Lic Cuts Minimum Period For Bonus
In a significant decision, Life Insurance Corporation of India (LIC) has reduced the minimum period for accrual of bonus from five years to three years for in-force policies even as the surplus arising out of the actuarial valuation of its assets and liabilities has been pegged at Rs 8,637.50 crore for the financial year 2001-02.
The corporation said 95 per cent of this surplus (Rs 8,205.62 crore) will be distributed as bonus to the holders of with profit policies and five per cent (Rs 431.88 crore) will be given to the government of India as yearly dividend.
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 March 31, 2002, LIC said in a statement.
Bonus rates per thousand for whole life policies is Rs 100 and that on endowment type policies ranges from Rs 49 to Rs 71. Bonus rates for money back, anticipated endowment range from Rs 48 to Rs 65.
Bonus rates for Jeevan Mitra, Jeevan Sathi, Limited Endowment Policies range from Rs 60 to Rs 72. Bonus rates for Jeevan Surabhi policies range from Rs 51 to Rs 72 and that on Jeevan Anand plan range from Rs 40 to Rs 65.
The Corporation said despite the lowering of the returns on government bonds, securities, bank rates and post office schemes, the bonus rates declared show marginal adjustment over last year. It added that bonus rates in case of whole life policies and final additional bonus had gone up.
The simple reversionary bonus declared as a result of the valuation in the case of endowment type policies ranges between Rs 49-71; Jeevan Mitra, Jeevan Sathi and Limited endowment: Rs 60-72; Money back and anticipated endowment: Rs 48-65; Jeevan Surabhi: Rs 51-72; and Jeevan Anand: Rs 40-64.
The final (additional) bonus rates range from Rs 25 to Rs 1,400 per thousand rupees sum assured, showing a growth especially for long-term policies as compared to Rs 25 to Rs 1,250 declared in fiscal 2000-01.
Also, the loyalty addition in respect of Jeevan Shree Plan for five year term has been increased from Rs 50 to Rs 75.