🟢 At a Glance:

Millions of LIC endowment policies bought in the early 2000s are maturing in 2025. And every Indian dad who once said “Stock market is gambling” is now refreshing his SMS inbox for that one magic payout. But is it really the jackpot they were promised?

📜 The Great LIC Dream: A Flashback

Remember when the LIC agent came home in the early 2000s?

• He had a calculator, a smile, and a plan that made your dad believe he’d be a crorepati by 2025.
• The plan? Pay Rs. 5,000 quarterly for 20 years, and get Rs. 10 lakh on maturity.
• The reality? Your dad paid Rs. 4 lakh in premiums and might receive just Rs. 6.2 lakh after 20 years.

Because:

It wasn’t an investment. It was a “savings with life cover” — the most boring product ever made to look exciting.

💸 Maturity Time = Harsh Reality Check

Here’s what most policies are maturing into:

Now compare with:

• Nifty 50 CAGR (2005–2025): ~11.5%
• PPF: ~7.1% compounded
• Even a boring FD: ~6.5% average

So why does your dad still swear by LIC?

Because “guaranteed” feels better than “volatile” — even if it’s 40% less money.

🧠 Why So Many Policies Are Maturing Now

Let’s connect the dots:

• 2003–2005: LIC’s peak selling phase post-Unit Linked Plan (ULIP) crackdown.
• Over 3 crore policies were sold annually.
• Most were 20-year endowment plans, set to mature in 2023–2026.
• That’s lakhs of Indians expecting maturity payouts this year.

Add to that:

• Pensioners who’ve retired and are now using maturity proceeds for grandchildren’s education.
• Households planning gold purchases, home renovations, or just to buy that iPhone 15.

🧾 Tax Rules for LIC Maturity in 2025

Thanks to Budget 2023, not all policies are tax-free anymore.

If the annual premium exceeds Rs. 5 lakh, maturity proceeds could be taxable.

Exceptions:

• Policies issued before 1 April 2023 are safe.
• Term plans (pure insurance) are unaffected.

📌 Tip: Check Section 10(10D) of the Income Tax Act and Form 10(10D) declaration while filing returns.

📉 The Emotional Yield of LIC

Let’s be honest. Most LIC maturity plans didn’t make you rich — but they:

• Forced saving discipline
• Offered peace of mind
• Made your dad feel like a responsible man
• Gave you ₹20,000 once that paid your semester fees

So yes, it underperformed markets — but overperformed emotions. And that’s hard to price.

📊 LIC Maturity: What’s Everyone Doing With It?

Based on Reddit/Quora/Telegram dads:

• 💍 27%: Marriage & gold buying
• 🏠 21%: Home renovation or EMI prepayment
• 💵 19%: New FD (yes… again!)
• 🚘 12%: Used car purchase
• 👶 11%: Grandkid’s education
• 📉 10%: Risk it in mutual funds

Clearly, LIC is turning into India’s own version of a sovereign-backed piggy bank.

💡 EduInvesting Take

If you’re waiting for your dad’s LIC policy to mature:

• Set expectations. Don’t expect a windfall — expect a modest payout.
• Guide them on better reinvestment options (debt funds, hybrid funds, even equity SIPs).
• And maybe stop calling the stock market gambling now, eh uncle?

Because the guy who invested in HDFC Bank in 2005 is now funding your Canada visa.

📌 Final Thought

LIC isn’t a scam. It’s a sentimental product. But in a world where you can open a mutual fund SIP in 2 minutes, locking money for 20 years at 5% is like using a Nokia 1100 in the iPhone era.

It’s time to teach our dads what CAGR really means. And maybe ourselves too.

Tags: LIC policy maturity 2025, LIC endowment plan, tax on LIC maturity, Indian dads investing, LIC vs mutual funds, EduInvesting