Summary: LIC’s Jeevan Utsav is a non-linked, non-participating, individual savings whole-life insurance plan combining life cover with guaranteed additions during the premium-paying term and a later annual survival benefit. Under the current version, the premium-paying term ranges from 5 to 16 years and the minimum Basic Sum Assured is ₹5 lakh. The policyholder chooses Regular Income Benefit or Flexi Income Benefit; in either case the annual survival benefit is 10% of Basic Sum Assured from the prescribed policy year, subject to policy conditions. Flexi Income may be deferred and accumulated with interest at 5.5% per annum, compounded yearly for completed months under the current brochure. There is no maturity benefit under this version. For policies issued now, tax treatment must be examined under the Income-tax Act, 2025, particularly Section 123 read with Schedule XV for eligible premium deduction and Section 11 read with Schedule II for exemption of qualifying receipts. The ₹5 lakh annual-premium restriction applicable to high-value non-ULIP policies and premium-to-sum-assured conditions can materially affect exemption of survival receipts. From 22 September 2025, individual life-insurance services are exempt from GST under Notification No. 16/2025-Central Tax (Rate), subject to the notified scope.
- LIC Jeevan Utsav: Guaranteed Income, Tax Treatment and Key Conditions Explained
- What is LIC Jeevan Utsav?
- Entry-age framework
- Two Survival Benefit Options
- Option I — Regular Income Benefit
- Option II — Flexi Income Benefit
- When does annual income begin?
- Guaranteed Additions During Premium-Paying Term
- Death Benefit
- No Conventional Maturity Benefit
- Surrender, Paid-Up Status and Policy Loan
- Surrender
- Paid-up policy
- Loan facility
- Income-tax Treatment from Tax Year 2026-27
- Premium deduction — Section 123 read with Schedule XV
- Tax exemption of policy receipts
- TDS where the policy receipt is taxable
- GST on Jeevan Utsav Premium from 22 September 2025
- Practical Points
- Frequently Asked Questions
- Key Takeaways
LIC Jeevan Utsav: Guaranteed Income, Tax Treatment and Key Conditions Explained
LIC’s Jeevan Utsav (UIN 512N363V02)
What is LIC Jeevan Utsav?
LIC Jeevan Utsav is a non-par, non-linked, individual savings, whole-life insurance plan. It is not a market-linked ULIP and does not participate in LIC’s surplus. Its principal contractual features are life insurance, guaranteed additions during the premium-paying term and annual survival income beginning after a prescribed deferment period.
The current LIC brochure identifies the product as UIN 512N363V02. The premium-paying term can be selected from 5 to 16 years. The Basic Sum Assured starts at ₹5,00,000; there is no stated overall maximum, though the amount accepted for an individual remains subject to LIC’s underwriting policy.
Entry-age framework
The permitted entry age depends on the premium-paying term. For a 5-to-8-year premium-paying term, the minimum entry age is 8 completed years and the maximum is 65 years (nearer birthday). As the premium-paying term becomes longer, the permitted minimum age falls and the maximum age also reduces. For the 16-year premium-paying term, the brochure permits entry from 30 days, with a maximum entry age of 59 years. The maximum premium-ceasing age is 75 years.
For a life assured below age 8 at entry, commencement of risk is deferred in accordance with the policy wording. A minor policy vests in the life assured on the policy anniversary coinciding with or immediately following completion of age 18.
Two Survival Benefit Options
Option I — Regular Income Benefit
Under the Regular Income option, an in-force policy pays 10% of Basic Sum Assured every year from the policy year specified for the chosen premium-paying term, provided all due premiums have been paid.
For example, a Basic Sum Assured of ₹10 lakh produces a contractual Regular Income Benefit of ₹1 lakh per year once the benefit starts. This describes the contractual benefit only; it is not an investment-return calculation or recommendation.
Option II — Flexi Income Benefit
The Flexi Income option also provides an annual benefit equal to 10% of Basic Sum Assured, but allows the policyholder to defer withdrawal. Under the current brochure, deferred Flexi Income accumulates at 5.5% per annum, compounded yearly for completed months from its due date until withdrawal, surrender or death, whichever occurs earlier.
A policyholder may, on written request, withdraw once in a policy year up to 75% of the accumulated Flexi Income balance including interest. The remaining balance continues to accumulate in accordance with policy terms.
When does annual income begin?
| Premium-Paying Term | First Income Benefit |
|---|---|
| 5 to 8 years | End of 11th policy year |
| 9 years | End of 12th policy year |
| 10 years | End of 13th policy year |
| 11 years | End of 14th policy year |
| 12 years | End of 15th policy year |
| 13 years | End of 16th policy year |
| 14 years | End of 17th policy year |
| 15 years | End of 18th policy year |
| 16 years | End of 19th policy year |
The option selected at inception may be changed up to six months before the beginning of the policy year in which the first Regular Income or Flexi Income Benefit becomes due, subject to LIC’s terms.
Guaranteed Additions During Premium-Paying Term
For an in-force policy, Guaranteed Additions accrue at ₹40 per ₹1,000 of Basic Sum Assured at the end of each policy year during the premium-paying term. No further Guaranteed Addition accrues after that term.
Thus, on a ₹10 lakh Basic Sum Assured, the contractual Guaranteed Addition is ₹40,000 for each eligible policy year while the policy remains in force. These additions are not an annual cash payout during the premium-paying term; their treatment on death or surrender follows policy conditions.
Death Benefit
After commencement of risk, the death benefit under an in-force policy is the Sum Assured on Death plus accrued Guaranteed Additions. “Sum Assured on Death” is the higher of Basic Sum Assured or seven times the Annualised Premium. The death benefit cannot be less than 105% of total premiums paid up to the date of death, as defined in the policy.
No Conventional Maturity Benefit
A critical feature is that the current Jeevan Utsav version has no maturity benefit. It should not be confused with a conventional endowment policy paying a lump sum at a fixed maturity date. The plan is structured as whole-life cover with survival income.
Surrender, Paid-Up Status and Policy Loan
Surrender
The policy may be surrendered after completion of the first policy year if one full year’s premium has been paid. Guaranteed Surrender Value is acquired after payment of at least two full years’ premiums, while Special Surrender Value may arise after completion of the first policy year once one full year’s premium has been paid. The amount payable is the higher of the applicable Guaranteed Surrender Value and Special Surrender Value.
Early surrender can produce a value materially below total premiums paid. Policyholders should examine year-specific surrender factors and the personalised benefit illustration rather than treating the plan as a short-term deposit.
Paid-up policy
If premiums cease after the policy has acquired paid-up status, death and survival benefits are reduced in accordance with the policy formula. Guaranteed Additions stop accruing once the policy becomes paid-up.
Loan facility
Before the first survival-income year, the current brochure permits a policy loan up to 75% of surrender value for an in-force policy and up to 50% for a paid-up policy. Different constraints apply after annual income becomes due. Loan interest is determined under LIC’s prescribed formula and can change.
Income-tax Treatment from Tax Year 2026-27
The Income-tax Act, 2025 reorganised the earlier Chapter VI-A deductions under Chapter VIII from 1 April 2026. Old references to Section 80C and Section 10(10D) should therefore not be used as the sole current-law references for Tax Year 2026-27 onwards.
Premium deduction — Section 123 read with Schedule XV
Eligible life-insurance premium falls under Section 123 read with Schedule XV of the Income-tax Act, 2025, within the aggregate statutory ceiling of ₹1.50 lakh and subject to applicable premium-to-sum-assured conditions and other requirements.
However, the deduction is not available under the default concessional regime under Section 202. Taxpayers should first determine the tax regime actually applicable to them. TaxGuru’s Income-tax Act, 2025 transition guide specifically notes that Section 123 deduction is unavailable under the new concessional regime.
Tax exemption of policy receipts
Life-insurance receipts are now examined under Section 11 read with Schedule II of the Income-tax Act, 2025, broadly carrying forward the earlier Section 10(10D) framework.
For a traditional non-ULIP policy issued on or after 1 April 2023, the high-value policy restriction is important. Broadly, exemption for non-death receipts can be lost where premium payable for any year exceeds the prescribed ₹5 lakh annual-premium threshold, including the statutory aggregation rule where more than one relevant policy is involved. The premium-to-sum-assured condition must also be satisfied. TaxGuru’s note on taxability of high-premium life-insurance policies explains the ₹5 lakh non-ULIP threshold and aggregation principle under the predecessor provision.
This is particularly relevant to Jeevan Utsav because it pays recurring survival income. Policyholders should not assume that every annual income receipt is automatically tax-free merely because it arises from a life-insurance contract.
TDS where the policy receipt is taxable
Where a life-insurance payout is taxable rather than excluded from total income, the current TDS framework is consolidated in Section 393 of the Income-tax Act, 2025. For the life-insurance payout category corresponding to old Section 194DA, the current rate is 2% on the income component, subject to the statutory ₹1 lakh threshold and conditions. TDS is only withholding; final tax depends on actual taxable income and applicable law.
GST on Jeevan Utsav Premium from 22 September 2025
Notification No. 16/2025-Central Tax (Rate), dated 17 September 2025, exempted specified individual life-insurance services from 22 September 2025. TaxGuru’s summary of the post-56th GST Council notifications records the exemption for life-insurance services supplied to insured persons who are individuals.
The Government subsequently confirmed that individual life-insurance policies covered by the notified exemption received GST relief from that date. The actual LIC quotation and receipt remain the controlling transaction documents.
Practical Points
- Do not equate “10% annual income” with a 10% investment return. The 10% is calculated on Basic Sum Assured, not cumulative premiums.
- Check the deferment period. Annual income does not begin immediately after the last premium in every option.
- Check tax exemption independently. The ₹5 lakh high-premium rule and aggregation across relevant policies can alter tax treatment.
- Review regime choice before claiming premium deduction. Section 123 deduction is not generally available under the default Section 202 regime.
- Do not assume a maturity lump sum. The current version expressly states that maturity benefit is not available.
- Read surrender values carefully. Early exit can materially reduce value.
Frequently Asked Questions
1. Is LIC Jeevan Utsav a ULIP?
No. It is a non-linked, non-participating whole-life savings insurance plan.
2. What is the minimum Basic Sum Assured?
The current brochure specifies ₹5 lakh, subject to prescribed multiples and underwriting.
3. Does Jeevan Utsav pay 10% every year immediately?
No. The 10% of Basic Sum Assured becomes payable annually only from the prescribed policy year for the chosen premium-paying term.
4. Is the 10% income a 10% return on premium?
No. It is 10% of Basic Sum Assured and should not be described as a 10% yield, IRR or return on premiums.
5. Does Jeevan Utsav have a maturity benefit?
No. The current UIN 512N363V02 brochure expressly states that maturity benefit is not available.
6. Is the premium eligible for income-tax deduction?
It can qualify under Section 123 read with Schedule XV, subject to the ₹1.50 lakh aggregate ceiling and other conditions. The deduction is not generally available under the default concessional regime under Section 202.
7. Is Jeevan Utsav income always tax-free?
No blanket statement should be made. Exemption of non-death receipts depends on Section 11 read with Schedule II, including premium-to-sum-assured and high-value policy conditions.
8. Is GST currently charged on an individual Jeevan Utsav premium?
Individual life-insurance services within Notification No. 16/2025-Central Tax (Rate) have been exempt from GST with effect from 22 September 2025. Check the actual LIC quotation and receipt for the transaction.
Key Takeaways
- Jeevan Utsav is a non-linked, non-participating whole-life savings plan.
- Premium-paying term: 5 to 16 years.
- Minimum Basic Sum Assured: ₹5 lakh.
- Regular/Flexi annual income: 10% of Basic Sum Assured from the prescribed start year.
- Guaranteed Additions: ₹40 per ₹1,000 Basic Sum Assured during the premium-paying term while in force.
- No maturity benefit is available under the current version.
- Income-tax deduction is governed by Section 123/Schedule XV and regime choice.
- Survival-income exemption requires satisfaction of Section 11/Schedule II conditions, including high-premium rules where applicable.
- Individual life-insurance services covered by the notified GST exemption have been exempt from 22 September 2025.
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Disclaimer: This article is for general educational and informational purposes only and is based on publicly available policy material and law considered as of 4 October 2026. It is not insurance, investment, financial, legal, tax or accounting advice, and is not an offer, solicitation, recommendation, ranking or endorsement of LIC Jeevan Utsav or any other insurance product. Insurance benefits, eligibility, underwriting, premiums, surrender values, loan terms, riders and claims are governed by the policy document, Customer Information Sheet, benefit illustration and insurer’s applicable rules. Tax and GST provisions, interpretations, thresholds and regulatory requirements may change, and their application depends on individual facts, policy issue date, premium, sum assured, other policies, tax regime and status. Readers should independently verify current policy documents, LIC communications, IRDAI requirements, Income-tax law and GST notifications and obtain advice from appropriately qualified professionals before acting. TaxGuru, its owners, management, editors, authors, employees and associated persons accept no responsibility or liability for any loss, damage, consequence, decision or action arising from reliance on or use of this article.
