LIC Bonus Rates – Complete details with Bonus calculation

LIC Bonus rates are most important for policyholders. Every year LIC declares bonus for their policies which participate in profits. In this article we will cover all the bonuses that LIC provides to their policyholders. We will also see how to calculate Maturity Value using bonus rates.

What is bonus in LIC policies?

• Traditional policies with profit participate in revenue sharing with LIC.
• LIC collects the premium from it’s policyholders and invests it in various instruments.
• Profits earned by LIC are shared in the form of Simple Reversionary Bonus (SRB), Final Addition Bonus (FAB), Loyalty Bonus etc. Let’s see each one in detail.

Types of Bonuses in LIC Policies

Simple Reversionary Bonus (SAB)

• This is the bonus which LIC declares every year.
• You will get this bonus at the time of maturity, death claim or at surrender claim.
• This bonus is not compounded and hence called a simple reversionary bonus.
• It is declared on a per 1000 sum assured basis.

Let’s understand with the example

Suppose Ram has taken the policy with the following parameters,

Sum Assured : 5 lakhs
Policy Term : 10 years

LIC declared simple reversionary bonus of 40 Rs per 1000 sum assured every year for 10 years

So every year ( 40 X 5,00,000 ) / 1000 = Rs. 20,000 SRB will be added to Ram’s policy account for 10 years. So total Rs. 20,000 X 10 years = Rs. 2,00,000 will be paid at the time of maturity.

Final Additional Bonus (FAB)

• Final additional bonus is a one time additional bonus which is paid at the end of the policy.
• This is paid at the time of maturity or death claim or surrender claim before 1 year from maturity.
• FAB is paid in addition to the simple reversionary bonus.
• FAB mainly depends on the duration for which the policy is active and the sum assured.

Let’s understand with the help of same example sa above:

LIC declared a final addition bonus of 70 Rs per 1000 sum assured.

So at the end of the policy term, Ram will get an additional (70 X 5,00,000 ) / 1000 = Rs. 35,000 FAB along with sum suured and SRB.

Loyalty Bonus (LB)

• As per the name suggests, few LIC policies based on their features provide a one time bonus for being loyal to the company.
• This is also calculated per 1000 sum assured.
• This LB is paid at the maturity, death or surrender.

Let’s take the example above.

Suppose LIC declares Rs. 30 per 1000 sum assured as loyalty bonus then Ram will get

So at the end of the policy term, Ram will get an additional ( 30 X 5,00,000 ) / 1000 = Rs. 15,000
LB along with SA and SRB

Guaranteed Additions (GA)

• As the name suggests, GA is pre defined in the plan and offered at the time of taking policy.
• This bonus is kept accumulating in the plan and paid at the time of maturity, d earth or surrender.
• It is as a percentage of sum assured or per 1000 sum assured.

Diamond Jubilee Bonus

• This is a special bonus which LIC declared on 1st Sep, 2016 on the occasion of founding day of LIC (60th Birthday).
• To be eligible for this bonus, all premiums should have been paid till 31st Mar, 2016 and policy should be active.

One – time Diamond Jubilee Bonus rates are listed below.

Policy Start Date	Bonus Rate (Per 1000 Sum Assured)
April 2011 to March 2016	5
April 2006 to March 2011	10
April 2001 to March 2006	15
April 1996 to March 2001	25
April 1991 to March 1996	35
April 1986 to March 1991	45
Prior to April 1986	60

Full forms of words in the LIC Bonus Rates :

SAB : Simple Reversionary Bonus
FAB : Final Additional Bonus
LB : Loyalty Bonus
GA : Guaranteed Additions
DJB : Diamond Jubilee Bonus

LIC Bonus Rates Calculation FAQs

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I hope this clears all the doubt about LIC Bonus rates and types. Please write your comment or feedback in a comment box. We will get back to you immediately.