How have LIC's bonus rates moved over the years? Tracking the long-term trend tells you what to expect from your existing policies — and helps you judge whether a new LIC plan is worth buying.
How LIC Bonus Rates Are Set
LIC declares bonus rates once a year, after its March 31 actuarial valuation. The rate depends on:
- Investment income earned by LIC's participating fund
- Mortality experience (claims vs expected)
- Lapse & surrender experience
- Operating expenses
Not all of LIC's surplus is distributed as bonus — a portion is kept as reserve, smoothing out year-to-year volatility.
Plan-Wise Bonus Trends (Indicative)
| Plan | 10 Years Ago | 5 Years Ago | Current |
|---|---|---|---|
| New Endowment (914) | ~₹35–₹44 | ~₹38–₹46 | ~₹38–₹48 |
| New Jeevan Anand (915) | ~₹37–₹45 | ~₹40–₹48 | ~₹41–₹49 |
| Jeevan Labh (936) | ~₹40–₹46 | ~₹42–₹48 | ~₹43–₹50 |
| Money Back 920 | ~₹36 | ~₹38 | ~₹39 |
*Approximate historical rates per ₹1000 SA per year, for indicative terms.
What the Trend Tells You
- Bonus rates have grown slowly but steadily — typical of a long-duration conservative fund
- LIC's declared bonus has never been zero in any year — the company has consistently paid bonuses for decades
- Longer-term policies earn higher bonus rates — a 25-year Jeevan Labh earns more per year than a 16-year one
FAB (Final Additional Bonus) Trends
FAB is a one-time loyalty addition. Its rate has also risen over the years as LIC's participating fund grew:
- 15-yr policies: ₹20–₹100/1000 (range over the years)
- 25-yr policies: ₹250–₹550/1000
- 30+ yr policies: ₹500–₹1000+/1000 — and these policies are rare but very rewarding
What This Means for Your Policy
- If you bought an endowment plan years ago, your maturity is likely to be better than the original illustration — bonus rates have mostly risen
- If you are buying new today, be conservative: assume the lower end of the rate band for your planning
- For long-term expectations (20+ years), assume ~4–5% effective tax-free return from LIC endowment plans
💡 Use our calculator to stress-test — try lower bonus rates (e.g., 10% less than declared) to see how your maturity value changes. It helps you avoid the "disappointed investor" trap.