Interest Rates Applicable – LIC Transactions
It is always good to be informed about the interest rates applicable for various financial transactions at Life Insurance Corporation of Inda (LIC). LIC carries out umpteen types of transactions in its day to day activities and the rates applicable varies considerably. Let us have a detailed analysis of the rates applicable to various transactions.
LIC Policy Loan Interest Rates
Generally, LIC offers policy loans from endowment and money back plans provided at least three full years are over from the date of inception and at least three full-year premium have been paid. Interest at the rate of 9.50 percent is charged for a policy loan from most of the plans.
Plan Detials | Interest rates applicable |
All Plans Except 195, 808, 809, 813, 826, 831, 837, 842, 845, 846, 847, 848, 850 and 853. | 9.50 % |
Plan 837 (Jeevan Shikhar). | 9.00 % |
Plan 195 (Jeevan Aastha), 808 ( Jeevan Vriddhi), 809 ( Jeevan Vaibhav), 813(Jeevan Sugam), 826(Jeevan Shagun), 831(Jeevan Sangam). | 10.00 % |
Plans 842(Pradhan Mantri Vaya Vandana Yojana), 845 (Jeevan Umang), 847(Jeevan Shiromani), 848(Bima Shree , 850) & 853 (Nav Jeevan). | 10.34 % |
Plan 846. | 10.84 % |
The table provided above shows the interest rates applicable to policy loans from various plans.
Interest Rates applicable for Revival of LIC Policies
Revival is the process of bringing the lapsed policies back to ‘life’ again. Policies get lapsed if the renewal premium is not paid within the period of grace. In order to revive the policy, you will have to pay the arrears of premium along with the interest thereof.
Read more: Online calculator to compute the revival amount of lapsed policies.
Plans | Interest rate |
All plans except 847,848 and 905 | 9.50 % |
Under plans 847 (Jeevan Shiromani), 848 (Bima Shree) and 905 (Cancer Cover) | 10.34% |
Interest rates applicable for Settlement Option in LIC
The Settlement option is a special facility to receive the claim amount in pre-chosen Number of installments. Settlement option will become handy if you want to create an annuity or help your child to meet educational expenses from the maturity amount available. Read more on Settlement option of LIC policies.
Settlement amount of all policies including the death and maturity Claim shall be calculated by applying 5.34 % of interest.
Interest offered for Advance Premium Payments in LIC
Facility to pay advance premium was available in most of the policies earlier but now this facility is limited to Jeevan Bharti (Plan 160) and Jeevan Bharti – 1 (Plan 192). The interest rate applicable for advance premium under these plans are 6.00 % as of now. So if you are paying one year advance premium the premium will be lesser by 6 %.
Delayed Payment of Claims – Interest offered in LIC
LIC of India is the best insurance company in India in terms of claim settlement. But still there can be delays in claim settlement. In case of such delays the corporation is liable to pay an interest on the outstanding claim amount at the rate of 8.25% per annum.
Discounting of Claims – rates applicable
Discounting is a special facility which allows the policy holder to claim the discounted value of the maturity benefit of a policy, during the last policy anniversary, within 12 months before the date of maturity. The interest charged for discounting maturity claim of LIC policy is 9.50 %.
Miscellaneous Rates applicable
No | Type of transaction | Interest Rate |
1 | Arrears of premiums for alterations and on Age proving higher | 9.50 % |
2 | Dating back of policies | 9.50 % |
3 | Reinstatement of Surrendered Policies | 10.50 % |
4 | Accumulation of SB under Jeevan Bharti (Plan 160) and Jeevan Bharti – 1 (Plan 192) | 4.00 % |
5 | Commutation of installments and income benefits under Educational/Annuity policies | 9.50 % |
6 | Unpaid installments under settlement options | 9.50 % |
7 | Discounted value or Accumulated value for calculation of SSV under Jeevan Saral Plan (Table 165) | 7.50 % |
If you have any doubts or queries, please feel free to use the comment section provided below.

Anish L J is a ‘Financial Planner’ and member of Chartered Insurance Institute(CII), London and Insurance Institute of India. He is also a finance, insurance and software consultant. He thoroughly follows the developments in finance, insurance, and other related sectors.