LIC Bima Bachat 175 Loyalty Addition Rate

Over the years, LIC has introduced several insurance schemes for the benefit of the people. LIC Bima Bachat offers many benefits in addition to traditional life cover as an impetus to encourage continuous association with its customers. Loyalty addition is one such feature that has ensured that customers keep their policies in force and remain protected under comprehensive coverage.

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Introduction to Loyalty Additions 

Loyalty addition is an exciting feature incorporated by several insurance companies in India. It encourages people to keep their policies in force, and in turn, they are rewarded with an additional sum in the form of loyalty additions. The extra amount serves as a means to optimize the savings corpus of the policyholders. Some key features are:

  • Loyalty additions are added as a one-time benefit to the base sum assured on death or maturity of the policy and paid off to the nominee or policyholder respectively as a lump sum amount.

  • Further, loyalty additions are non-guaranteed benefits and depend solely on the profits made by the company. 

  • The insurance company declares loyalty addition rates based on their annual valuation. 

  • Loyalty additions are fixed at a rate per Rs.1000 sum assured. Depending on the performance of an insurer in a particular quarter or year, the rate is subject to change.  

LIC’s Bima Bachat 175 Loyalty Addition Rate

LIC currently occupies nearly 3/4th of the insurance market share in the country. Among other players in the domain, LIC introduced various forms of bonuses and loyalty additions with their traditional life insurance schemes. 

The government-owned entity shares its profits or net surplus post valuation with its policyholders and fixes a rate of loyalty addition against specific policies. This is done in an attempt to maintain a loyal customer base. 

LIC Bima Bachat 916 is a newly updated version of the previously introduced LIC Bima Bachat 175. It is a participating policy, which essentially means that it participates in the profits made by LIC. Consequently, policyholders are entitled to additional returns in the form of loyalty addition. The amount is added to the policy account of the life assured, which they get access to on death, maturity, or surrender of the policy.

LIC Bima Bachat 916 loyalty addition rate is fixed every year after company valuation as an amount per thousand basic sum-assured. The bonus rates for each year can be found on the official website of the company. 

Further, with LIC’s New Bima Bachat 916 policy, any applicable loyalty addition shall be payable at a rate declared by the company under the following conditions:

  • If death of the life assured occurs after completion of the first five policy years, or

  • If the life assured survives till the maturity of the policy.

About LIC Bima Bachat 175

LIC’s Bima Bachat 175 plan was withdrawn in the year 2014, following which LIC’s New Bima Bachat 916 policy was introduced. The Bima Bachat policy is a type of money-back insurance scheme that offers benefits of savings as well as protection. The premium for this policy is paid in a lump sum during policy inception, after which policyholders can enjoy periodic survival benefits at fixed intervals. 

Let’s quickly look at the important features of LIC’s New Bima Bachat 916.

  • Death Benefit - Sum assured on death payable is equal to 1.25 times the single premium amount or the basic sum assured (whichever is higher). 

    • If the policyholder’s death occurs in the initial five years of the policy, LIC is liable to pay an amount equal to the base sum assured.

    • If the policyholder’s death occurs after the first five years, loyalty additions (if any) are paid along with the sum assured on death. 

  • Survival Benefit - The life assured is entitled to 15% of the basic sum assured on surviving each of the following years during the policy term chosen. 

    • At the end of the 3rd and 6th year of the policy, on choosing a policy term of 9 years. 

    • At the end of the 3rd, 6th, and 9th year of the policy, on choosing a policy term of 12 years.

    • At the end of the 3rd, 6th, 9th, and 12th years of the policy, on choosing a policy term of 15 years.

  • Maturity Benefit - The sum assured on maturity is payable to the policyholder along with loyalty addition. The amount is equal to the single premium amount paid at the time of purchase. 

Benefit Illustration for LIC Bima Bachat 916 Loyalty Addition Rate

Let us assume a 35-year-old male who has assured a sum of Rs.1,00,000 for a policy term of 9 years. The single premium payable comes to be Rs.72,540. The following illustration highlights the benefit payable along with the loyalty addition at an assumed 8% rate of return. 

Policy Year Survival / Sum Assured on Maturity (in Rs.) Sum Assured on Death (in Rs.) Loyalty Addition (in Rs.) Total Maturity Benefit (in Rs.) Total Death Benefit (in Rs.)
1 - 1,00,000 - - 1,00,000
2 - 1,00,000 - - 1,00,000
3 15,000 1,00,000 - - 1,00,000
4 - 1,00,000 - - 1,00,000
5 - 1,00,000 - - 1,00,000
6 15,000 1,00,000 5,000 - 1,05,000
7 - 1,00,000 6,000 - 1,06,000
8 - 1,00,000 7,000 - 1,07,000
9 72,540 1,00,000 10,000 82,540 1,10,000

Disclaimer: Policybazaar does not endorse, rate, or recommend any particular insurer or insurance product offered by an insurer.

Wrapping up!

Loyalty additions are non-guaranteed returns, and therefore, you must check with your agent/insurer to confirm the validity of the same for your policy. LIC Bima Bachat 916 loyalty addition rates are further subject to change based on the profits made by the company. These rates are declared annually and one is advised to research about the same before purchasing a policy.


*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
^Trad plans with a premium above 5 lakhs would be taxed as per applicable tax slabs post 31st march 2023
+Returns Since Inception of LIC Growth Fund
~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ
++Returns are 10 years returns of Nifty 100 Index benchmark

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