Two different products share a name
This is the most useful thing this page can tell you, so it comes first.
LIC is India's largest life insurer. LIC Mutual Fund is a separate asset management company. A monthly premium on an LIC endowment or money-back policy and a monthly SIP in an LIC Mutual Fund scheme are entirely different products with different regulators, different risks and very different returns.
This calculator projects a mutual fund SIP. If you are paying a premium on an insurance policy, the numbers here do not describe it.
Why the distinction matters to the result
A traditional endowment or money-back policy bundles life cover with a savings element. The savings part is invested conservatively, mortality charges and commissions are deducted from your premium, and the effective return to the policyholder has historically landed somewhere in the region of 4–6% a year — well below what an equity mutual fund targets, though with a guaranteed element and life cover attached.
A ULIP sits in between: market-linked, but with insurance charges deducted and a five-year lock-in.
A mutual fund SIP has no insurance component at all. Every rupee is invested, there is no mortality charge, and the return is whatever the scheme delivers, up or down.
The conventional advice follows directly from that. For protection, a term plan buys far more cover per rupee than any savings-linked policy. For growth, a mutual fund invests the whole premium. Separating the two usually produces both more cover and more money than bundling them, which is why "buy term, invest the rest" is repeated so often.
That is not a reason to surrender an existing policy without thinking — surrender values are often poor, and a policy near maturity is usually better completed. It is a reason to be clear about which product you are buying next.
Using the calculator
- Enter the monthly investment — the SIP instalment, not an insurance premium.
- Set an expected return rate for the scheme category: equity schemes higher, hybrid lower, debt lower still.
- Set the time period.
- Switch to Lumpsum to compare a one-time investment.
The result shows what you contributed, what the return added, and the total.
What the number does not include
The projection is gross of the scheme's expense ratio, any exit load, and tax. Equity gains above ₹1.25 lakh in a financial year are taxable. And, worth stating plainly on this page in particular: there is no life cover attached to a mutual fund SIP. If your family depends on your income, that is a separate purchase.