What is LIC?
The LIC is the Life Insurance Corporation of India. It is a state-owned and operated insurance and investment corporation that offers various investment and insurance plans. These take place in multiple forms, with the most integral ones being the insurance plan, special plans, pension plans, unit-linked plans, micro insurance plans, withdrawn plans, and health plans.
What is PPF?
On the other hand, a PPF, also known as Public Provident Fund, is a long-term saving and investment instrument. It is one of the safest investment products available across the country. To such a great extent, the government of India guarantees and looks into the security of your funds in the investment. The Public Provident Fund is one of the most popular investment instruments used across the country. If you would like to understand how the PPF would be beneficial for you, we would recommend you refer to our PPF Return Calculator.
What are the differences?
The first is the purpose with which the two are run. Now, the LIC presents investment and insurance plans. That means that the primary purpose here is to provide insurance in case of a crisis and hence look out for your best interests in terms of protection against risks. On the other hand, the PPF is a saving and investment instrument that is run with the primary aim of enabling you to save money across the long term. To understand its workings in practice, we would recommend you refer to our PPF Maturity Calculator
The second is the target audience. By definition, LIC provides plans that are best suited for those that have others relying on them. That is why they are most highly sought after by those who have dependents such as families, parents, business persons, etc. On the other hand, PPF accounts are run to save money. Everyone can benefit from them, and hence all people can be considered to comprise the target audience here.
What are the similarities?
The most obvious similarity lies in the realm of safety and legality. LIC and PPF are both owned and operated by the government. That means that the government of India looks into the security and safety of these assets. As you may imagine, that offers a very stable safety from risk.
Another important (and pretty useful) similarity is that both PPF and LIC are exempt from taxes in certain regards. For PPF, investment amount, interest, and redemption proceeds are all non-taxable, whereas contributions and maturity proceeds are both exempted from tax in the case of LIC.
Which of the two is better?
The truth is that they are both just as good and cannot be compared against one another. The best practice is to invest in both of them as they guarantee and secure your future. Think about it. LIC looks into protecting you from risk, whereas PPF helps you save money for the long term. When put together, they go a long way in ensuring you feel more safe and confident about the future. If you would like to gain a better idea about this, we recommend you go through our PPF Calculator. It will go a long way in helping you make an informed decision.