Recently LIC declared the bonus rates for the year 2017-18. Let us see the complete details about LIC Bonus Rates for 2017-18 and how they affect your life insurance returns.
When you buy a traditional with profit product from LIC, then your returns from such policy mainly depends on what will be the rate of bonus. LIC declares bonus on the yearly basis. Usually, you will not find any such drastic change. But it is always better to track the bonus rates.
Let us say you bought LIC’s Jeevan Anand for the term of 20 years and sum assured as Rs.5,00,000. If LIC declared bonus as Rs.45 for this product, then the calculation will be as below.
The bonus rates will be based on three criteria.
# Term of policy-Higher the tenure means higher the rate.
# Sum Assured-LIC bonus depends on per Rs.1,000 of Sum Assured. Hence, if you bought higher sum assured policy, then your bonus accumulation will be at the higher end.
So from above example, if LIC declared you Rs.45 as bonus per Rs.1,000 sum assured for 20 years policy, then the bonus accumulation for that year will be as below.
Rs.22,500=(Rs.45 x Rs.5,00,000)/Rs.1,000.
Remember this Rs.22,500 will not be payable to you. But it will be with LIC and you receive this amount during the time of death claim or maturity. The most important point to note that they will not add any amount on this Rs.22,500. It will remain same till the period of death claim or maturity date.
In simple, I explained how to calculate bonus for a year. But LIC offers different products like the endowment, limited endowment or money back plans. In such a situation, you may find it difficult to calculate returns on your LIC plan. Hence, I created a video about this.
This below video will explain you about how to calculate returns on your LIC plans using excel sheet. It is too simple and convenient for you to calculate.
Hope you got the clarity about the importance of bonus rates for your traditional plans. Now let us concentrate on recently declared LIC Bonus Rates for 2017-18.
The below reversionary bonus rates are applicable for policy year entered upon during the inter valuation period i.e. 01/04/2016 to 31/03/2017 and in force for full sum assured as on 31/03/2017. It would apply to policies resulting into claims by death or maturity (including those discounted within one year of maturity) or surrendered on or after 01/01/2018.
The above interim bonus rates are applicable to policies in respect of each policy year entered upon after 31/03/2017 and result into claims by death or maturity (including those discounted within one year of maturity) or are surrendered during the period commencing from 01/01/2018 and ending 9 months from the date of next valuation.
No cash bonus has been declared in respect of New Jeevan Akshay – I (Plan 146).
This time, I separated the plans in two ways. One for the old policies which are closed and another list for the new policies which are currently available for purchase.
Note-The Bonus rates which are marked in red are changed from earlier rates. For example, earlier for Jeevan Surabhi (Plans 106, 107 and 108), the bonus rate for 11 to 15, 16-20 and above 20 years plans was Rs.38, Rs.42, and Rs.44 respectively. Not it changed to Rs.34, Rs.41, and Rs.50 respectively.
Let us now look at the bonus rates of the new plans which are currently offered by LIC.
Note-For Jeevan Pragati (Plan 838), earlier for policies whose term is between 16 years to 20 years was Rs.40. But now it increased to Rs.41.
For LIC’s Jeevan Saral, Bonus will not apply. But it is LA based on the MSA (Refer my post “LIC’s Jeevan Saral-Why so much confusion?). This was the LIC’s special plan. Let us see the LA rates for this plan.
Along with Simple Reversionary Bonus, LIC also declares other types of bonuses like;
Note-It is hard for me to share all plans FAB and LA rates. Hence, if you have a specific query related to FAB or LA rates, then you can comment it here and I will try to share the same.
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View Comments
Sir
Thank you for sharing the information. It is very helpful.
Can you please suggest if the bima gold plan 174 is applicable for any loyalty bonus ?
Dear Subinoy,
Yes.
Sir I am holding Jeevan chhaya plan
(103) SA-10000 .
20 years plan
Maturity date 25/10/2021
Pl tell me loyalty amount& maturity total amount
Dear Padma,
Please visit the branch to know the exact values.
Hello Sir,
I took Jeevan Saral plan on 05/01/2011 with Sum assured of 1390700/- and I am paying premium of Rs.5104 in monthly. I shall be surrender my policy as on 06/01/20210 (10 years completed). how much amount get me.
Dear Lovkesh,
Please approach the concerned branch.
Sir I am holding Jeevan saral plan. SA-500000 I have paid for 9 years out of 20 years. What will be expected maturity amount?
Dear Prasanna,
The returns may be around 4% to 5%.
For 179 the loyalty addition as you have mentioned is 100 per LA which is very less. Is the fig. correct?
Dear Guru,
Yes.
I have purchased a Jeevan Shree in 2001 with a yly premium of 30704/- for 16 yrs and paid all the premium the maturity date is 2026 but I need money now how much will get ?
Dear Ashish,
Approach the nearest LIC Branch.
Hi, how certain is LIC bonus and how much variation is possible? I mean is it risky may be like stock market? My main agenda is investment but I need to take one life insurance policy. Can you please tell me the non-market linked endowment LIC life insurance plan giving best returns or xirr.
Dear Gupta,
Do you in need of LIFE INSURANCE or an INVESTMENT PRODUCT?
I need life insurance giving good returns with good certainity
Is it possible to get LIC endowment policies bonus rate prior to 2003? If you have please share.
Dear Gaurav,
Yes, find the same in LIC website.
Dear Sir,
What I could read from the internet is that one time FAB is applicable for all the policies which are more than a tenure of 15 years at the time of Maturity/Death. I have a Jeevan Saral 165 policy for 35 years. Am I eligible for both LA and FAB at the end of maturity ?
Dear Praveen,
Forget about what you read for a moment. Do you feel such FAB really a great game changer in terms of returns??
Hi Sir,
Thanks for your quick response. Let me use the latest FAB rate(2018-2019) as reference to calculate in my case(Rs.18,375 /- Quarterly for 35 years). Since my Sum assured is more than 2 Lakhs and the policy term is for 35 years, the FAB rate is Rs. 2300 for 1000 sum assured
scenario 1- Assuming FAB rate is calculated on the basis of Death Sum Assured (which is 15 Lakhs in my case), it will be (2300*1500000)/1000 = Rs. 34,50,000/-
Scenario 2 - Assuming FAB rate is calculated on the basis of Final Maturity Sum assured( In my case, as per the online maturity calculator, approx . Maturity sum assured will be Rs.31,44,300/- ). So the Final FAB calculation will be (2300*3144300)/1000 = Rs.72,31,890/-
Considering the above scenarios, if the FAB is given at the time of maturity along with LA + maturity sum assured, then it could yield a better amount for the rates during that period?
Please let me know your comments.
Dear Praveen,
May I know what will be the value of today's your calculated Rs.34,50,000 and Rs.72,31,890 after 35 years? Don't judge the numbers rather calcualte the IRR and let me know how much it makes a difference. This is where many do the mistake.
Sir, Kindly publish the Rates for LA and FAB of current LIC Policies how to calculate them.
Thank you.
Dear Sitesh,
I do once I get the information on the same.