Investor asks: Should I delay LIC Jeevan Anand premium to save GST or pay now?
Suppose you are a LIC Jeevan Anand policyholder wondering about late payment fees, GST waiver, and Tata Neu Infinity rewards. In that case, it’s important to understand how late fees are calculated and whether delaying your premium payment is worth the potential savings. Expert advice can help you avoid policy lapses while maximizing tax and reward benefits.
- Sep 13, 2025,
- Updated Sep 13, 2025 2:05 PM IST
I have a LIC Jeevan Anand policy with an annual premium of Rs 56,659 plus Rs 1,275 GST (Rs 57,934 total). The premium was due on August 15, with a grace period until September 14. My father suggests delaying payment until after September 22, since GST on life insurance is being removed. My agent says the late fee will be around Rs 1,275, but my father believes it may be only Rs 100–200. Could someone clarify how late fees are actually calculated and whether it’s worth delaying payment? Also, if paid late, will Tata Neu Infinity card rewards still apply automatically?
Advice by Manju Dhake, Head – Insurance Advisory Practise at 1 Finance
The late fee on a LIC policy like Jeevan Anand is not equal to the GST amount. It is generally calculated as a small interest-based charge on the overdue premium, linked to the number of days delayed. Typically, LIC levies around 9–10% annualised interest on the due premium (excluding GST), applied proportionately for the delay period. For example, if your annual premium is Rs 56,659 and the delay is a week, the late fee would usually be only a few hundred rupees (Rs 100–200)—not as high as the GST amount of Rs 1,275.
With the finance minister’s announcement of GST removal on life insurance premiums effective 22nd September 2025, paying after this date could indeed save you the GST outflow. However, this must be balanced against the policy’s grace period expiry (September 14 in your case). If the premium is not paid within the grace period, the policy could lapse, risking loss of coverage until revival.
A grace period is a short timeframe that insurers allow policyholders after a missed premium due date to make the payment and keep their coverage active. During this period, the insurance policy remains in force, providing uninterrupted protection.
According to IRDAI’s Master Circular on Protection of Policyholders’ Interests, the grace period is 15 days for monthly premium payments and 30 days for quarterly, half-yearly, or annual payments, starting from the original due date.
For example, if you have a monthly health insurance plan with a premium due on September 15 and your last payment was on August 15, you have until September 30 to pay the premium before your policy lapses.
While the GST on life insurance premiums will be reduced to 0% from September 22, 2025, this waiver applies only to policies whose renewal due dates fall on or after that date. Policies with due dates before September 22 will continue to attract the standard 18% GST on the premium, even if paid after the GST change.
What should you do
The safer option is to confirm directly with LIC whether they are extending the GST relief to premiums due before 22nd September but paid later. If yes, delaying may make sense. If not, the benefit may apply only to policies with due dates after the change.
Regarding Tata Neu Infinity card rewards, these are triggered on successful premium payment through the partner platform and are not impacted by a short delay.
Ultimately, while delaying the premium payment could save the GST amount, it is essential to weigh this against the risk of your policy lapsing. Even a small lapse could interrupt coverage and create complications in case of a claim. Confirming the exact applicability of the GST waiver with LIC in writing will help you make an informed decision. Meanwhile, rest assured that short delays generally won’t affect Tata Neu Infinity card rewards. Balancing potential savings with the security of uninterrupted coverage is key before deciding on the timing of your payment.
In summary, the late fee will be minor, but don’t risk a coverage lapse; seek LIC’s written clarification before deciding to delay.
I have a LIC Jeevan Anand policy with an annual premium of Rs 56,659 plus Rs 1,275 GST (Rs 57,934 total). The premium was due on August 15, with a grace period until September 14. My father suggests delaying payment until after September 22, since GST on life insurance is being removed. My agent says the late fee will be around Rs 1,275, but my father believes it may be only Rs 100–200. Could someone clarify how late fees are actually calculated and whether it’s worth delaying payment? Also, if paid late, will Tata Neu Infinity card rewards still apply automatically?
Advice by Manju Dhake, Head – Insurance Advisory Practise at 1 Finance
The late fee on a LIC policy like Jeevan Anand is not equal to the GST amount. It is generally calculated as a small interest-based charge on the overdue premium, linked to the number of days delayed. Typically, LIC levies around 9–10% annualised interest on the due premium (excluding GST), applied proportionately for the delay period. For example, if your annual premium is Rs 56,659 and the delay is a week, the late fee would usually be only a few hundred rupees (Rs 100–200)—not as high as the GST amount of Rs 1,275.
With the finance minister’s announcement of GST removal on life insurance premiums effective 22nd September 2025, paying after this date could indeed save you the GST outflow. However, this must be balanced against the policy’s grace period expiry (September 14 in your case). If the premium is not paid within the grace period, the policy could lapse, risking loss of coverage until revival.
A grace period is a short timeframe that insurers allow policyholders after a missed premium due date to make the payment and keep their coverage active. During this period, the insurance policy remains in force, providing uninterrupted protection.
According to IRDAI’s Master Circular on Protection of Policyholders’ Interests, the grace period is 15 days for monthly premium payments and 30 days for quarterly, half-yearly, or annual payments, starting from the original due date.
For example, if you have a monthly health insurance plan with a premium due on September 15 and your last payment was on August 15, you have until September 30 to pay the premium before your policy lapses.
While the GST on life insurance premiums will be reduced to 0% from September 22, 2025, this waiver applies only to policies whose renewal due dates fall on or after that date. Policies with due dates before September 22 will continue to attract the standard 18% GST on the premium, even if paid after the GST change.
What should you do
The safer option is to confirm directly with LIC whether they are extending the GST relief to premiums due before 22nd September but paid later. If yes, delaying may make sense. If not, the benefit may apply only to policies with due dates after the change.
Regarding Tata Neu Infinity card rewards, these are triggered on successful premium payment through the partner platform and are not impacted by a short delay.
Ultimately, while delaying the premium payment could save the GST amount, it is essential to weigh this against the risk of your policy lapsing. Even a small lapse could interrupt coverage and create complications in case of a claim. Confirming the exact applicability of the GST waiver with LIC in writing will help you make an informed decision. Meanwhile, rest assured that short delays generally won’t affect Tata Neu Infinity card rewards. Balancing potential savings with the security of uninterrupted coverage is key before deciding on the timing of your payment.
In summary, the late fee will be minor, but don’t risk a coverage lapse; seek LIC’s written clarification before deciding to delay.