LIC declare Bonus rate every years but it not paid immediately, it will be paid at the time of maturity or premature death of policy holder. Bonus varies as per the plans term and condition.Bonus rate of LIC is declared on per thousand of sum assure(SA) basis.
Original bond paper consist the detail of type of bonus available in the Insurance PLAN. One can get bonus rate charts of desired year from LIC website home page
Types of LIC bonus
There are four types of bonuses declared by LIC.
Simple Reversionary Bonus
Final Additional Bonus (FAB) or Terminal Bonus
Loyalty Additions
Guaranteed Additions (GA
Simple Reversionary Bonus
What we simply meant when we say Bonus is this “Simple Reversionary Bonuses”. This bonus is declared per thousand of the Sum Assured Amount in each financial year by LIC but will be paid at the end of maturity period or on the death of the policyholder, whichever is earlier.
For instance if you are holding Jeevan Lakshya policy with Sum Assure amount of Rs.10 lakhs and policy term exceeding 20 years and the bonus declared this year is Rs.49, then your bonus amount would be Rs.49,000 for current year, but as said earlier, you will get this amount only at maturity or on death.
Final Additional Bonus (FAB) or Terminal Bonus
This is the second type of bonus declared by LIC termed as Final Additional Bonus (FAB). FAB is a onetime payment and paid only to those policyholders who have policy of longer duration, say 15 years and more, and has paid premium for all 15 years. Usually, policies having Guaranteed Additions are not eligible for FAB.
Loyalty Additions
Loyalty Addition is a non-guaranteed bonus which is given as an appreciation of being a long-term loyal customer of LIC. Usually this is also declared per thousand of sum depending and at the end of the policy term but for some policies it gets declared after completion of certain policy period such as in Jeevan Saral Policy, loyalty additions will be awarded to the policyholders after completing minimum of 10 years. But likewise FAB, loyal addition is also paid at the end of maturity period or on death whichever is earlier subject to completion of minimum policy period.
Guaranteed Additions (GA)
Some of the LIC Policies offers a “Guaranteed Additions” which means that policyholder will get an assured amount of sum for a specified period. For instance, Jeevan Shiromani policy provides a Guaranteed Additions of Rs.50 per year per thousand sum assured for first five years of the policy.
Another such policy is Komal Jeevan (Now closed plan). Guaranteed Additions are added with the Basic Sum Assured and paid at the time of claim.
How to Calculate LIC bonus
Suppose SA =10,00,000 and policy is taken for Term 30 yrs
Bonus declared = 49/1000
then 1000000X49X30
1000
=14,70,000
FAB declared = 1100/1000