LIC Premium Calculation – How is Your Premium Calculated?

How LIC Calculates Your Premium

LIC premium calculation might seem complex, but it follows a systematic formula. Understanding this helps you verify your premium and make better decisions.

Step 1: Tabular Premium Rate

LIC publishes tabular rates per ₹1,000 Sum Assured. These rates vary by age and policy term. For example, for Plan 914, age 30, 20-year term: Tabular rate = ₹58.30 per ₹1,000 SA.

Step 2: Sum Assured Rebate

• SA ≥ ₹2,00,000: Rebate of ₹2 per ₹1,000 SA
• SA ≥ ₹5,00,000: Rebate of ₹3 per ₹1,000 SA

Step 3: Mode Rebate

• Yearly payment: -2% rebate on basic premium
• Half-yearly: -1% rebate
• Quarterly: No rebate
• Monthly: +2% loading (higher premium)

Step 4: Rider Charges (if any)

Accident Benefit Rider: ₹1 per ₹1,000 SA per year. Premium Waiver: ₹0.5 per ₹1,000 SA.

Complete Formula

Annual Premium = (Tabular Rate - SA Rebate + Riders) × (SA/1000) × Mode Factor

Worked Example

Plan 914, Age 30, ₹10L SA, Yearly payment, No riders: = (58.30 - 3.00) × (1000000/1000) × 0.98 = 55.30 × 1000 × 0.98 = ₹54,194 approximately. With 0% GST = same amount!

Don't calculate manually — use our free premium calculator which applies all rebates automatically.