LIC Bonus Rates 2017-2018 | with Charts and Illustrations

LIC Bonus Rates 2017-2018 | Bonus Rate Charts-old and new plans. Life Insurance Corporation of India (LIC), the largest insurer, and the only public sector life insurance company in India has recently declared the bonus rates for the valuation period from 1st April, 2016 to 31st March, 2017. Bonus rates are the rates at which life insurance companies provide additional returns to the traditional policy holders. So it is always advisable to track the bonus rates declared by the company.

LIC has declared bonus rates for the financial year 2018 – 2019 as per 2018 March valuation. Click here to open the article on LIC Bonus rates 2018-2019.

LIC bonus rate charts – How to read?

Normal bonus rates are declared as Simple Reversionary Bonuses in LIC. This means the bonus rates will not be compounded. Bonus rates thus declared shall be applicable for 1000 Rs. Sum Assured of the respective plan for the particular year.

For example: The bonus rate of New Endowment (Plan – 814) for 21 year term is Rs. 48 per 1000 Sum Assured. Let us assume that the policy is for a Sum Assured of 10,00,000.

So the bonus for the particular year will be 10,00,000 X 48/1000 —> Rs. 48,000

The bonuses thus declared for all the years till the maturity of the policy will be added together at the time of maturity to find the simple reversionary portion of the maturity returns.

You can calculate the maturity returns of your policies using Maturity Amount Calculators of LIC policies as per the latest bonus rates.

LIC Bonus Rates – Simple Reversionary Vs Final Addition Bonus

Simple reversionary bonuses are declared every year and are added to the policy account, as and when it is declared. On the other hand, Final Additional Bonus (FAB) is a one time additional bonus which is paid along with maturity of participating policies. Please note that Final Additional Bonus (FAB) is paid only once in the policies, resulting into claim, by maturity or discounted claim (Surrender of policies with one year preceding the date of maturity) or death claim.

One thing to note is that the bonus thus accrued to the policy account will become payable only at the time of maturity or the death of the policy holder. If the policy holder decides to surrender the policy in between, only the surrender value of the policy will become payable.

LIC Bonus Rates 2017-18 – New plans

Latest bonus rates of new plans (which are open for sale now) of LIC of India is provided here. The bonus rates for the year 2016 – 2017 is also provided to enable comparison.

Please Note:– For Jeevan Pragathi (Plan 838), the bonus rate has been increased for term 16-20.

LIC Bonus Rates 2017-18 – withdrawn plans

The bonus rate chart for withdrawn plants are given here. You may recall that all the insurance plans were withdrawn on 31/12/2013. Plans were restructured and relaunched later from 1/1/2014.

One Important point to note is that the bonus rates of Jeevan Nidhi (Plan 169) has been increased for all the four term ranges.

LIC bonus Rates 2017-18 – a brief analysis

Of-late, the financial market in India has been showing a continuous trend of reduction of interest rates. There were several instances of interest rate reductions in the past financial year itself. With this back ground, when we analyse the the declared rates, we can see that previous year bonus rates are maintained in all the policies. Two policies showed a marginal increase in rates also. This is a commendable achievement for India’s largest public sector insurer.

Interim bonus rates of LIC- When it is paid.

The interim bonus rates for the year 2017-2018 is shown in the chart. Generally the interim bonus rates are same as the normal bonus rates as far as LIC is concerned. Interim bonus rate are applicable to policies in respect of each policy year, entered upon, after 31/03/2017 and result into claims, by death or maturity (including those discounted within one year of maturity) or are surrendered during the period commencing from 01/01/2018 and ending 9 months from the date of next valuation.

Final Addition Bonus (FAB) Rates – 2017-18

As we have seen earlier, Final Addition Bonus (FAB) is a one time bonus paid along with final payment of the policy. Final Additional Bonus rates are dependant of certain factors which are often ignored at the time of purchasing an insurance policy. Minimum term required for the eligibility of Final Additional Bonus is 15 years.