LIC Bonus Rates: LIC announced its bonus in 2016-17 calendars on LIC’s One Time Diamond Jubilee. LIC releases a bonus every September along with LIC Diamond Jubilee. In LIC bonus is a part of the return which is guaranteed to the LIC holders. In this article, we are going to discuss the LIC bonus and its overview. Bonus which we are going to cover in this article is:-LIC One’s Diamond Jubilee Bonus.
- What is the Meaning of a Bonus?
- What are the Types of Bonuses?
- How to Calculate The Bonus Returns?
- How to compare The Diamond Jubilee Bonus with other LIC bonuses or with any other privacy policies company?
What is LIC Bonus, An Overview?
The Actuarial department does an evaluation, and the bonus rates will declare in September every year. There are so many types of bonuses are states in Sept by the Actuarial department:-
- SRB (Simple Reversionary Bonus)
- FAB (Final Additional Bonus)
- LA (Loyalty Bonus)
LIC has a LIC Act in which it shares its 95% of its profit to their policyholders and the remaining 5% with the government as its owner. In the year 2014-15, the regular Bonus of the LIC given to their policyholder is Rs. 34283 crores. And in 2015-16, LIC has paid Rs. 2502 as a surplus to the government up from Rs. 1803 crore.
In 2019-20 Life Insurance Corporation (LIC) has allocated a dividend of Rs. 2697.74 crore to the government for 2019-20 financial years. In those 2019-20 financial years, LIC generates a total surplus of approx Rs. 53955 crore, according to the sources. In 2019-20, Rs. 51257 crore surplus is reserved for the policyholders.
Life Insurance Corporation (LIC) of India, on their 60th anniversary, declared a bonus name as “One Time Diamond Jubilee Bonus.”
The new LIC policies, which open between 01/04/2015 to 31/03/2016, are relevant for the One Time Diamond Jubilee Bonus bonus rates. One Time Diamond Jubilee Bonus is also applicable for the claims by deaths or the claims which maturity period is over (including those discounted within one year of maturity) or surrendered on or after 01/01/2016.
Note: The Bonus is paid according to the policy rules and conditions and depends on the sum assured and policy term. The premium will be added to the account and paid when the maturity period will over.
LIC One Time Diamond Jubilee Bonus (60th Anniversary Bonus)
One-time additional bonus to the simple reversionary bonus, final additional bonus, and loyalty bonus is added on the occasion of LIC 60th Anniversary celebration named Life Insurance Corporation (LIC) of India’s “One Time Diamond Jubilee Bonus.” As per the Life Insurance Corporation of India declaration, they will pay Rs. 5 to Rs. 60 per Rs. 1000 sum assured, depending on the tenor of the policy. The older the policyholder is, the more the jubilee bonus will be offered to them compared to the new policyholders.
Some points to be considered by the LIC of India while offering the Jubilee Bonus to their policyholders:-
- Policies from 31st March 2016 are eligible for the jubilee bonus and exist on or after the procedures of 1st September 2016.
- This jubilee bonus will be paid over the regular annual bonus or its profit-sharing annual payout. The holders of money back get the profit of whole life from these profit plans.
- Diamond Jubilee Bonus can revive the old policies.
- Policies that lapse as of 31st March 2016 can also revive the eligibility of the Diamond Jubilee Bonus and can get the profit from the bonus offer.
- Diamond Jubilee Bonus on the 60th Anniversary of LIC benefits over 29 crore individual policyholders and 12 lakhs group policyholders.
- Depends on the duration of the policy, Diamond Jubilee Bonus can be Rs. 500 for a policyholder with the assured sum of Rs. 100000 to Rs. 6000. It means that older policyholders can get more profits as compared to the new policyholders. And also, the closer the maturity date, the maximum the profit.
- The bonus will automatically increase by Rs. 500 each for every five-year gap in older policies. E.g., an approach that started in April 2008 will get Rs. 1,000 for every Rs. 1 lakh of the assured sum from 1st April 2008 to 31st March 2016.
LIC Special Bonus
As LIC announced its Diamond Jubilee Bonus on the 60th anniversary, it announces LIC Special Bonus on its 50th anniversary on 1st September 2005. In this bonus, a policyholder can get Rs. 5 to Rs. 50 per thousand sums assured.
The Life Insurance Corporation of India declares seven bonus plans for its 55th-anniversary celebration:-
- Jeevan Anand,
- Child Future Plan,
- Jeevan Tarang,
- Jeevan Madhur,
- Jeevan Pramukh,
- Jeevan Bharti I and
- Jeevan Shree I.
All these bonus plans range between Rs. 1 to Rs. 6 per thousand sums assured.
These seven bonus plans were declared in 2011-12 under seven of its ‘With Profit Plans’ and Loyalty Additional Bonus (LAB) on the 55th-anniversary celebration.
What is Bonus?
Life insurance companies or organisations distribute their profits to their policyholders in some fixed percentage; this percentage is known as a bonus. Companies distribute various types of bonuses during a financial calendar.
Who is Eligible for the Bonus?
If you think everyone can grab the bonus, then this is not correct, everyone is not eligible for the prize, or you can say that every policyholder is not declared under the dividend. Only those policyholders who come under the eligibility criteria fixed by LIC are eligible for the prize. Types of policies that come under bonus criteria:-
- Participating insurance policies
- Traditional policies
- Endowment policies
- Whole life insurance policies
- Money-back plan policies
Types of Bonuses given by the Insurance Companies
Reversionary Bonus: Percentage rate declaration which applied to the sum assured of the policies. After order, they became a part of the guaranteed benefits of the guidelines. These will be paid at the end of the maturity period only or in case of death. There are three kinds of reversionary bonus:-
- Simple reversionary bonus: A simple reversionary bonus is calculated on the sum assured and declared on the percentage rate.
- Compound reversionary bonus: Like a simple reversionary bonus, it is also declared on the percentage rate basis, but they are applied to the sum assured and reversionary bonus already attached to the policy.
- Special reversionary bonus: A special reversionary bonus is a one-time offer or dividend paid during the term of the policy. This bonus is given if some profit arises and that the same gain is not expected to happen again in the future.
Example: Anniversary bonus like Diamond Jubilee Bonus (2015-16) and Special 50th Anniversary Bonus (2005).
Another bonus added in the special reversionary bonus is called the final additional bonus for its policyholders.
Another kind of bonuses offered:
- Terminal Bonus or Final Bonus: Terminal Bonus is paid at the time of maturity or at the time of claim. After declaring a reversionary Bonus, this is proclaimed as the terminal Bonus or final Bonus if anything is left in profits.
- Loyalty Additional (LA): After completion of the specific period, this one-time payment will be available to the policyholder.
- Guaranteed Addition (GA): There are some plans in which a company is obliged to pay a fixed amount to the policyholder for a set amount of time; this is called a guarantee addition.
Simple Reversionary Bonus
Simple Reversionary Bonus is an assurance bonus declared annually with profits.
It is based on the earnings of the life company’s investment.
It is payable at the end of the maturity period of the policy or after death.
Simple Reversionary Bonus declared based on percentage rate and calculated on the sum assured.
For example, if you hold a policy of Rs 1,00,000 Sum assured and the simple reversionary bonus for the year declared is Rs 50 per thousand sums guaranteed, then your bonus amount is Rs 50 * 1,00,000/1,000, which is Rs 5,000 for this year. Still, you cannot take it annually. This will be finalised at the end of the maturity period or after the death.
Find LIC Bonus by Sending SMS
Type a message: ASKLIC <POLICY NO> BONUS
And send it to 56767855.
* Charges will be applied for the SMS.
How do you find the LIC Bonus Details?
- Visit LIC official website.
- Login to the LIC website
- Select for the policy status
There you can find all the policies and their details accordingly.
How do you Calculate the LIC bonus?
Bonus for the LIC has declared per thousand sums assured.
- Find your LIC policy by name and table number.
- Find the row which matches with your term plans and the period of the policy.
- Bonus rate per thousand corresponds to the term plan.
- Know your sum assured of the policy you owned.
- The formula for Bonus Calculation:
Formula = (Sum Assured / 1000)*Bonus Rate
Example: Mr. Sen has taken Jeevan Anand’s plan for 15 years, and the sum assured is Rs. 10 lakhs. Now according to the LIC bonus rate, his bonus rate is 34 per thousand.
Which is Better, LIC Bonus or Private Insurance Company Bonus?
Many companies in the market offer you a bonus, and private companies also declare dividends for with-profit plans.
You can check their plan and compare them with LIC Insurance Plans.
Companies which offers a bonus with profit plans:-
- Kotak Insurance Policies
- ICICI Insurance Policies
- SBI Insurance Policies
- Sahara India Insurance Policies etc.
Reversionary Bonus Rates per 1000 Sum Assured
Group 1
Plan: Whole Life type (Plan 2, 5, 6, 8, 10, 28, 35, 36, 37, 38, 09, 77, 78, 85, 86)
- Term: NA
- 2016-17: 70
- 2015-16:70
- 2014-15:70
- 2013-14:70
- 2012-13:70
- 2011-12:70
Group:2
Plan: Endowment type / Plans 14, 17, 27/
After conversion, 28 after conversion, 34, 39, 40, 41, 42, 50, 79, 80, 81, 84, 87,90,91, 92,95, 101, 102,103, 109, 110 & 121
- Term: <11
- 2016-17:34
- 2015-16:34
- 2014-15:34
- 2013-14:34
- 2012-13:34
- 2011-12:34
Group:2
Plan:Endowment type / Plans 14, 17, 27/
After conversion, 28 after conversion, 34, 39, 40, 41, 42, 50, 79, 80, 81, 84, 87,90,91, 92,95, 101, 102,103, 109, 110 & 121
Term:11 TO 15
2016-17:38
2015-16:38
2014-15:38
2013-14:38
2012-13:38
2011-12:38
Group:2
Plan: Endowment type / Plans 14, 17, 27/
After conversion, 28 after conversion, 34, 39, 40, 41, 42, 50, 79, 80, 81, 84, 87,90,91, 92,95, 101, 102,103, 109, 110 & 121
Term: 16 to 20
2016-17:42
2015-16:42
2014-15:42
2013-14:42
2012-13:42
2011-12:42
Group:2
Plan: Endowment type / Plans 14, 17, 27/
After conversion, 28 after conversion, 34, 39, 40, 41, 42, 50, 79, 80, 81, 84, 87,90,91, 92,95, 101, 102,103, 109, 110 & 121
Term:>20
2016-17:48
2015-16:48
2014-15:48
2013-14:48
2012-13:48
2011-12:48
Group:3
Plan New Endowment Plan814:
Term: 12 to 15
2016-17:38
2015-16:38
2014-15:38
2013-14:NA
2012-13:NA
2011-12:NA
Group:3
Plan New Endowment Plan814
Term:16 to 20
2016-17:42
2015-16:42
2014-15:42
2013-14:NA
2012-13:NA
2011-12:NA
Group:3
Plan: New Endowment Plan814
Term: >20
2016-17:48
2015-16:48
2014-15:48
2013-14:NA
2012-13:NA
2011-12:NA
Group:4
Plan: New Money Back Plans 820 & 821
Term:20
2016-17:39
2015-16:NA
2014-15:39
2013-14:39
2012-13:NA
2011-12:NA
Group:4
Plan: New Money Back Plans 820 & 821
Term:25
2016-17:44
2015-16:NA
2014-15:44
2013-14:44
2012-13:NA
2011-12:NA
Group:5
Plan: New Jeevan Anand Plan 815
Term:
2016-17:
2015-16:
2014-15:
2013-14:
2012-13:
2011-12:
Group:5
Plan: New Jeevan Anand Plan 815
Term:15
2016-17:41
2015-16:41
2014-15:40
2013-14:NA
2012-13:NA
2011-12:NA
Group:5
Plan: New Jeevan Anand Plan 815
Term:16 to 20
2016-17:45
2015-16:45
2014-15:44
2013-14:NA
2012-13:NA
2011-12:NA
Group:5
Plan: New Jeevan Anand Plan 815
Term:>20
2016-17:49
2015-16:49
2014-15:48
2013-14:NA
2012-13:NA
2011-12:NA