LIC keeps improving bonus rates

LIC Bonus Rates

LIC keeps improving bonus rates and benefits on new policies depending upon the market trends. The bonus rates majorly depend upon the types of policies viz. participating policies and non-participating policies. In case of participating policies, the company gives away part of its profit to the agents. LIC is the leader in the participating policies in the market with more 3/4 market share to its credit. Given below is brief account of different types of bonuses offered by the company:
Simple Reversionary Bonus – This is not the compounding one and given away annually for the term of the policy and keeps added to the net amount of policy and paid either on maturity or claim against death of the insured person.

Final Additional Bonus (FAB) Or Terminal Bonus – This is a one time benefit added at the time of maturity of the policy. It is other than the SRB referred above and allowed on duly complete policies only. This is available on specific policies only.

Loyalty Additions – As the name suggests, this benefit is offered to the customers staying associated with the company for a specified long term. Guaranteed Additions (GA) – This is an amount added to a policy of specified term and paid at the time of maturity or claim.

Bonus Calculation: The given bonus rates are applicable on a per thousand per year basis in the form of Simple Reversionary Bonuses not compounded. For example a bonus of Rs.43 per thousand rupees on a policy of insured amount of Rs.10 Lakh can be calculated as 10,00,000 x 35/1000 = Rs.35,000 for the year.