To coincide with its fiftieth anniversary, the insurance mammoth, Life Insurance Corporation of India (LIC) announced a special bonus for its policyholders on September 2005. Apart from the special bonus, the corporation announced a final additional bonus for its policyholders. The proceeds will be rendered at the time of the maturity of the policy.

On account of it’s golden jubilee celebrations, the Corporation announced a generous bonus of Rs 16.82 crore. As per the bonus announcement, policyholders till March 31, 1981 would receive additional Rs 50 per 1,000 insured while policyholders between April 1981 to March 2001 would receive between Rs 45 to Rs 6 per 1,000 insured as per their year of investment. Policyholders from April 2001 to date will get Rs 5 per 1,000 insured. LIC would spend an additional Rs 2,100 crore in payment of the golden jubilee bonus to its customers.

LIC, which was formed in 1956 is one of the largest public sector undertakings in the world with an assured sum of Rs 13,21,010 crore to date. LIC has contributed significantly towards the development of infrastructure like drinking water, electricity, housing, etc.

At present, LIC has grown into a $100 billion corporation with the assets value of Rs 4,40,043 crore and the Total Life Fund being Rs 3,85,000 crore as on March 31, 2005.

No Final (Additional) Bonus is payable in respect of death claims under Anticipated Endowment and Money Back Policies for all terms as also maturities in respect of Anticipated Endowment and Money Back Policies with terms 15 years or less. In respect of maturities under Anticipated Endowment and Money Back Policies with terms 20 and 25 years the Final (Additional) Bonus payable will be Rs.25/- and Rs.40/- per thousand Sum Assured, respectively. The aforesaid rates will be applicable to policies which mature between 1.1.2003 and 9 months from the date of next valuation. The Final (Additional) Bonus is not payable in the event of the policy being "surrendered" or "discounted" before the date of maturity. It is also not payable to paid-up policies.

No Final (Additional ) Bonus is declared in respect of annuity policies.

Reversionary Bonus Rates:

• Whole Life Policies - Rs.71.00 per thousand sum assured Bonus on various plans per thousand sum assured for 16 years and above is as under. The bonus depends on term of the policy. The bonus amount is higher for long term policies. Endowment Type Policies - range from Rs. 45.00 to Rs. 50.00
• Money Back, Anticipated Endowment - Rs.41.00 (term 20 years) & Rs.45.00 (term 25 years)
• Jeevan Mitra, Jeevan Sathi, Limited Endowment Policies - range from Rs.46.00 to Rs.51.00
• Jeevan Surabhi Policies - Rs.42.00 (term 20 years) and Rs.50.00 (term 25 years)
• Jeevan Anand plan - range from Rs.43.00 to Rs.47.00
• Jeevan Rekha Plan - range from Rs.34.00 to Rs.40.00
• Jeevan Anurag – range from Rs. 28 to Rs. 30
• New Jeevan Suraksha – I – range from Rs. 18 to Rs. 30 (%0 Notional Cash Option)
• New Jeevan Dhara – I – range from Rs. 18 to Rs. 28 (%0 Notional Cash Option)

Final (Additional) Bonus:
In addition to the above Reversionary Bonuses, LIC has also declared Final (Additional) Bonus and Loyalty Addition to give add on value to those policyholders who keep their policies in force. The rates of Final (Additional) Bonus are upto Rs.1,400 per thousand Sum Assured depending upon term and sum assured of the policy for policies fulfilling the stipulated conditions. Also, as in the previous year, the Loyalty Addition in respect of Jeevan Shree policies maturing on completion of term upto 9 years is Rs.75 per thousand Sum Assured and with policy term 10 years at the rate of Rs.125 per thousand Sum Assured.

Special Reversionary Bonus:
It may be mentioned that on the 1st September, 2005, the Golden Jubilee Year celebration was inaugurated by the Hon’ble Prime Minister Dr. Manmohan Singh. On the occasion a Special Golden Jubilee Reversionary Bonus ranging from Rs. 5/- to Rs. 50/- per thousand sum assured was announced by the Hon’ble Finance Minister Shri P. Chidambaram. That bonus was in addition to the bonus now declared.

The Simple Reversionary Bonus declared as a result of the valuation for all with-profit policies subject to the stipulated conditions, are as under:

• Whole Life Polices – Rs. 80.00 per thousand sum assured Bonus on various plans per thousand sum assured for 16 years and above is as under. The bonus depends on term of the policy. The bonus amount is higher for long term policies.
• Endowment Two Policies – range from Rs. 51.00 to Rs. 57.00
• Money Back, Anticipated Endowment – Rs. 46.00 (term 20 years) & Rs. 51.00 (term 25 years)
• Jeevan Mitra, Jeevan Sathi, Limited Endowment Policies – range from Rs. 52.00 to Rs. 58.00
• Jeevan Surabhi Policies – Rs. 48.00 (term 20 years) and Rs. 57.00 (term 25 years)
• Jeevan Anand Plan – range from Rs. 49.00 to Rs. 53.00
• Jeevan Rekha Plan – range form Rs. 39.00 to Rs. 45.00

The Bonus rates declared by the Corporation show a marginal adjustment over last year because of the fall in average yield on investments owing to overall declining interest rate scenario.

Bonus on Pension Plans:
The special feature of the valuation is declaration of bonus for the Individual Pension Plans – New Jeevan Dhara – I & New Jeevan Suraksha – I ranging from Rs. 18.00 to Rs. 24.00 per thousand Notional Cash Option.

Additional Bonus:
In addition to the above Reversionary Bonuses, LIC has also declared Final Additional Bonus and Loyalty Addition to give add on value to those policyholders who keep their policies in force. The rates of Final (Additional) Bonus are upto Rs. 1,400 per thousand Sum Assured depending upon term and sum assured of the policy for polices fulfilling the stipulated conditions. Also, as in the previous year, the Loyalty Addition in respect of Jeevan Shree policies maturing on completion of 5 years’ term is Rs. 75 per thousand Sum Assured and with policy term 10 years at the rate of Rs. 125 per thousand Sum Assured.

The Simple Reversionary Bonus declared as a result of the valuation for all with-profit policies subject to the stipulated conditions, are as under:

• Whole Life Policies - Rs.90.00 per thousand sum assured
• Bonus on various plans per thousand sum assured for 16 years and above is as under. The bonus depends on term of the policy. It is lower for short term and higher for long term.
• Endowment Type Policies - range from Rs.58.00 to Rs.64.00
• Money Back, Anticipated Endowment - Rs.52.00 (term 20 years) & Rs.58.00(term 25 years)
• Jeevan Mitra, Jeevan Sathi, Limited Endowment Policies - range from Rs.59.00 to Rs.65.00
• Jeevan Surabhi Policies - Rs.54.00 (term 20 years) and Rs.64.00 (term 25 years)
• Jeevan Anand plan - range from Rs.54.00 to Rs.59.00
• Jeevan Rekha Plan - range from Rs.58.00 to Rs.64.00

Bonus On Pension Plans:
The special feature of the valuation is declaration of bonus for the Individual Pension Plans – New Jeevan Dhara-I & New Jeevan Suraksha-I ranging from Rs.18.00 to Rs.24.00 per thousand Notional Cash Option.

Additional Bonus:
In addition to the above Reversionary Bonuses, LIC has also declared Final Additional Bonus and Loyalty Addition to give add on value to those policyholders who keep their policies in force. The rates of Final (Additional) Bonus are upto Rs.1,400 per thousand Sum Assured depending upon term and sum assured of the policy for policies fulfilling the stipulated conditions. Also, as in the previous year, the Loyalty Addition in respect of Jeevan Shree policies maturing on completion of 5 years’ term is Rs.75 per thousand Sum Assured.

The Simple Reversionary Bonus declared as a result of the valuation for all with-profit policies subject to the stipulated conditions, are as under:

Shri S.B. Mathur, Chairman, Life Insurance Corporation of India , today announced the Bonus rates for its policyholders for the year 2001-02 pursuant to the Actuarial Valuation as on 31st March, 2002 . The Valuation of the Corporation’s Assets and Liabilities is an annual exercise. A surplus of Rs.8,637.50 crore has emerged as a result of valuation. Out of the Surplus declared, 95% i.e. Rs.8,205.62 crore is distributed as Bonus to the holders of with profit policies which were in-force as on 31st March 2002 and 5% of the surplus i.e. Rs.431.88 crore is to be given to the Government of India as yearly dividend, Government of India being the stakeholder of LIC of India. The number of in-force policies under Individual Assurance and Individual pension plans has gone up from 11.30 crore to 12.81 crore as on 31st March, 2002.

The Bonus Rates per thousand Sum assured in brief for the various types of policies depending upon the term etc. are as follows:

• Bonus rate for Whole Life Policies is Rs.100.00
• Bonus rates for Endowment Type Policies range from Rs.49.00 to Rs.71.00
• Bonus rates for Money Back, Anticipated Endowment range from Rs.48.00 to Rs.65.00
• Bonus rates for Jeevan Mitra, Jeevan Sathi, Limited Endowment Policies range from Rs.60.00 to Rs.72.00
• Bonus rates for Jeevan Surabhi Policies range from Rs.51.00 to Rs.72.00
• Bonus rates for Jeevan Anand plan range from Rs.40.00 to Rs.65.00.
• The Corporation has reduced minimum period for accrual of bonus from 5 years to 3 years for in-force policies.

In general, policies of longer term acquire higher bonuses than policies of shorter term. Despite the lowering of the returns on the Government Bonds, Securities, Bank rates and Post Office Schemes, the Bonus Rates declared show marginal adjustment over last year. In fact the Bonus Rates in case of Whole Life Policies and Final Additional bonus have gone up.

The Simple Reversionary Bonus declared as a result of the valuation for all with-profit policies subject to the stipulated conditions, are as under:

• Bonus rates for Whole Life Type Policies range from Rs.95.00 to Rs.106.00
• Bonus rates for Endowment Type Policies range from Rs.54.00 to Rs.89.00
• Bonus rates for Money Back, Anticipated Endowment range from Rs.53.00 to Rs.72.00
• Bonus rates for Jeevan Mitra, Jeevan Sathi, Limited Endowment Policies range from Rs.65.00 to Rs.91.00
• Bonus rates for Jeevan Surabhi Policies range from Rs.56.00 to Rs.80.00

The Simple Reversionary Bonus declared as a result of the valuation for all with-profit policies subject to the stipulated conditions, are as under:

* Excluding Jeevan Mitra,(Double and Triple Cover), Jeevan Sathi, Limited Endowment (including Single Premium), Money Back, Anticipated Endowment and Jeevan Surabhi policies for which bonus rates are given in Column (7) to (16).

In addition to these Simple Reversionary Bonus rates, Final (Additional) Bonus rates were also announced for policies fulfilling the stipulated conditions depending upon term and sum assured of the policy. The Final (Additional) Bonus rates range from Rs.25/- to Rs. 1,250/- per thousand rupees Sum Assured.