The actual annual return on a traditional endowment or money-back policy, which is almost always far below what the maturity multiple suggests. The comparison to a plain investment of the same premiums is the point.
Also called: insurance policy return calculator, lic policy irr.
5.28% a year. Paying ₹15,00,000 in premiums to receive 30,00,000 sounds like a 100% gain, but spread over 20 years it is 5.28%. The same premiums at 10% would have reached ₹56,28,689.
An estimate, not an offer or a guarantee. Projected returns assume the rate you entered holds for the whole term, which no market does.
This is what the calculation gives for the numbers you entered. It is an estimate, not advice, and it knows nothing about your situation beyond those numbers. Rules for India change on a published schedule; the effective date is shown on every rule-based tool.
A policy that returns three times the premiums sounds generous until the twenty years are accounted for. Treating premiums as outflows and maturity as an inflow and solving for the rate gives the honest figure, which for most traditional Indian policies lands between four and six percent. The alternative column invests the identical premiums at a rate you choose, so the opportunity cost is visible in money rather than in percentage points.
solve for r: premiums paid in, maturity paid out, discounted to the same pointEach of these is asserted on every build. If a change to the engine ever moved one of these answers, the build would fail before the page could print it.
Return the policy actually pays5.28%
arithmetic identity: 15 premiums of a lakh, doubling at maturity
Open this exampleReturn the policy actually pays0%
boundary: the headline gain is nil, and the real rate is negative once timing is counted
Open this exampleReturn the policy actually pays100%
degenerate case
Open this exampleFormula version 1.0.0 · definition 1.0.0 · India · Report a problem with this calculator