Got some money sitting around? Maybe ₹2 lakhs from your annual bonus, ₹3.5 lakhs from a matured FD, or ₹5 lakhs from selling that old plot? And you’re thinking, “Where do I put this that’s safe, gives decent returns, and doesn’t need me to remember annual premium payments?”
Single premium LIC plans are perfect for people who have a lump sum (₹1.5 lakh to ₹5 lakh range) and want to secure their family’s future or create a retirement income stream with minimum effort.
In this detailed 2026 guide, we cover:
- Why single premium plans are gaining popularity again
- All current LIC single premium options that can start under ₹5 lakh
- Real-life premium vs benefit examples
- Who should buy & who should avoid
- Tax treatment & key things to watch out for
Let’s begin.
Why Single Premium Plans Are Making a Comeback in 2026
Single premium plans solve three common problems:
- Premium Payment Fatigue
Paying insurance premiums year after year for 20–30 years can be exhausting. Missing one payment? Policy lapses. Revival? Painful. Single premium: Pay once today. Policy runs for years. Zero stress. - Market Volatility Anxiety
Stock markets can give 12–15% long-term returns, but what if you’re 55 and the market crashes 30% right when you need your retirement money? Single premium plans offer guaranteed base benefits + bonuses from LIC’s conservative portfolio. Not spectacular, but peaceful. - “I Have Money NOW, Not Later”
Maybe you just received ₹5 lakhs from retirement gratuity, sold property, or got an inheritance. You want to deploy it smartly today, not commit to ₹20,000/year for 20 years. Single premium: Invest lump sum now, benefits spread over future years.
The Reality Check: FD vs Single Premium LIC
| Investment Option | ₹5 Lakh Today | After 10 Years (approx.) | Tax Impact (30% bracket) | Life Cover | Risk Level |
|---|---|---|---|---|---|
| Bank FD (7% compounded) | ₹5 lakhs | ₹9.84 lakhs | Tax on interest ≈ ₹1.45L | Zero | Very Low |
| PPF (7.1%, tax-free) | ₹5 lakhs | ₹9.95 lakhs | Zero | Zero | Very Low |
| Equity Mutual Fund (12%) | ₹5 lakhs | ₹15.53 lakhs | LTCG tax ≈ ₹1.32L | Zero | High |
| Single Premium LIC Endowment | ₹5 lakhs | ₹8–9 lakhs (SA + bonuses) | Maturity usually tax-free | Yes | Very Low |
Single premium LIC doesn’t give the highest returns, but it can match or beat FD post-tax returns in many scenarios (depending on bonuses), while also providing:
- Guaranteed component (sum assured)
- Life cover throughout
- Tax-free maturity (subject to conditions)
- Zero market risk
- One-time payment convenience
For conservative investors, this package can be worth accepting potentially lower returns than equity options.
The Three Best Single Premium LIC Plans You Can Start Under ₹5 Lakh
Here are the most relevant and active options in 2026 (always confirm current availability with LIC).
- LIC New Jeevan Shanti (Plan 858, UIN: 512N336V02) – Turn Lump Sum Into Lifetime Pension
- Minimum Purchase Price: ₹1.5 lakh
- Entry Age: 30–79 years
- Deferment: 1–12 years (choose when pension starts)
- Pension: Guaranteed monthly/quarterly/half-yearly/yearly for life
- Return of Purchase Price: 100% back to nominee on death
- Joint Life Option: Pension continues to spouse
Example (Feb 2026 illustration, approx.):
Age 60, ₹5 lakh single premium → Monthly pension ≈ ₹3,200–3,600 (for life). On death: Family gets ₹5 lakh back. Best for: Retirees or pre-retirees needing guaranteed monthly income.
- LIC Amritbaal (Plan 874, UIN: 512N365V01) – The Grandparent’s Gift Plan
- Minimum Sum Assured: ₹2 lakh (premium ≈ ₹1.8–2.2 lakh for SA ₹2 lakh)
- Entry Age (Child): 0 years (30 days completed) to 13 years
- Maturity Age: 18–20 years (you choose)
- Guaranteed Additions: Fixed annual amount added to SA
- Death Benefit: Higher of purchase price or SA + additions
Example:
Child age 0–1, SA ₹5 lakh → Single premium ≈ ₹3.8–4.2 lakh. Maturity at 18–20 ≈ SA + guaranteed additions (exact depends on GA rate in brochure). Best for: Grandparents/parents gifting for child’s future.
- LIC Single Premium Endowment Plan (Plan 917, UIN: 512N317V02) – Classic “Pay Once, Get Maturity”
- Minimum Sum Assured: Usually ₹1–2 lakh
- Policy Term: 10–25 years
- Maturity: Sum Assured + bonuses
- Death Benefit: Sum Assured + bonuses Example:
Age 40, ₹4.5 lakh single premium → SA ₹5 lakh, maturity at age 50 ≈ ₹5 lakh + bonuses (approx. ₹7–8 lakh, depending on bonuses). Note: In 2026, LIC promotes Jeevan Shanti and Amritbaal more actively. Confirm current availability of Plan 917.
Quick Decision Guide
| Your Situation | Recommended Plan | Approx. Investment | Main Outcome |
|---|---|---|---|
| 58–70 years, need monthly income | New Jeevan Shanti | ₹1.5–5 lakh | Guaranteed pension for life |
| Gifting for child/grandchild (0–13 years) | Amritbaal | ₹2–5 lakh | Maturity lump sum at 18–20 |
| 35–50 years, want savings + cover | Single Premium Endowment | ₹2–5 lakh | Maturity + bonuses + life cover |
Tax Treatment (February 2026)
- Premium: Generally no Section 80C deduction for single premium plans.
- Maturity/Death Benefit: Usually tax-free under Section 10(10D) if premium < 10% of Sum Assured (most single premium plans qualify).
- For policies issued on or after April 1, 2023: Aggregate premium cap of ₹5 lakh per year across certain savings policies for tax-free maturity.
- Death benefits remain tax-exempt even if cap exceeded.
- Pension (Jeevan Shanti): Partly taxable as “income from other sources,” but return of purchase price is tax-free.
Always consult a CA, tax laws can change.
Red Flags: What to Watch Out For
- Overpromised Returns: If claimed “8–9% guaranteed,” be skeptical. Realistic range with bonuses ≈ 5–6.5% (bonuses not guaranteed).
- Inflation Risk: ₹5 lakhs today won’t have same purchasing power in 20 years. These plans preserve capital + modest growth.
- Surrender Charges: Early surrender (first 2–3 years) gives poor value.
- No Personalized Illustration: Never buy based on “approximately.” Get official LIC quote.
Final Recommendation
If you have ₹1.5–5 lakh to invest once and want:
- Guaranteed lifelong pension → New Jeevan Shanti
- Child’s future fund → Amritbaal
- General endowment + bonuses → Check latest single premium endowment variants
Get a fresh benefit illustration from an LIC advisor, rates and annuity factors change periodically.
Ready to start? Call or WhatsApp 7651032666 or visit lifeinsuranceadvisor.in for personalized single premium plan suggestions.
This article is for educational purposes only. Insurance involves risk; read policy terms carefully.
