LIC or PPF - Which is Better?

What Is LIC?

What Is a Public Provident Fund (PPF)?

What Are the Differences Between PPF and LIC?

Some of the important differences between Public Provident Fund (PPF) and Life Insurance Corporation of India (LIC) policies are discussed below:


Public Provident Fund (PPF)

Life Insurance Corporation of India (LIC)


The Public Provident Fund (PPF) scheme is governed by the Indian Government.

The Insurance Regulatory and Development Authority of India (IRDAI) regulates life insurance.

Interest Rate

In PPF, the interest rate is decided and reviewed by the Government. Presently, it stands at 7.10%

The rate of interest for insurance depends on the type of policy alongside the market performance.


PPF is a long-term investment scheme that lasts 15 years and can be extended for 5 years.

Life insurance policies are available for a term ranging between 5 and 30 years.

Deposits Frequency

You need to contribute to your PPF account annually.

You must pay the life insurance premium periodically throughout the policy's tenure.

Investment Objective

PPF enables an individual to save a substantial amount of funds to meet their financial goals in the future.

Life insurance policies aim to compensate for the financial loss due to an insured person's death after increasing corpus.

Premature Death

In the event of an account holder’s demise, the PPF account is closed ahead of time, and the nominee gets the existing balance.

In the event of an insured person’s demise, the insurance company gives the assured sum to that person’s family members.


Public Provident Fund (PPF) permits a loan facility and partial withdrawals from 3rd year and 7th year, respectively.

Insurance policies come with a lock-in period of 3 years, after which you can make claims.

What Are the Common Benefits of LIC?

What Are the Common Benefits of PPF?

FAQs About All You Need to Know About PPF Vs. LIC

Is investing the same amount in a public provident fund obligatory every year?

There is no constraint on the total number of instalments every financial year. The deposits should be made punctually every year during the tenure, and these types of deposits are exempt from income tax under Section 80C.

What happens in case the LIC premium is paid two times?

If the LIC premium is paid twice by mistake, the insurance provider will refund the amount to your bank account within 6 to 8 days.

Is LIC better than PPF?

A Public Provident Fund (PPF) fulfils the aim of long-term savings and retirement, while a LIC policy fulfils the purpose of insurance. The working patterns are different, so there is no specific better option. You need to get the one most suitable for you.