LIC bonus Rates 2020-21

LIC, India’s largest insurance company announced various types of bonuses based on benefits offered by the plans. Recently, LIC has declared the bonus rates of 2020-21 as per the evaluation of March 2020. Let’s discuss the common type of bonuses and the bonus rates of the current financial year.

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LIC Bonus Rates 

Life Insurance Corporation of India (LIC), the largest insurer of India was founded in 1956 with the merging of 245 other insurers and provident societies. This is the only public sector life insurance company with a huge customer base. The Claim Settlement Ratio i.e., CSR of 96.69% for the financial year 2019-20, provides a wide range of insurance products such as pension plans, ULIP plans, group plans, etc. fulfilling the various requirements of the customer. The two policies offered by the LIC are participating and non-participating policies. A participating policy shares the profit made by the insurer. In this, the profits are shared in the form of bonuses or dividends which are paid out annually. The bonus provided does not guarantee and same for the complete policy term. The main offering of LIC, on which the company’s core strength depends is traditional participating policies such as endowment plans. 

Types Of Bonus Rates 

When you purchase any product from LIC, your returns from the respective policy depend on the bonus rates of the company. The bonus rate is declared yearly. So, it is always good to keep a check on the bonus rates. 

The rates of bonus are based on some criteria which are policy term and sum assured. 

  • Policy Term – The higher the term, higher the rate 
  • Sum Assured – If you buy a policy of high sum assured, then the bonus accumulation will also be on a higher side. 

Various types of benefits such as loyalty addition, bonus, or final additional bonus, are offered by LIC policies. Here’s a quick laydown of types of bonuses. Let’s take a look: 

  1. SRB - Simple Reversionary Bonus 

    It is a nature of bonus that is announced by the insurer yearly and then it is added to the plan account. It is available to the life assured at the time of death and maturity. If a policyholder wants to surrender the policy, only a part of the whole accumulated bonus will be provided based on the surrender charge offered at that period. 

  2. Final Additional Bonus – FAB

    It is a 1- time added bonus that is along with the amount of maturity of participating policies. Final Additional Bonus is paid along with the SRB announced and then, added to the account of the policy. FAB is payable only at one time in a policy, thus ensuring a claim. 

  3. Loyalty Additions 

    These additions are payable only once called as one-time benefit under few policies in place of a SRB. Unlike SFB, loyalty additions are available to the assured only at the period when he/she exits the policy. Loyalty additions apply only to the plans which are getting exit in form of death, maturity, or surrender. 

Calculation Of LIC Bonus Rates

For example, if you buy a LIC policy of sum assured Rs. 5 lakhs and for 20 years i.e., the policy term. If Rs. 45 for a 1000 sum assured is declared as a bonus on such a product, then the calculation will be as mentioned below. 

Bonus for the year = 5,00,000 X 45/1000 

= Rs. 22,500

The declared bonuses for all years (till the policy maturity) will be combined at the maturity to find out the reversionary bonus of the returns at the time of maturity.  

Bonus Rates Of LIC 2020-21 

LIC has stated bonus rates for 200-21 as per the evaluation of March 2020. One of the major differences between the previous and current year’s declarations of bonus rates is that LIC has declared distinct rates of bonus for policies with a sum assured amount of more than 1 lakh. The below table of reversionary bonus rates are only applicable for the period 2019-20 and in force for the complete sum assured as of 31 March 2020. These rates are applied to the policies that result in claims by maturity/ death or surrendering the policy on or after 01 March 2020. Below mentioned is the list of basic policies offered by LIC which are closed. 

LIC Bonus Rates for 2020-21 as per the evaluation of March 2020 – Closed Plans 

Sl No.

Plan

Term*

Bonus Rates (Per 1000/- Sum Assured)**

SA <= 1 lac

SA > 1 lac

1

Whole Life Type Plans (2,5,6,8,10,28 - before
conversion,35,36,37,38,49,77,78,85 & 86)

65

66

2

Endowment Type Plans (14,17,27 - after
conversion, 28 -after
conversion,34,39,40,41,42,50,54,79,80,81,84,8
7,90,91,92,95,101,102,103,109,110 & 121)

<11

29

30


11 to 15

33

34


16 to 20

37

38


> 20

43

44

3

Money Back Plans (75 & 93)

20

34

35

25

39

40

4

Jeevan Surabhi Plans (106,107 & 108)

15

29

30

20

36

37

25

45

46

5

Jeevan Mitra - Double Cover and Jeevan
Saathi Plan (88 and 89)

<16

35

36


16 to 20

39

40


>20

43

44

6

Jeevan Mitra Plan - Triple Cover Plan (133)

<16

35

36


16 to 20

40

41


>20

45

46

7

Limited Premium Endowment Plan (48)

< 16 

35

36

16 to 20 

39

40

> 20 

44

45

Let’s discuss the bonus rates of the new policies offered by LIC: 

LIC Bonus Rates for 2020-21 as per the evaluation of March 2020 - New Plans

Sl No.

Plan

Term*

Bonus Rates (Per 1000/- Sum Assured)**

SA <= 1 lac

SA > 1 lac

1

New Endowment Plan 814 and 914 

12 to 15 

4

35

16 to 20 

38

39

>20 

44

45

2

New Jeevan Anand 815

15

37

38

16 to 20

41

42

> 20

45

46

3

Money Back Plans 820, 920 and 921

20

35

36

25

40

41

4

Single Premium Endowment Plan 817 and 917

10 to 15

37

38

16 to 20

42

43

> 20

47

48

5

Jeevan Labh 836

16

-

40

21

-

44

25

-

47

6

New Children Money Back Plan 832 and 833

13 to 15

34

35

16 to 20

38

39

> 20

44

45

7

New Jeevan Anand 815

15

37

38

16 to 20

41

42

> 20

45

46

8

Jeevan Lakshya 833 and 933

13 to 15

37

38

16 to 20

41

42

> 20

45

46

9

Jeevan Labh 836

16

-

40

21

-

44

25

-

47

10

Jeevan Umag 845 and 945

15

Up to 55 – (48,47,46, -)
56 to 70 – (57.,52,47,48)
71 to 85 – (64,59,53,47)
86 and above – (-, 67,62,57

20

25

30

11

Jeevan Tarun 834

13 to 15

34

35

16 to 20

41

42

>20

45

46

Wrapping It Up! 

LIC has recently introduced the bonus rates for 2020-2021 as per the evaluation of March. We have also discussed LIC bonus rates for the period 2019-20. Three types of bonus rates are available such as simple reversionary bonus, final additional, and loyalty additions bonus. The bonus rates depend on the policy term and sum assured, and they are declared annually by the insurer.

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

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