Boom time for LIC policyholders

Friday 18, November, 2005 If you are a policyholder of Life Insurance Corporation, get prepared for some good news. If you own a policy, which has a profit component, you will be receiving a special bonus as announced by the corporation on account of its fiftieth anniversary. Apart from this, the Finance Minister has also announced a final additional bonus in addition to the special bonus, which will be rendered at the time of maturity. The bonuses announced will be extended to endowment, money back and whole life policies. It is necessary that the policies should have a profit component. If you have purchased a policy without profit then no bonus will be received at the time of maturity. For instance, you have an endowment policy of a sum assured of Rs 1 lakh bought in 1985, which covers death benefit. If this policy is maturing in the current year i.e. 2005, you will receive Rs 1,30,800 as the currant bonus rates for all 20 years. This bonus announced is Rs 26 per thousand and therefore you will be receiving a bonus of Rs 2,600 in additional to the regular bonus. The current rate of the regular premium being Rs 45 per thousand, you will receive an additional amount of Rs 12,000 since your policy is maturing in this 50th anniversary of LIC. So the net amount that you will receive will be Rs 1,42,800. If you own an endowment policy of a sum assured of Rs 1 lakh but does not mature this year, you will receive only the regular premium and the special bonus. You will not receive any additional bonus announced by the corporation. If you have a whole life policy of a sum assured of Rs 1 lakh. Assuming that your policy is due to mature this year, you will receive Rs 1,71,450 along with Rs 12, 000 as the additional bonus. This includes the special bonus of Rs 2,600. The corporation has announced a bonus of Rs 71 per thousand, on whole life polices. For endowment policyholders Rs 34-50 per thousand has been announced and Rs 32-45 per thousand for money back policyholders. LIC will increase the bonus of its pension plans, Jeevan Dhara and Jeevan Suraksha, while the terminal bonus will be retained wherever it is applicable. The outstanding performance of the stock market has reaped a lot of profits for the corporation and hence the bonus that the policyholder will be receiving is much better than the bonus received last year. However despite the outgo of Rs 2000 crore by the Income Tax Department, LIC has managed to offer a special bonus on account of its performance in the trading profits.

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