LIC Bonus Rates History. 10-Year Track Record

What is LIC Bonus?

Every year, LIC invests your premium money in government bonds, stocks, and real estate. When these investments earn profits, LIC shares a portion with policyholders as 'bonus.' This bonus is added to your sum assured and paid out at maturity (or death).

There are two types: Simple Reversionary Bonus (declared every year, ₹X per ₹1,000 of SA) and Final Additional Bonus (one-time bonus at maturity for long-term policies).

Bonus Rates for Popular Plans (Last 5 Years)

Here are the approximate simple reversionary bonus rates declared by LIC:

• •New Jeevan Anand (915): ₹46-50 per ₹1,000 SA per year
• •Jeevan Lakshya (933): ₹46-49 per ₹1,000 SA per year
• •Jeevan Labh (936): ₹54-58 per ₹1,000 SA per year (highest among endowments)
• •Jeevan Umang (945): ₹45-48 per ₹1,000 SA per year
• •New Endowment (714): ₹42-46 per ₹1,000 SA per year
• •New Money Back 20yr (720): ₹42-45 per ₹1,000 SA per year

How Much Difference Does Bonus Make?

Let's take a real example. Suppose you have Jeevan Anand with ₹10 lakh SA, 20-year term, bonus rate ₹48/1000:

Sum Assured: ₹10,00,000. Annual Bonus: ₹10,00,000/1000 × ₹48 = ₹48,000 per year. Total Bonus over 20 years: ₹48,000 × 20 = ₹9,60,000. Plus Final Additional Bonus: ~₹1,00,000-2,00,000.

Total maturity: ₹10,00,000 + ₹9,60,000 + ₹1,50,000 = approximately ₹21,10,000. If you paid ~₹9,00,000 in total premiums, your effective return is about 2.3x what you paid.

Is LIC Bonus Guaranteed?

No. Bonus is not guaranteed. LIC declares it each year based on profits. However, LIC has declared bonuses EVERY SINGLE YEAR for decades without exception. The rates may vary slightly year to year, but they have never been zero.

This consistency is one of LIC's strongest selling points vs private insurers, who simply don't have enough history to show the same track record.

Should You Buy LIC Just for Bonus?

Bonus should be a secondary consideration, not the primary reason. Buy LIC for: life protection (primary), guaranteed savings discipline (secondary), and bonus as a cherry on top. If you're only chasing returns, mutual funds or PPF may give better numbers. But neither gives you life cover.

The 10-Year Pattern: What History Actually Shows

Three patterns stand out when you look at LIC's bonus declarations across the last decade.

First, the rates have stayed within a narrow band. The Jeevan Anand bonus rate has moved between roughly ₹40 and ₹50 per ₹1,000 of SA across the last decade. That is a 25 percent swing across 10 years, but in any given year the change versus the previous year has rarely exceeded ₹2 per ₹1,000. Stable, not flat.

Second, Final Additional Bonus is where LIC really shines for long-term policies. For a 25-year policy, the FAB at maturity often adds another 30 to 40 percent on top of the accumulated reversionary bonuses. This is rarely mentioned in agent pitches because it shows up only at maturity, not in annual statements.

Third, the bonus rate tracks LIC's overall investment performance, which has historically moved with broader Indian bond yields and equity returns. When the 10-year G-sec yield was around 8 percent in earlier years, bonus rates were higher. As yields softened toward 7 percent, rates settled lower. Not a coincidence.

When Bonus Math Should NOT Drive Your Choice

Plans that lean heavily on bonus appeal can mislead. Watch for these patterns.

• •The agent shows a projected maturity at the highest historical bonus rate, never at the lowest. Always ask for the 'low' and 'high' scenarios before signing.
• •The agent quotes the bonus as a percentage return without specifying per-thousand-of-SA. ₹48 per ₹1,000 is roughly 4.8 percent of sum assured, not your total return.
• •Single premium plans with bonus often have effective returns of 4 to 5 percent after charges. PPF at 7.1 percent simply outperforms unless you also need cover.
• •Plans with very short tenure (5 to 10 years) usually get little FAB. The total maturity is dominated by guaranteed addition plus a modest reversionary bonus. Do not expect the same compounding as a 25-year plan.
• •ULIP-disguised-as-traditional pitches. If the projected return looks like 9 to 11 percent in the brochure, it is market-linked, not bonus-driven. Read the plan type carefully.

Common Mistakes When Interpreting LIC Bonus Statements

• •Treating the annual bonus credited to your policy as cash in hand. The bonus accumulates on the policy and is paid only at maturity or death claim, not annually.
• •Comparing two plans with different sum assured purely on bonus rate. Higher SA earns proportionally higher bonus in absolute rupees even at the same rate.
• •Assuming the bonus rate declared in a given year applies to all policies issued in any year. Bonus rates differ by plan, by policy year cohort, and by sum assured band.
• •Selling a paid-up policy because the bonus 'looks small.' Bonuses on paid-up policies accrue at a reduced rate but still add up over decades. Often the right call is to keep it running.
• •Forgetting that special revisionary bonus or interim bonus is sometimes declared on death claims. The death benefit is not always limited to the maturity-time projected bonus.

Frequently Asked Questions

Q: When does LIC declare the bonus rate each year? A: Typically after the financial year close, usually between September and November. The rate applies to the financial year just ended.

Q: Does the bonus rate apply for the entire policy term once declared? A: No. Each year's bonus is declared separately. Your policy accrues different bonus rates in different years.

Q: How can I check the bonus credited to my policy? A: Use the LIC customer portal at licindia.in. The policy details page shows accumulated bonus year by year. Alternatively, ask your agent for the latest policy statement.

Q: Do term insurance policies receive bonus? A: No. Term plans have no maturity benefit and therefore no bonus. Only participating policies (endowment, money back, whole life) earn bonuses.

Q: Why is my friend's Jeevan Anand maturing for less than mine despite same premium? A: Most likely cause is different policy issue year (different bonus rate cohort), different policy term, or one is paid-up. Bonus values are not portable across policies.