Summary: LIC Jeevan Utsav, Plan 771 (UIN 512N363V02), is a non-linked, non-participating whole-life savings insurance policy with limited premium payment and a choice between regular and flexible survival income. Under the current LIC sales brochure, premiums are payable for five to sixteen years, the minimum basic sum assured is ₹5 lakh, and income benefits of 10% of basic sum assured begin in a specified later policy year, provided conditions are met. The policy has no conventional maturity payout. Guaranteed additions accrue during the premium-paying term, while death benefits, paid-up values, surrender and policy loans are governed by separate policy provisions. The article distinguishes guaranteed policy amounts from investment returns and explains the material tax changes relevant to Tax Year 2026–27: the Income-tax Act, 2025 applies to income from 1 April 2026, life-policy receipt exclusions are governed by section 11 read with Schedule II, and the life-premium deduction is addressed by   subject to the chosen tax regime. Individual life insurance premiums have been exempt from GST since 22 September 2025. Readers should examine the current policy illustration and wording rather than assume that a stated annual income percentage is an annual yield.

Product Identity and Current Availability

The currently described LIC Jeevan Utsav is Plan 771 with Unique Identification Number 512N363V02. It must not be confused with the earlier Plan 871, UIN 512N363V01, which LIC records as withdrawn from sale on 1 October 2024. The current Plan 771 page provides a sales brochure applicable from 22 September 2025 onwards. The distinction matters because a legacy brochure or a quotation for a withdrawn version may have different terms or tax references.

LIC describes the product as a non-participating, non-linked, individual savings whole-life insurance plan. “Non-participating” means there is no entitlement to discretionary bonus or surplus participation; “non-linked” means the benefits are not tied to units or a market NAV. Whole-life coverage is not the same as a fixed maturity date. Benefits and policy termination follow the contract, and a buyer should request a personalised benefit illustration.

Eligibility, Premium Commitments and Policy Structure

LIC allows a premium-paying term between five and sixteen years. Minimum and maximum entry ages vary by the selected premium term: for example, a five-year term has an eight-year minimum entry age and a 65-year maximum age nearer birthday, while the sixteen-year term can begin from 30 days of age and has a 59-year maximum age nearer birthday. The maximum premium-ceasing age is 75 years nearer birthday. A person comparing quotations must therefore match the term and age, not just the sum assured.

The minimum basic sum assured is ₹5 lakh. LIC prescribes sum-assured increments of ₹25,000 from ₹5 lakh to ₹24 lakh and ₹1 lakh above ₹24 lakh. The brochure states no general maximum basic sum assured, but the amount permitted for an individual remains subject to underwriting. Premiums depend on entry age, premium term, sum assured, payment mode, underwriting and applicable rebates. It would be inaccurate to publish a universal annual premium without these inputs.

The available modes are yearly, half-yearly, quarterly and monthly, with monthly payments through NACH, as well as eligible salary deductions. LIC lists mode loadings in its brochure, making the frequency of payment relevant to total cost. There is a 30-day grace period for yearly, half-yearly and quarterly modes, and 15 days for monthly mode. Coverage during grace and consequences of non-payment should be checked against the policy document.

Regular Income and Flexi Income: How the Options Differ

Regular Income Benefit

Under Option I, an in-force policy pays 10% of the basic sum assured at the end of each policy year beginning in the year specified for the selected premium-paying term. This is a contractual benefit measured against basic sum assured; it is not a 10% annual return on all premiums paid. An annual payment can begin only after the applicable waiting period and subject to payment of all due premiums.

Flexi Income Benefit

Under Option II, the same 10% annual amount becomes eligible but may be deferred and accumulated. The current LIC brochure provides interest on accumulated Flexi Income Benefits at 5.5% per annum compounded yearly for completed months from the due date until withdrawal, surrender or death, whichever occurs first. It permits one withdrawal in a policy year, capped at 75% of the then accumulated balance including interest. A deferred balance does not represent an unrestricted savings account, and the precise conditions must be observed.

The brochure allows a change between the income options up to six months before the beginning of the policy year in which the first benefit becomes due. That deadline makes the election a meaningful part of policy planning. An individual who anticipates regular household expenses may value immediate annual receipt differently from a person who prefers permitted accumulation, but neither arrangement should be described as universally superior.

Guaranteed Additions and an Illustrative Calculation

Guaranteed additions accrue at ₹40 per ₹1,000 of basic sum assured at the end of each policy year during the premium-paying term, while the policy remains in force. No further guaranteed additions accrue after the premium-paying term. These additions are not the same as cash paid into the policyholder’s bank account each year. They are subject to the policy rules governing the death, surrender and other relevant benefit events.

Illustration only: with a basic sum assured of ₹10 lakh, the stated annual Regular Income Benefit, once it starts, is ₹1 lakh (10% × ₹10 lakh). The scheduled guaranteed addition during an in-force premium-paying year is ₹40,000 (₹10 lakh ÷ ₹1,000 × ₹40). Over a ten-year premium-paying term, the arithmetic total of scheduled additions would be ₹4 lakh, assuming the policy remains in force and all contractual conditions are satisfied. These numbers are not a net return calculation: premiums, timing of cash flows, taxes, surrender values and the absence of a maturity benefit must also be considered.

Death Benefit, Surrender, Paid-Up Value and Policy Loans

For an in-force policy after risk commencement, LIC describes the death benefit as Sum Assured on Death plus accrued guaranteed additions, with a minimum protection of 105% of total premiums paid up to death. Sum Assured on Death is the higher of basic sum assured and seven times annualised premium, as defined in the brochure. For a minor insured before risk commencement, the death benefit instead follows the premium-refund rule described by LIC. Existing Flexi Income balances and riders require separate consideration.

The policy does not offer a conventional maturity benefit. This should be prominently distinguished from an endowment policy that pays a maturity corpus on a fixed date. A policyholder who needs access to money before or after the survival-income start date must examine surrender and loan provisions rather than assume that the basic sum assured will be returned on a maturity date.

LIC specifies paid-up consequences when premiums cease after the grace period. If less than one full year’s premium has been paid, the brochure states that benefits cease and premiums are not refundable after the grace period. If at least one full policy year’s premiums have been paid, the contract may continue as a reduced paid-up policy, subject to the detailed formula. Revival is generally possible within five consecutive complete years from the first unpaid premium, subject to arrears, interest and continued insurability. A policy loan may be available under stated conditions, but the loan rate and maximum advance should be confirmed at the time of application.

GST Treatment of Individual Life Insurance Premiums

The Department of Financial Services confirms that GST on individual life insurance policies, including traditional individual savings policies, has been exempt from 22 September 2025. Notification No. 16/2025–Central Tax (Rate), dated 17 September 2025, is identified in the official government FAQ as the basis of the exemption. It is an exemption, not a zero-rated export, and group insurance remains outside this specific individual-policy exemption. For instalment premiums, the official FAQ explains that the date of payment is relevant, with transition cases governed by section 14 of the CGST Act, 2017.

The practical effect is that a premium payable for an eligible individual policy after the exemption generally carries no output GST, but a policyholder should check the invoice, especially for payments crossing the effective date, separate services and policy structures that may not qualify. The insurer’s input-tax-credit consequences do not create a personal GST credit for the policyholder.

Income-Tax Treatment for Tax Year 2026–27

The Income-tax Act, 2025 came into force on 1 April 2026. Income earned during 1 April 2025 to 31 March 2026 continues under the Income-tax Act, 1961 for Assessment Year 2026–27; income during 1 April 2026 to 31 March 2027 falls under Tax Year 2026–27 of the new Act. Accordingly, references in older product brochures to section 80C and section 10(10D) should be read alongside the operative provisions of the 2025 Act for new-period transactions.

Premium deduction: section 123 and Schedule XV

Section 123 of the Income-tax Act, 2025 provides the successor framework to the former section 80C, with an overall ₹1.5 lakh ceiling for eligible payments, subject to Schedule XV conditions and the taxpayer’s chosen regime. The default regime under section 202 does not generally allow this category of deduction; the permitted alternative regime and other eligibility conditions therefore matter. Premium-to-capital-sum-assured limits also require scrutiny. A policy should not be described as automatically generating a ₹1.5 lakh deduction merely because the annual premium exceeds that figure.

Receipts: section 11 and Schedule II, serial number 2

For Tax Year 2026–27, exclusion of qualifying life insurance proceeds from total income is governed by section 11 read with Schedule II, serial number 2, of the Income-tax Act, 2025. For non-ULIP policies issued on or after 1 April 2023, the policy-level premium-to-sum-assured ratio and aggregate annual premium ceiling of ₹5 lakh across relevant policies are material conditions for non-death receipts. The rules for sums received on death are different and generally remove these premium limits, subject to statutory exclusions such as Keyman policies. Regular or flexible survival payments should not be called tax-free without examining the policy and the applicable statutory conditions.

Where a payment is taxable, withholding and reporting must follow the provisions of the Income-tax Act, 2025 operative on the payment date. The former section 194DA reference in old material should not be applied mechanically to payments after 1 April 2026. Individuals should retain premium receipts, the policy schedule, payment statements, claim documentation and details of other life policies to test aggregate premium conditions accurately.

Risks and Practical Evaluation Checklist

The principal commercial risks are liquidity constraints, long premium commitment, potential loss of benefits on discontinuance, the opportunity cost of funds, and confusing a percentage of sum assured with a return on premium. An appropriate comparison uses actual dated cash flows: all premiums and loadings, first income year, annual payments, possible deferment, surrender value, death cover, riders and tax assumptions. For an accurate internal-rate-of-return comparison, future survival and death outcomes must be modelled separately rather than compressed into one guaranteed return figure.

Before signing, obtain LIC’s current benefit illustration for the selected entry age and premium term, read the policy document and Customer Information Sheet, verify the income option and change deadline, and confirm nominee details, underwriting, riders and policy-loan provisions. The 2025 brochure is the primary product reference; a personalised illustration and policy schedule govern the actual contract.

Frequently Asked Questions

Is LIC Jeevan Utsav Plan 771 the same as Plan 871?

No. Plan 871 was withdrawn in October 2024. The current LIC page identifies Plan 771 with UIN 512N363V02; buyers should confirm the exact version on the quotation.

Does Jeevan Utsav pay 10% return on premiums every year?

No. The annual income benefit is 10% of basic sum assured, starting only in the specified policy year. It is not a 10% yield on premiums or a statement of investment IRR.

When does the first income payment begin?

It depends on the premium-paying term. For terms of five to eight years, LIC states the first payment is due at the end of policy year eleven; longer premium terms have later starting years.

Is there a maturity benefit?

No conventional maturity benefit is available under this whole-life plan. Death, surrender, loan and survival-income provisions operate separately.

Is GST payable on the premium in October 2026?

Eligible individual life insurance premiums are exempt from GST from 22 September 2025 under the notified exemption. The invoice and any unusual transaction circumstances should still be checked.

Are all income benefits exempt from income tax?

Not automatically. For Tax Year 2026–27, section 11 read with Schedule II of the Income-tax Act, 2025 sets conditions, including premium-ratio and aggregate-premium limits for relevant non-ULIP policies.

Can I stop paying premiums without losing value?

Stopping payment can cause lapse or a reduced paid-up policy depending on the premiums already paid and contract terms. Obtain a written paid-up and surrender-value illustration before deciding.

Key Takeaways

LIC Jeevan Utsav Plan 771 combines whole-life cover with delayed regular or flexible income; it does not promise a conventional maturity corpus. Its 10% annual income is calculated on basic sum assured, not premiums. Guaranteed additions are contract benefits, not immediately withdrawable yearly interest. For October 2026, GST exemption for individual life premiums and the Income-tax Act, 2025 must both be considered. A source-faithful comparison requires the current brochure and personalised illustration.

Primary Sources and Verification Notes

LIC current product page: https://web.licindia.in/web/guest/lic-s-jeevan-utsav1 ; LIC sales brochure from 22 September 2025: https://web.licindia.in/documents/20121/1319704/Jeevan%2BUtsav%2BSales%2BBrochure_141025.pdf/da84d78a-ef72-c80f-b8df-83bb7565f087?t=1760429620376 . Government insurance GST FAQ (updated 5 January 2026): https://www.financialservices.gov.in/exemption-gst-all-individual-life-insurance-and-health-insurance-policies . Income-tax Act, 2025, section 123: https://www.incometaxindia.gov.in/w/section-123-92 . Income-tax Department transition FAQ: https://www.incometax.gov.in/iec/foportal/help/all-topics/e-filing-services/objective-and-scope-new-act .

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Disclaimer: This article is general educational information based on publicly available official materials reviewed on 11 October 2026, not a quotation, insurance solicitation, tax opinion or recommendation. Individual premiums, eligibility, benefits and tax outcomes depend on the issued policy, underwriting, payment history, taxpayer status, chosen tax regime and subsequent legal changes. Readers should consult LIC, the current policy documents and qualified advisers before acting. TaxGuru accepts no responsibility or liability for any loss, error, omission or decision made in reliance on this article.