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Should guaranteed returns be the only factor when choosing an investment?
Is the LIC Nav Jeevan Shree Plan the right choice for risk-averse investors?
Can LIC Nav Jeevan Shree help you achieve your long-term financial goals?
This article examines its key features, advantages and drawbacks, supported by a detailed illustration.
Table of Contents
1. What is the LIC Nav Jeevan Shree?
2. What are the features of the LIC Nav Jeevan Shree?
3. Who is eligible for the LIC Nav Jeevan Shree?
4. What are the benefits of the LIC Nav Jeevan Shree?
5. Grace Period, Discontinuance and Revival of the LIC Nav Jeevan Shree
6. Free Look Period for the LIC Nav Jeevan Shree
7. Surrendering the LIC Nav Jeevan Shree
8. What are the advantages of the LIC Nav Jeevan Shree?
9. What are the disadvantages of the LIC Nav Jeevan Shree?
10. Research Methodology of LIC Nav Jeevan Shree
Benefit Illustration – IRR Analysis of LIC Nav Jeevan Shree
11. LIC Nav Jeevan Shree Vs. Other Investments
LIC Nav Jeevan Shree Vs. Pure-term + Equity Mutual Fund
12. Final Verdict on LIC Nav Jeevan Shree
1. What is the LIC Nav Jeevan Shree?
LIC Nav Jeevan Shree is a Non-Par, Non-Linked, Life, Individual, Savings plan.
This is a Limited Premium Endowment plan with Guaranteed Additions.
The Premium Payment Terms (PPTs) available under the product are 6 years, 8 years, 10 years, 12 years, and 15 years.
2. What are the features of the LIC Nav Jeevan Shree?
- Guaranteed additions are provided as a percentage of the Tabular Annual Premium at the end of each policy year.
- Choice of two Sum Assured on Death options allows you to select the level of life cover based on your needs.
- Maturity and death benefits can be received in instalments, offering greater flexibility.
- Additional protection can be added through rider benefits by paying an extra premium.
- Higher Sum Assured attracts additional incentives.
- Existing policyholders and nominees/beneficiaries of deceased policyholders may receive special incentives.
- A loan facility is available to meet liquidity requirements during the policy term.
3. Who is eligible for the LIC Nav Jeevan Shree?
| Minimum Age at entry | 30 days (completed) |
| Maximum Age at entry | 60 years (nearer birthday) for PPT 6, 8 and 10 years 59 years (nearer birthday) for PPT 12 years 57 years (nearer birthday) for PPT 15 years |
| Minimum Age at maturity | 18 years (completed) |
| Maximum Age at maturity | 75 years (nearer birthday) |
| Premium Payment Term (PPT) | 6, 8, 10, 12 and 15 years |
| Minimum Policy Term | 10 years for PPT 6 years 15 years for PPT 8 and 10 years 16 years for PPT 12 years 18 years for PPT 15 years |
| Maximum Policy Term | 20 years for all PPTs |
| Minimum Sum Assured | ₹ 5,00,000 |
| Maximum Basic Sum Assured | No Limit, subject to Board-approved Underwriting Policy. |
| Basic Sum Assured Multiples | The Basic Sum Assured shall be in multiples of Rs. 10,000/-. |
4. What are the benefits of the LIC Nav Jeevan Shree?
a. Death Benefit
The proposer shall have an option to choose “Sum Assured on Death” as per the two options available.
Option I:
Higher of:
- 7 times of (Tabular Annual Premium multiplied by Modal adjustment factor); or
- Basic Sum Assured
Option II:
Higher of:
- 10 times of (Tabular Annual Premium multiplied by Modal adjustment factor); or
- Basic Sum Assured
b. Maturity Benefit
On Life Assured surviving the stipulated Date of Maturity, provided the LIC Nav Jeevan Shree Plan policy is in-force, “Sum Assured on Maturity” along with accrued Guaranteed Additions for in-force policy, shall be payable; where “Sum Assured on Maturity” is equal to the Basic Sum Assured.
c. Guaranteed Additions
Under an in-force policy (in which all the due premiums have been paid), the Guaranteed Additions during the policy term shall accrue at the end of each policy year.
The Rate of Guaranteed Additions for an in-force policy shall be as under:
| Policy Term (in years) | Rate of Guaranteed Additions (as a % of Total Tabular Annual Premium in respect of Premiums Paid) |
| 10 to 13 | 8% |
| 14 to 17 | 8.50% |
| 18 to 20 | 9% |
5. Grace Period, Discontinuance and Revival of the LIC Nav Jeevan Shree
Grace Period
A grace period of 30 days shall be allowed for payment of yearly or half-yearly or quarterly premiums and 15 days for monthly premiums from the date of First Unpaid Premium.
Discontinuance
If less than one full year’s premium(s) has been paid in respect of this policy and any subsequent premium is not duly paid, all the benefits under this policy shall cease after the expiry of the grace period from the date of First Unpaid Premium, and nothing shall be payable
If, after at least one full year’s premium(s) has been paid and any subsequent premiums are not duly paid, on completion of first policy year, this policy shall not be wholly void, but shall subsist as a paid-up policy till the end of policy term.
Revival
A lapsed policy can be revived, within a period of 5 consecutive complete years from the date of First Unpaid Premium and before the Date of Maturity, as the case may be.
6. Free Look Period for the LIC Nav Jeevan Shree
If the Policyholder is not satisfied with the “Terms and Conditions” of the LIC Nav Jeevan Shree Plan policy, the policy may be returned to the Corporation within 30 days from the date of receipt of the electronic or physical mode of Policy Document, whichever is earlier.
7. Surrendering the LIC Nav Jeevan Shree
The LIC Nav Jeevan Shree Plan policy can be surrendered by the policyholder after completion of the first policy year provided at least one full year’s premium(s) has been paid.
However, the policy shall acquire Guaranteed Surrender Value on payment of at least two full years’ premiums and Special Surrender Value after completion of the first policy year provided one full year’s premium(s) has been paid.
On surrender of an in-force or a paid-up policy, the Corporation shall pay surrender value higher of
Guaranteed Surrender Value and surrender value of any accrued Guaranteed Additions; or
Special Surrender Value.
8. What are the advantages of the LIC Nav Jeevan Shree?
- Rider benefits: Additional riders can be added to the base policy for enhanced protection.
- Settlement Option: Maturity or death benefits can be received in instalments over 5, 10, or 15 years instead of as a lump sum.
- Flexible premium payment: Premiums can be paid yearly, half-yearly, quarterly, or monthly.
- High Sum Assured incentive: Higher Basic Sum Assured may qualify for additional incentives.
- Loan facility: A loan can be availed against the policy, subject to the available surrender value.
9. What are the disadvantages of the LIC Nav Jeevan Shree?
- Although the maturity benefit is guaranteed, the overall returns are modest and may not be attractive.
- The Sum Assured may be inadequate to provide sufficient financial protection for the family.
10. Research Methodology of LIC Nav Jeevan Shree
The LIC Nav Jeevan Shree Plan offers guaranteed benefits along with guaranteed additions at the end of the policy term.
However, these benefits are payable only on maturity or upon the policyholder’s death.
Therefore, before investing, it is important to evaluate the actual returns to understand the plan’s value as an investment.
Benefit Illustration – IRR Analysis of LIC Nav Jeevan Shree
Consider the illustration given in the policy brochure: A 30-year-old male opts for the LIC Nav Jeevan Shree with a Basic Sum Assured of ₹10 lakh for a 20-year term and pays an annual premium of ₹1,19,500 for 8 years.
The death benefit starts at approximately ₹10.11 lakh and increases over the policy term as guaranteed additions accumulate.
| Male | 30 years |
| Base Sum Assured | ₹ 10,00,000 |
| Policy Term | 20 years |
| Premium Paying Term | 8 years |
| Annualised Premium | ₹ 1,19,500 |
At maturity, the policyholder receives approximately ₹25.17 lakh, including guaranteed additions.
However, the IRR works out to just 5.99% as per the LIC Nav Jeevan Shree Plan maturity calculator, which is relatively low compared with typical debt investment options.
| Age | Year | Annualised premium / Maturity benefit | Death benefit |
| 30 | 1 | -1,19,500 | 10,11,496 |
| 31 | 2 | -1,19,500 | 10,34,488 |
| 32 | 3 | -1,19,500 | 10,68,975 |
| 33 | 4 | -1,19,500 | 11,14,959 |
| 34 | 5 | -1,19,500 | 11,72,439 |
| 35 | 6 | -1,19,500 | 12,41,414 |
| 36 | 7 | -1,19,500 | 13,21,885 |
| 37 | 8 | -1,19,500 | 14,13,852 |
| 38 | 9 | 0 | 15,05,820 |
| 39 | 10 | 0 | 15,97,787 |
| 40 | 11 | 0 | 16,89,754 |
| 41 | 12 | 0 | 17,81,721 |
| 42 | 13 | 0 | 18,73,688 |
| 43 | 14 | 0 | 19,65,656 |
| 44 | 15 | 0 | 20,57,623 |
| 45 | 16 | 0 | 21,49,590 |
| 46 | 17 | 0 | 22,41,557 |
| 47 | 18 | 0 | 23,33,524 |
| 48 | 19 | 0 | 24,25,492 |
| 49 | 20 | 0 | 25,17,459 |
| 50 | 25,17,459 | ||
| IRR | 5.99% |
The modest returns are mainly because a significant portion of the premium goes towards providing life insurance cover, leaving less to generate investment growth.
Thus, the LIC Nav Jeevan Shree may not be an efficient choice either for adequate life insurance protection or for wealth creation.
11. LIC Nav Jeevan Shree Vs. Other Investments
The rigid cash-flow structure and modest returns make the LIC Nav Jeevan Shree Plan less attractive to many investors.
A better way to assess the plan is to compare its returns with alternative investment strategies using the same illustration.
LIC Nav Jeevan Shree Vs. Pure-term + Equity Mutual Fund
Under the LIC Nav Jeevan Shree Plan, the death benefit increases every year through guaranteed additions.
In contrast, a pure-term insurance policy provides a fixed life cover throughout the policy term.
For example, a 20-year term plan with ₹25 lakh coverage—close to the highest Sum Assured in the earlier illustration—may cost around ₹18,100 per year.
This leaves approximately ₹1,01,400 annually to invest based on your risk appetite.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 25,00,000 |
| Policy Term | 20 years |
| Premium Paying Term | 5 years |
| Annualised Premium | ₹ 18,100 |
| Investment | ₹ 1,01,400 |
Since the term insurance premium is payable only for the first 5 years, the remaining ₹1,19,500 per year can be invested for the next 3 years.
Conservative investors could consider debt instruments such as PPF, while growth-oriented investors could consider equity mutual funds.
For this comparison, we consider an equity mutual fund.
| Age | Year | Term Insurance premium + Equity Mutual Fund | Death benefit |
| 30 | 1 | -1,19,500 | 25,00,000 |
| 31 | 2 | -1,19,500 | 25,00,000 |
| 32 | 3 | -1,19,500 | 25,00,000 |
| 33 | 4 | -1,19,500 | 25,00,000 |
| 34 | 5 | -1,19,500 | 25,00,000 |
| 35 | 6 | -1,19,500 | 25,00,000 |
| 36 | 7 | -1,19,500 | 25,00,000 |
| 37 | 8 | -1,19,500 | 25,00,000 |
| 38 | 9 | 0 | 25,00,000 |
| 39 | 10 | 0 | 25,00,000 |
| 40 | 11 | 0 | 25,00,000 |
| 41 | 12 | 0 | 25,00,000 |
| 42 | 13 | 0 | 25,00,000 |
| 43 | 14 | 0 | 25,00,000 |
| 44 | 15 | 0 | 25,00,000 |
| 45 | 16 | 0 | 25,00,000 |
| 46 | 17 | 0 | 25,00,000 |
| 47 | 18 | 0 | 25,00,000 |
| 48 | 19 | 0 | 25,00,000 |
| 49 | 20 | 0 | 25,00,000 |
| 50 | 51,18,844 | ||
| IRR | 10.53% |
The equity investment could grow to approximately ₹57.08 lakh before tax. After capital gains tax, the value could be around ₹51.18 lakh, translating to a post-tax IRR of 10.53%.
| Equity Mutual Fund Tax Calculation | |
| Maturity value after 20 years | 57,08,608 |
| Purchase price | 8,65,500 |
| Long-Term Capital Gains | 48,43,108 |
| Exemption limit | 1,25,000 |
| Taxable LTCG | 47,18,108 |
| Tax paid on LTCG | 5,89,763 |
| Maturity value after tax | 51,18,844 |
This alternative delivers significantly higher returns than the LIC Nav Jeevan Shree Plan.
The comparison highlights the potential advantage of keeping insurance and investment separate—using term insurance for protection and investments for wealth creation—thereby improving the potential to achieve long-term financial goals.
12. Final Verdict on LIC Nav Jeevan Shree
The LIC Nav Jeevan Shree Plan is an endowment policy that combines life insurance with a maturity benefit, with both death and maturity benefits including guaranteed additions.
While guaranteed benefits may appear attractive, the Sum Assured is inadequate to provide meaningful financial protection for a family, and the maturity benefit may not be sufficient to meet major financial goals.
The return analysis also highlights the plan’s low-yield nature.
To achieve long-term financial goals, investments need to generate returns that can outpace inflation.
Despite its guaranteed benefits, the LIC Nav Jeevan Shree offers relatively modest returns, making it less suitable for both insurance protection and long-term wealth creation and it also has a high agent commission.
A more effective approach is to choose a pure-term insurance policy with adequate life cover based on your financial obligations and your family’s future needs.
As your income and responsibilities change, you can review and increase your coverage when required.
For wealth creation, invest separately through a well-diversified portfolio aligned with your risk profile and financial goals.
Do Quora, Facebook, and Twitter have the final say when it comes to financial advice?
Before investing, assess your risk tolerance, time horizon, and financial objectives. A Certified Financial Planner (CFP) can help you choose appropriate insurance and investment products based on your individual financial needs.
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