LIC bonus rates for 2015-16 has been recently announced by Life Insurance Corporation of India. The Investment Returns on traditional life insurance policies like Moneyback or Endowment are mostly dependent on the bonus rates declared by LIC. So it is very important to track the Bonus rates of the LIC Policies that you have bought.
All the LIC Plans with the suffix ‘With Profits‘ are eligible for allocation of annual reversionary bonuses. When the bonuses are allocated they become vested with the policy and are payable on maturity or on death of the assured during the term of the policy.
The rate of bonus allocated depends upon:
- The Plan and Term of the policy.
- LIC’s Investment experience and the surpluses generated during the year.
- Bonus declared is always based on Sum assured and not on the premium amount.
LIC Bonus Rates 2015-16 (Old LIC Plans)
Below are the LIC’s Simple Reversionary bonus amounts for some of the popular Plans like Endowment Plans, Money Back, Old Jeevan Anand Plan, Jeevan Mitra etc., I have also provided the bonus rates for the last 6 years (LIC bonus rates from 2010 to 2015).
LIC Bonus rates 2015-16 (New Plans)
Below list has the LIC Bonus rates of newly launched plans during 2014-2015.
How to read the above table? How to calculate the bonus amount on my LIC policy?
In the above table, on “ New Jeevan Anand” 15 years plan – LIC has declared Rs 41 per Rs 1000 Sum Assured. If you had bought a similar plan for a Sum Assured of Rs 2,00,000 then the bonus amount on your policy would be Rs 8,200 ((SA/1000)*41). Like this, every year LIC declares bonus rates. The rates may vary. Remember, these bonus amounts are not paid to you immediately. They are accrued and paid on maturity or claim.
If you observe that the minimum bonus amount per Rs 1000 sum assured on new plans is Rs 38 and the maximum being Rs 51. The returns are pretty low. It is better to avoid investing in these kind of low-yielding Traditional plans for long-term.
(You may read my articles on : ‘Why you should avoid investing in Bank Fixed Deposits or Traditional plans for long-term?‘ & ‘Term insurance Vs Endowment Plans‘)
Besides Simple Reversionary Bonus, LIC also declares other types of bonuses like;
- Final Additional Bonus (FAB) (Final Additional Bonus and it’s paid to those policies which are of a longer duration and has run for say more than 15 years. This is a one-time payment.)
- Loyalty Additions & (These are similar to FAB)
- Guaranteed Additions. (The Guaranteed Additions are payable along with the Basic Sum Assured at the time of claim)
(Image courtesy of Stuart Miles at FreeDigitalPhotos.net) (I will soon try to provide details on LIC Loyalty Addition & Final Additional Bonus rates for 2015-16.)