LIC Turns 68: Is Your Policy Still Your Best Bet?

LIC was created in 1956 by merging 245 insurers and is now India's largest life insurer. But with private players and term plans offering better returns and lower premiums, should you still rely only on LIC for your life cover and savings?

Here's what happened: LIC was formed in 1956 under the Life Insurance Corporation Act by nationalising 245 Indian and foreign insurance companies with a government capital of ₹5 crore.. LIC now manages over ₹50 lakh crore in assets and insures hundreds of millions of Indians, making it the world's largest insurer by policy count.. As LIC approaches its platinum jubilee (70 years in 2026), it is pushing to grow market share amid rising competition from private insurers like HDFC Life, SBI Life, and ICICI Prudential..

What you should do: Compare your LIC endowment or money-back policy's internal rate of return — most deliver only 4–5% annually, well below PPF or even FDs.. If you hold a traditional LIC policy purely for life cover, check if a pure term plan from any insurer gives you 10x more cover at half the premium.. Review your LIC policy's paid-up value and surrender value using the LIC portal before deciding to continue, make paid-up, or surrender old underperforming policies..

Mixing insurance and investment in one LIC policy is the most common middle-class money mistake — separate them: buy a term plan for cover and SIP for wealth.