PPF versus LIC Jeevan Labh

PPF (Public Provident Fund) and life insurance policy, LIC’s Jeevan Labh are both different kinds of investment options, wherein the former offers fixed-income savings opportunities, while the latter offers life coverage plus savings.

Best Investment Options
  • Save upto ₹46,800 in tax under Sec 80C

  • Inbuilt Life Cover

  • Tax Free Returns Unlike FD

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply

Get Guaranteed returns along with life cover
invest in 100% Guaranteed Return Plans Tax benefits under sec 80C & No Tax on returns*
+91
View Plans
Please wait. We Are Processing..
Plans available only for people of Indian origin By clicking on "View Plans", you agree to our Privacy Policy and Terms of Use #For a 55 year on investment of 20Lacs #Discount offered by insurance company Tax benefit is subject to changes in tax laws
Get Updates on WhatsApp

Let’s study the differences that make these two options unique and how you can benefit from either one.

PPF versus LIC Jeevan Labh

A comparison between a public provident fund and LIC’s Jeevan Labh will give us several dissimilarities given that both are completely different investment options and serve different purposes. PPF allows you to create a savings corpus without any life cover. On the other hand, LIC’s Jeevan Labh was designed to offer life cover against death of the life assured. 

Let’s understand the major grounds for differences between the two:

LIC’s Jeevan Labh vs. PPF

S. No. Criteria PPF LIC Jeevan Labh
1 Type of scheme Investment plus tax-saving vehicle Life insurance plus savings vehicle
2 Who should buy it? Anyone looking for a high-interest savings scheme Primarily targeted for individuals with dependents
3 Rate of return High at 7.1% interest rate Lower than PPF and subject to company profits
4 Policy maturity 15 years 16 years/21 years/25 years
5 Renewal / extension Can be extended by 5 years post maturity The policy can be renewed after maturity
6 Loan facility From 3rd financial year up to 6th financial year Only after two years’ premiums have been paid
7 Tax benefit EEE tax benefits (deposits, interest, and maturity amount are exempt from taxes). Premiums and maturity benefits are exempt from taxes under Section 80C and Section 10(10D) of the Income Tax Act, 1961, respectively.
8 Investment Amount Annual deposit of minimum - Rs. 500, and maximum - Rs. 1.5 Lakhs Premiums are fixed as per the sum assured. 
9 Death Benefit Not applicable Sum assured death is payable to the beneficiary assigned by the policyholder

Disclaimer: Policybazaar does not endorse, rate, or recommend any particular insurer or insurance product offered by an insurer.

“Tax benefit is subject to changes in tax laws. Standard T&C apply.”

Now that we are aware of the key differences between the two, let’s explore each option in some detail and see if there are any similarities between the two.

Brief on Public Provident Fund (PPF)

The public provident fund is a government of India-backed long-term investment scheme that offers guaranteed returns. As a PPF account holder, you are expected to deposit an amount and receive interest on that investment at a rate annually revised by the government. The returns that you are entitled to allow you to maximize your savings and plan for your future goals. 

PPF as a financial instrument features a lot of attractive benefits for the account holder. Some of the most beneficial ones are:

  • Deposit Amount - The PPF scheme allows you to deposit a minimum sum of Rs.500 up to a maximum amount of Rs.1.5 Lakhs in a year. The minimum amount that has been set ensures affordability for people belonging to the low-income bracket. 

  • Rate of Interest - The rate of interest on your public provident fund is revised by the Ministry of Finance every quarter. For the current quarter, the interest rate is set to 7.1%. It is noteworthy that this is higher than most other schemes that are currently available. 

  • Tax Savings - The investment that you make is eligible for tax deductions. Further, the interest earned and the maturity proceeds are also exempt from tax under section 80C of the Income Tax Act 1961. 

Let’s now briefly discuss LIC Jeevan Labh and try to study the key benefits offered by it. 

About LIC’s Jeevan Labh Policy

LIC’s Jeevan Labh is an endowment-based life insurance policy. The primary purpose of the policy is to cover the risk of premature death of the life assured. The policy also comes with a savings aspect, wherein you are entitled to maturity benefits on surviving the duration of the policy. LIC Jeevan Labh offers guaranteed financial protection and offers the sum assured on death or maturity of the policy.  

The policy offers the following benefits.

  • Death Benefit - Death benefit is payable on the death of the life assured. The sum assured on death is payable as either 7 times the annual premium or the absolute sum assured, whichever amount is higher. 

  • Maturity Benefit - Even on surviving till the maturity of the policy, the life assured receives an assured sum in the form of maturity benefit. 

  • Additional Bonus - LIC Jeevan Labh participates in the profits of the company, due to which policyholders receive simple reversionary bonuses and any final additional bonuses applicable. This extra sum is payable along with death and maturity benefit, however, is subject to company valuation every year. 

LIC Jeevan Labh vs. PPF - Common Grounds

While LIC Jeevan Labh and the Public Provident Fund are both vastly different in terms of their purpose and features, certain aspects show similarities between the two.

  1. Reliability 

    PPF is a government-backed scheme, which means it assures risk-free and guaranteed returns. Therefore, it is considered reliable and one of the safest savings policies in the country. 

    LIC’s Jeevan Labh is offered by the government-owned entity, Life Insurance Corporation of India, which makes it a reliable product. LIC currently occupies the largest market share in the life insurance space, which can be attributed to it being trustworthy among the masses. 

  2. Zero Market Risks

    Both LIC Jeevan Labh and the PPF scheme are non-linked products that make them free from market fluctuations. Therefore, the risk factors are significantly lower than market-linked investments. Both options are suitable for risk-averse individuals. 

  3. Enhanced Savings 

    Both LIC Jeevan Labh and PPF offer the scope of increasing one’s savings corpus. While your PPF account is a traditional savings scheme with a high-interest rate, LIC Jeevan Labh offers life cover with additional returns as a means for increased earnings. However, the rate of return for LIC policies is lower. 

  4. Loan Facility

    Both the schemes allow policyholders to avail of loan facilities, subject to the sum assured and the deposit amount. However, the terms and conditions under each product differ, as discussed in the comparison between the two.  

  5. Tax Benefits 

    Policyholders of LIC Jeevan Labh can avail of tax benefits under the Income Tax Act of 1961. Similarly, with a PPF account, one can enjoy tax exemptions on the deposit amount, the interest, and the maturity payout. 

Summing up!

A PPF account allows you to make regular deposits, so you can grow a substantial corpus to fund future needs. With the LIC’s Jeevan Labh Policy, you can secure the financial future of your family in the event of your death. With both options, you earn additional benefits in the form of interest and bonuses.

Experts believe that both options are equally beneficial and serve important purposes. Therefore, it is best if you try to invest in both options and create a well-rounded financial backup for yourself and your family.

Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.

LIC of India articles

Recent Articles
Popular Articles
Why LIC Jeevan Labh is a Preferred Choice Among Young Indians?

04 May 2022

LIC, one of the largest insurers of India offers a wide range of...
Read more
LIC Accidental Death Benefit Rider

05 Apr 2022

Riders in insurance are meant to provide extra coverage on top...
Read more
LIC Premium Waiver Benefit Rider

05 Apr 2022

Optional benefits with your LIC policy can help you provide more...
Read more
LIC Savings Plans

05 Apr 2022

LIC savings plans come with insurance protection as well as...
Read more
LIC Plan No. 815 - LIC’s New Jeevan Anand

05 Apr 2022

LIC’s New Jeevan Anand was designed to offer a combination of...
Read more
Surrendering LIC Policy Before Maturity Time: Your Guide!
Life insurance Corporation of India is one of the most prominent insurance companies and they have an...
Read more
How to Check the Maturity Amount of LIC Policies?
Life Insurance Corporation of India is one of the leading public companies in the service of insurance plans. And...
Read more
Is there any LIC Kanyadan Policy?
First and foremost, there is no such plan called the LIC Kanyadan Policy launched by the Life Insurance...
Read more
LIC Online Payment Offers
Gone are the days when you have to pay premium amounts of your LIC insurance through agents or other related...
Read more
Life Insurance Corporation of India (LIC of India)
Life Insurance Corporation of India (LIC of India) Life Insurance Corporation of India or LIC of India is a...
Read more
top
Close
Download the Policybazaar app
to manage all your insurance needs.
INSTALL