How to calculate LIC Premium amount without tax using calculator

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Updated on Feb 14, 2024

Before you buy any insurance policy it is important to know the LIC installment premium without tax so that you have a fair idea of how much money you would be spending in this regard.

LIC (Life Insurance Corporation of India) is perhaps the biggest provider of insurance policies in India. It was created on 1st September 1956 by the government of India. It presently has over 290 million policyholders to be precise, which is a staggering number by any count. The GST (goods and services tax) regime has come into being from 1st July 2017. Term Life Insurance has been one of the many areas that have been affected by the same.

What Does Insurance Premium Mean?

An insurance premium is an amount of money paid periodically by an insurance policyholder to the insurance provider in exchange for the coverage offered by the policy. The premium amount depends on several factors and can be calculated using the LIC premium calculator.

How Does the LIC Insurance Plans Function?

LIC has a range of policies catering to different customers to suit their needs. As per your requirements, you can invest in savings policies, investment plans, child plans, and retirement plans. Depending on the plan and coverage, the premium also differs. The insured can receive maturity benefits at the end of the policy term.

Below are the benefits that are available under an LIC policy:

  • The policy sum assured,
  • Simple bonus accrued during the policy tenure, and
  • The final additional bonus

What is the Need to Know the LIC Installment Premium without Tax?

For many different kind of policies, the applicable tax rate has gone up by 3%. This has also caused a fair amount of confusion among many policyholders as they often do not know the tax rate that would be applied to their policies. They also want to know how much premium they would have to pay apart from the tax. So, you must know the installment premium without tax so that you can calculate the money you would spend on the policy. This would also help you judge if the returns on the policy are good enough or not.

Also Read: How To Surrender Lic Policy Online

What Do You Mean by a LIC Premium Without Tax Calculator?

The LIC premium calculator is an online device offered by the LIC of India to allow its customers to evaluate the premiums of different plans provided by the insurer. This online tool also lets the policyholder calculate the maturity amount of the policy. This way, the customer can analyze the returns to be received and the premiums to be paid before purchasing the policy.

This tool is effective, especially for people planning to invest in life insurance. The insured is likely to provide some details while using the calculator to estimate the premium amount.

Different Kinds of Policies Sold by Life Insurance Corporation of India (LIC)

The tax that you pay on your policy depends on the type of policy that you buy. So, as such, it is an important factor when you want to know how to calculate LIC premium without tax. The policies sold by LIC can be categorized into three categories – term insurance policies, unit-linked policies, and endowment policies.

  1. Term Insurance policies are the purest form of life insurance out there and offer a death benefit only to the nominated beneficiary of the term insurance plan. This is only done if the insured dies within the coverage period.
  2. Endowment Policies offer you a death benefit as well as a maturity benefit. The policyholder gets the maturity benefit if they survive the policy coverage period.
  3. Unit Linked Policies offer the combined benefits of life insurance coverage along with the potential to create wealth. A part of the premium in this case is invested in debt or equity instruments while the remaining is used to pay the premium for the life coverage.

Thus, if you want to know the LIC installment premium without tax you should know how the taxes apply on the same.

How to Find the LIC Premium Without the Tax?

Checking the LIC premium without tax might be a hassle for many if you don’t know how and where to find it. Below are the ways to check an LIC premium without tax:

  • Your basic premium amount (without tax), as well as the tax amount, are both mentioned in the premium payment receipt separately. This information is also available in your insurer’s official portal in the premium paid certificates.
  • Also, the premium without the tax is mentioned on the status report of the insurance plan. You can check this status report by using your policy number.
  • Further, the premium amount, as well as the tax amount, are cited separately in the policy bond which is offered by the insurer at the time of policy buying. So, you can check the LIC premium amount without the tax in the policy bond as well.

How Does GST Affect the Premiums of Life Insurance Policies (LICs)?

Do you want to know how to know LIC premium without tax? Then this is a table that should be of interest to you:

Type of insurance The previous tax rate under the service tax regime The new tax rate under the GST regime The area where the tax is applied
Term plans 15% 18% premiums paid for every year of coverage
Endowment plans 3.75% 4.50% single-premium or first-year plans
Endowment plans 1.88% 2.25% premium renewal
ULIP (unit-linked insurance plan) plans 15% 18% charges for fund management and premium
Annuity plans 1.50% 1.80% both regular-premium and single-premium plans

So before you try to find out what is installment premium without tax in LIC you must understand how GST has affected the premiums that you pay for your life insurance policies. We hope that the data provided in the table above would be helpful in this regard. As you can see from above, GST has had a say on both ULIP plans and term plans among the life insurance plans. It has affected several other forms of insurance as well.

Also Read: Senior Citizens Can Avail Tax Break on Interest Income Under Sec 80TTB

How to Find or Calculate LIC Installment Premium without Tax using LIC Premium Calculator Online?

  1. Using the premium receipt is the first step in figuring out your installment premium without tax. For instance, the top of the LIC receipt has information on the overall premium amount and the cumulative GST amount (CGST + SGST).
  2. Another method is to use premium calculators online, for this you first need to know how to use the LIC premium calculator. The basic steps for the same could be enumerated as below:
    • Visit the official website of LIC at www.licindia.in
    • From there you need to visit LIC Online Service Portal.
    • Over there you would find the option name ‘Premium Calculator’. When you click on it a new page would open up.
    • Over there you would have to fill up details such as your name, mobile number, date of birth, email ID, and gender.
    • After that click on the button that says Next.
    • Here you would get three options – Quick Quote, Compare Quotes, and Cancel.
    • If you click on Quick Quote you would get a drop-down of the various policies that are sold by LIC including term insurance plans, endowment plans, unit-linked plans etc.
    • Choose one that you want to buy and click on the ‘Coverage’ button.
    • This would provide you with all the coverage-related details that you want to know about the policy.
    • Once you have filled in all the necessary details in this case click on the button that says Quote.

This would show you the basic premium of the policy and the taxes that would be applicable for the same. So, if you want to know the LIC premium without tax this is the way that you would have to go about it.

Also Read: Best Term Insurance Plan in India 2023

Advantages Of LIC Premium Calculator

Below are some advantages of using the LIC Calculator:

  • LIC Calculator is hassle-free as compared to visiting the branch of the insurer
  • A LIC premium calculator online can be used anytime at your comfort and flexible hours
  • Using an online LIC calculator to buy a policy can help you save time as compared to enquiring manually about a policy
  • It enables easy comparison between policies
  • Using a calculator also reduces the chances of error substantially

Conclusion 

There are two major ways in which you can pay the premiums of these policies – in installments and at one go. In the first case, knowing the installment premium without tax would be helpful for you as far as planning your finances is concerned. You can pay the premiums once each quarter as well. Before the internet came about people would simply queue up outside the LIC offices nearest to them to pay their premiums.

Also Read: Section 139 (1) of the Income Tax Act

However, thanks to the emergence of the internet it has now become so much easier to pay the premiums. The same can also be said of finding out your LIC installment premium without tax. It must be said that phenomena like internet banking have made the entire process so much more convenient than it was earlier. As we have said already, LIC has an official website where you can log on and pay your premiums in any way you want to. The most popular options, in this case, are debit card, net banking, credit card, and UPI (united payments interface), to name a few.

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FAQs: How to Calculate LIC Installment Premium Amount Without Tax Online using LIC Premium Calculator

How is the LIC premium calculated?

LIC premium can be calculated using an LIC premium calculator, a tool which is easily available online. All you need to do is enter your details on the online calculator tool, such as the type of plan, age, term of the policy, and the sum assured. The tool would auto compute the premium amount for you.

What is the installment premium in LIC?

LIC installment premium refers to the amount payable by the policyholder to the insurance company in regular installments, such as monthly, quarterly, every six months, or annually. In return for the premium installment, the insurer promises to provide coverage (maturity benefit) to the policyholder.

How can I check my LIC installment premium without tax?

The first step is to use the LIC premium calculator online to determine the LIC premium amount for the intended plan. With the same calculator tool, the installment premium payable without tax can be computed. This is also known as the basic premium.

How do I know my LIC installment amount?

In order to calculate the LIC premium payable in installments, you can follow these steps on the official website of LIC India:

> Click on the premium calculator tool available on the website www.licindia.in
> You would be required to fill in your basic details such as name, age, date of birth, gender, mobile number, country code, email ID, and the like.
> Next, click on the Quick Quote tab.
> You’d then be asked to choose your plan of choice from the various plans displayed.
> Click on coverage and enter the details required, such as sum assured, term of premium payment, additional coverage required, and the like.
> Click on Quote and you will be able to see the computed premium.

What is Insurance Premium?

An insurance premium is the amount of money that an individual is expected to pay to avail the benefit and coverage of an insurance policy.

How Does LIC Insurance Scheme Work?

LIC Life insurance plan is a type of insurance contract. Here, the policyholder buys a life insurance policy and agrees to pay a premium to keep the coverage intact for a particular duration of time. The insurer in return pays out a death benefit to the nominee of the insured in case of unfortunate demise of the person during the policy year.

What Is LIC Premium Calculator?

The LIC Premium Calculator is an online tool that helps in ascertaining the approximate amount of money that a policyholder has to pay as premium.

How To Use LIC Premium Calculator?

The LIC premium calculator helps policyholders to calculate the premium and maturity amounts of different policies by submitting details of certain factors like age, income, policy duration and so on. The calculator allows you to evaluate the premium as per monthly, quarterly, half-yearly, and yearly estimates and make it easy for the user to choose a policy.

How To Calculate LIC Premium Without Tax?

To Calculate LIC premium without tax, you can subtract the tax amount from the gross premium by multiplying the gross premium by the tax rate. After that, you can subtract the total amount from the gross premium.

Example: If the gross premium is Rs.10,000 and the tax rate is 10%, the premium without tax would be Rs.10,000 - (Rs.10,000 x 10%) = Rs.9,000

Advantages Of LIC Premium Calculator

Easy-to-use tool
Free tool available online
Can be used as many times as needed
Allow comparing plans from different insurers

How are LIC premiums paid?

LIC premium can be paid on an annual basis, or semi-annually, quarterly, or even monthly. It can be done via various online modes of payment or via offline ways by visiting the LIC office.

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Mar 17, 2022
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PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.

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