years.

  • Himanshu says:

    Hi Friends, If any body need any suggestion regarding the insurance products or any clarification regarding the insurance plans or if you want to buy a insurance plan Please let me know. i am a insurance agent my phone number is 9990623116.

  • Rupali R. Mithbaokar says:

    Yet another opportunity for LIC agents to fool financial illiterates under the garb of “enhanced cover for same premium.”

    IRR of this product exceeds 7% due to assumption of FAB of 40% which I think is on a higher side and is not going to materialize. However, LIC has 20 years to play with it and public memory is very short.

    Secondly, bonus is assumed at rs 42 per 1000. (that too over 20 years period). In these 20 years, interest rates may come down substantially. (Beginning of this has already started). Suppose, in 20 years interest rates in India come down like in case of developed countries, what is the guarantee that LIC will pay at illustrated rate? Since this is a traditional plan and invests at least 85% funds in government securities and bonds.

    If even LIC does not guarantee future bonus rates, how can LIC agent push this product as “safe and guaranteed product from Govt of India?”

    Further, if one decides to surrender this policy even after 10-12 years, he/she will not get the accumulated balance till that year but a certain percentage of premiums paid. Hence, the gullible investor won’t be able to recover even invested principal amount. Then what is the use of such product which traps investors?

    • Dear Rupali,
      Yes, the FAB has been assumed at a higher level, so that we can prove that even if we consider higher bonuses the maximum returns from these kind of plans can be in the range of 6 to 7% only and that too for a period of 20 years or so.
      Plans like these, offered by LIC or any company, can be ignored.

      • Rupali R. Mithbaokar says:

        What is the scenario in western countries (US, UK and Europe)?

        Do traditional plans exist there? If yes, do people in those countries fall prey to such plans or are they being sold such pathetic products by agents?

        I am asking this question because it is assumed that people in western countries are considered to be financially savvy as compared to Indians and financial markets in those countries are also more matured at compared to India


        • Dear Rupali,
          As of now I don’t have the facts & figures pertaining to the life insurance sales in developed countries.
          But I believe that pure term insurance & pension oriented (annuities) plans are very popular.

    • Pallavi rahiskar says:

      Hi Sreekanth..
      Would u be able to recommend your best selection of term and endowment plans for a 34 yr old.. whos looking at term insurance 2 cr.. and endowment of about 1 or 2 cr… or a mixed plan? For about 25 or 35 yrs? He is salaried only till the next 20 yrs so any suggestions to make a way for the next 10 yrs would be welcomed

  • shravan says:


    I would like to clarify couple questions.

    1. What is the ideal ROI can we expect, if we invest Insurance/PPF/Mutual Funds/FD/ other RBI or IRDA Schemes. Can you please specify those plans/ Schemes ?

    2. If Jeevan Pragati is not a good means, Why IRDA Approved this ?

    • Dear shravan,
      1 – Kindly let me know your financial goals. Suggest you to pick products based on goals. Goal based investing is ideal.
      Kindly read:
      How to create a solid investment plan?
      Best investment options in India.
      2 – Any insurance plan has to meet the rules & guidelines laid out by IRDA. Whether the plan is good or bad Or ‘should one buy it’ is based on his/her investment requirements. If one is content with 5 to 7% returns, he/she can surely go ahead and invest in this plan. Personally, i will avoid investing in these kind of low-yielding traditional plans.

      • shravan says:


        Planning to invest 1 lakh per annum. Looking for 24% to 30% ROI per annum. Please suggest the low risk plans/Schemes.

        • Dear shravan,
          In most of the cases, risk is directly linked to returns. If your investment horizon is long-term, you got to accept the risks/volatility to get decent/inflation adjusted positive real rate of return.

  • Manoj Vyas says:

    Hi Sreekanth,

    First of all thanks for such a great blog. I am 30 Years old salaried person. I am looking for a insurance plan which give me life security, saving and tax benefits.

  • prassnna says:

    srikant sir
    suppose one is a risk averse investor and he adequately invested in PPF…so why it should n’t be a debt component , because the post tax return is good than FD or debt fund.correct me if said anything wrong. thanks !!!

    • Dear prassnna,
      We should keep in mind that the above returns (% of bonus rates) are not guaranteed. Also, the FAB rate depends on the quantum of Sum assured and policy tenure. If you observe the previous years’ FAB rates, they are very low if policy tenure is less than 20 years, and this can significantly pull down the Returns on maturity.
      In such a scenario, I am quite sure that the returns generated by Debt funds or PPF can be lot better than this plan’s returns. I have assumed FAB rates on the higher side 🙂

      Also, it depends on the quantum & % of allocation of investments. For example; if an individual has Rs 3 Lakh surplus, if he invests say Rs 1.5 Lakh in PPF (as opined by you) which is 50% of his surplus, then why should he invest in these type of plans?

      If someone has an adequate life cover through term insurance, invested adequately in Equity related instruments, invested in debt instruments like PPF and then he can consider in these type of plans provided he/she is content with 5% to 7% returns for a period of around 20 years.

  • Aditya says:

    My date of birth 15th July 1984, please suggest me a good lic insurance policy

  • Shaik says:

    Sir Lic jeevan pragathi plan is a good plan?

    • Dear Shaik..Kindly go through the article. If you already have adequate life cover and are happy to get 6 to 7% returns, you may buy this plan. Personally, I will ignore buying this one.

  • Raju Pal says:

    Another fruitless product from the bouquet of LIC. I wonder why is not Sreekanth Reddy made the Chair man of LIC or Irda…..? The country and its people would have been a lot benefitted if Reddy was made the Chairman of IRDA. Guys this year We have a Nobel Economics porspect in Reddy…….

  • dipak says:

    Hello Sir,

    I am interested in Jeevan Pragati, just wanted to check with you the maturity amount is tax free? and can I show this investment for saving tax yearly?

    • Dear Dipak..Yes, the maturity amount is tax exempted and you can claim the premiums u/s 80c.
      Consider investing in this plan if you are ok with 6 to 7% returns for say 20 year period.

  • manish shriwas says:

    Hello Sir,
    This is Manish Shriwas from Nagpur want to know that investing in mutual funds are under tax benefits (e.g.equity mf) or not. Also want to know about the locking period of MF or any MF without locking periods and of course i want to invest for long term.

  • himanshu says:

    pvt insurance plan is total fraud hdfc icici etc

    • Dear Himanshu..Why do you think plans offered by Pvt insurance companies are fraud? Kindly justify your viewpoint with facts.
      Also, suggest you to share your views on the ‘product’ being discussed here ie jeevan pragati.

  • Ankit says:

    Hello Sir,

    I am 30 Years old and till now i have not made any investment ,except the term plan. I am ready to invest around 1Lakh yearly for may be another 5 years. Could you please help me what will be the best investment option with higher returns with reasonable risk.I don’t own any loan and have no plans to buy a Flat.

    I am a believer in investing in Market (i may be wrong),instead of buying a flat with home loan.

  • Prakash says:

    Dear Shrikanth

    I have started investing HDFC Unit linked endowment plus ulip policy in year 2008 with INR 75,000 annual premium. After paying 3 years lock period the policy become paid up and i have stopped paying future premiums.
    Currently the investment grown amount is 3.4 lacks for the investment of 2.25 lacks after one time partial withdrawal made of INR 50,000/-.
    Till last month i used to do online fund switch option in order to keep funds grow better way by shifting during market volatility. Now suddenly HDFC has stopped online fund switch option and online portal policy shows “paid up termination” , When i called HDFC they informed me that online fund switch is stopped due to 5 years non payment of premiums.
    As per my knowledge if the funds is more than 150% that original premium policy will not laps and i have every right to do online switch since hdfc is deducting all the charges by reducing the relatively amount of units.

    My question is HDFC can stop online switch due to non payment of the premium & what is paid up termination status, can HDFC do change status of policy without notifying the customer?
    Also advice still it is better to stay until policy completes its term in 2018 or surrender when market goes upwards?

  • >
    Scroll to Top