LiC has a Sovereign Guarantee!
LiC collects money from the small saver. It pays commission ranging from 4% to 40% based on the product that it has sold, the remaining money gets invested.
Where does it invest? Well to keep the people happy it invests in Secured Government Securities. Chuckle chuckle who decides the price? Government of India! Does LIC have a choice of how much to buy and at what rate? Of course, theoretically.
Then it invests in shares of companies owned and managed by the government. Theoretically these are companies which have an independent board (some sadistic people think otherwise), takes business decisions (like NTPC spending Rs. 5 crores on advertising Indira Gandhi’s contribution to the nation), does independent product pricing (a Fortune 500 company that makes LOSSES when oil prices GO up).
Forget the sarcasm, come to reality. Will LIC be in a position to sell 10% of its holdings in the market without scaring the daylights out of the market? If a Cairn energy said ‘give me 10% of Ongc, here is a premium, will it be able to do so?’ No. Forget 10% of Ongc will the babu ‘allow’ a sale of 10% of ITC to a buyer who wants to take control along with BAT? No. The babus at ITC know how to stall such a request, do they not?
Now in such a well managed portfolio what returns should you expect to get?
Returns? You got to be joking.
People buy LiC policies to save TAX. Lic sells policies for the following:
a) to encourage thrift
b) to create infrastructure in the country
c) to create employment for 2 million agents, 200,000 employees, 20,000 vendors, ….et al.
d) if there is a surplus after this declare a bonus.
Ashish
🙂 good one Subra. LIC also sells policies to bail out Govt at times.
rajivahuja
Thanks Subra.Your scarscasm was not entirely lost.
Bhawin Jagad
So Very True 🙂
suresh
perhaps the caption should read “LIC IS the soverign guarantee”?
Amit
If only we could understand ‘I’ in LIC means Insurance & not investment 🙂
Arpit
@ Ashish And LIC also bails out the Government’s auction sale of its holding in one of the Fortune 500 companies 🙂
Online Marketing | Pandu
Suresh’s comment is Apt.
param
thanks for the eye opener! i wish i had read this 7-8 years back 🙁
C.J.GOPINATH
As on 31 March 2011, the corporation’s total assets stood at 13,17,416 crore, up from Rs11,52,057 crore in the previous fiscal.
State-owned life insurance giant LIC has recorded a 10% jump in net actuarial surplus for the 2010-11 fiscal at Rs22,716 crore which has helped it declare an additional bonus for seven of its ‘with-profit plans’.
Subra sir throw some light on this
surplus of 22176 on AUM at 1317416.
Amit Sarang
Subra Sir Please take note that this year Lic Has given more than 1100 cr. to Govt. 2007-2011 Five year plan Lic contributed 528390Cr. In Housing and Infrastructure Lic Has Invested 165003 Cr. In year 2010-2011.
v
Pl.send new posts on ECONOMY, MUTUAL FUNDS, FINANCE, BUSINESS,FINANCIALS…,
SR Rajkumar
Sir,
Good analysis. The returns on bonus given for different products in LIC is given below and pittance.
** RATES OF BONUS PER 1000 SUM ASSURED **
VALUATION DATE :- 31/03/2011 >>>>>>>>> VALUATION EFFECTIVE FROM 1/1/2012
Whole
Life
ENDOWMENT TYPE
POLICY TERM
Plan 88,89,48
Policy term
Plan 133
Policy term
Money Back &
Anticipated
10
&
les
s
11
to
15
16
to
20
21 &
Above
15
&
les
s
16
to
20
21 &
more
15
&
less
16
to
20
21 &
more
12
&
15
20 25
Reversiona
ry
& Interim
Bonus
70 34 38 42 48 40 44 48 40 45 50 32 39 44
Whole life plans:- 2,5,6,8,10,28( before conversion), 35,36,37,38,49,77,78,85,86
Endowment type plans:-14,17,27& 28( After conversion), 34, 39, 40, 41, 42, 50, 54, 79, 80, 81, 84,
87,90,91,92,95,101,102, 103,109,110,121.
Money back & Anticipated Endowment :- 24,25,26,73,74,75,76 & 93.
Jeevan Surbhi
Policy Term
(
106,107,108)
JEEVAN ANAND (149)
PREMIUM PAYING
TERM
JEEVAN REKHA-152
Premium Paying Term
JEEVAN
TARANG-178
Accumulation
period
15 20 25 UPTO
10
yrs
11
to
15
16
to
20
21
&
above
UPTO
10 yrs
11
to
15
16
to
20
21
&
above
10 15 20
Reversionary
& Interim
Bonus
34 41 50 36 39 43 47 49 44 40 34 46 46 48
JEEVAN ANURAG-168
Policy term
New Jeevan Suraksha-1
Plan 147
( Deferment period)
New Jeevan Dhara-1
Plan 148
(Deferment period)
UPTO
10
yrs
11
to
15
16
to
20
21
&
above
UPTO
5 yrs
6
to
10
11
to
15
16yrs
&
above
UPTO
5 yrs
6
to
10
11
to
15
16yrs
&
above
Reversionary
& Interim
Bonus
38 40 42 44 21 27 31 35 20 25 28 32
Jeevan
Madhur-
182
Child Career
Plan-Plan- 184
Policy term
Child Future plan
Plan- 185
Policy term
Jeevan
Bharati
Plan160
JEEVAN AMRUT
Plan no 186
Policy Term
Up
to
10
yrs
11
to
15
yrs
11
to
15
yrs
16
to
20
yrs
21
yrs &
above
11
to
15
yrs
16
to
20
yrs
21
yrs &
above
15
yrs
20
yrs
10
TO
15
16
TO
20
21
YRS
ABOVE
Reversionary
& Interim
Bonus
21 26 34 38 40 38 42 44 38 40 30 30 30
JEEVAN SHREE-1
Plan no 162
Policy Term
JEEVAN NIDHI
PLAN NO 169
JEEVAN
PRAMUKH-167
POLICY TERM *
JEEVAN
BHARATI-I
TERM-192
10
&
15
20
yrs
25
yrs
UPTO
10
yrs
11
to
15
16
to
20
21
&
above
10
&
15
20 25 15 20
Interim
Bonus
42 46 50 32 34 36 38 44 48 52 29 31
LOYALTY ADDITION AS PER VALUATION OF 31/3/2011è
The loyalty addition rates in respect of the plans given below will apply to all maturing
policies after remaining in force for full sum assured and also to policies discounted ( if
eligible for discount)in the last policy year of the policy. The loyalty additions are payable
in case of death claims ( if allowed under the plan) also. These rates are applicable during the
period commencing from 1/1/2012 and ending 9 months from the date of next valuation where
date of maturity /discount or death is on after 1/1/2012 to 31/12/2012.
FOR PLAN 135,136,142,143,158,171. RATES ARE PER 1000 SUM ASSURED PAYABLE ON MATURITY
ONLY AND PAYABLE ON DEATH CLAIM IF DATE OF DEATH IS IN THE YEAR OF MATURITY.
( IF DEATH TAKES PLACE PRIOR TO YEAR OF MATURITY , THEN LOYALTY ADDITION IS NOT PAYABLE UNDER
FOLLOWING TYPE OF PLANS) ( UNDER FOLLOWING PLANS , DISCOUNTING OF MATURITY CLAIM IS NOT
ALLOWED)
PAYABLE ON MATURITY CLAIM AND IF DATE OF DEATH IS IN THE YEAR
OF MATURITY ONLY- PER 1000 SUM ASSURED.
PLAN TERM LOYALTY ADDITION RATE
135- BAL VIDYA 11 250
135- BAL VIDYA 12 300
135- BAL VIDYA 13 350
135- BAL VIDYA 14 400
136- JEEVAN VISHWAS ALL 40
137-NAV PRABHAT ALL 90
142-NEW BIMA NIVESH 10 25
143-BIMA NIVESH TRIPLE 10 100
158- BIMA NIVESH 2002 10 100
171-BIMA NIVESH 2005 5 70
FOR PLAN 137- NAV PRABHAT ON DEATH CLAIM IN THE YEAR EXCLUDING THE YEAR OF MATURITY
PAYABLE ON DEATH CLAIM PER 1000 SUM ASSURED
PLAN TERM LOYALTY ADDITION RATE
137- NAV PRABHAT ALL 40
FOR PLAN 111- BIMA KIRAN ON MATURITY AND DEATH CLAIM BOTH ( DISCOUNTED VALUE OF THE
MATURITY CLAIM IS NOT ALLOWED
PAYABLE ON MATURITY AND DEATH CLAIM AS A PERCENTAGE OF
PREMIUMS PAID EXCLUDING EXTRA PREMIUM
PLAN TERM LOYALTY ADDITION RATE
111- BIMA KIRAN 15 TO 19 25%
FOR PLAN 150- NEW BIMA KIRAN LOYALTY ADDITION ON MATURITY AND DEATH CLAIM AS A
PERCENTAGE OF PREMIUMS PAID ( NOT TO BE APPLIED ON SUM ASSURED) ( DISCOUNTED VALUE OF
MATURITY CLAIM IS NOT ALLOWED)
DURA
TION *
POLICY TERM UNDER PLAN 150- NEW BIMA KIRAN
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
6 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2%
7 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3%
8 4% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3%
9 5% 4% 4% 4% 4% 4% 4% 4% 4% 4% 4% 4% 4% 4% 4% 4%
10 20% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5%
11 20% 6% 6% 6% 6% 6% 6% 6% 6% 6% 6% 6% 6% 6% 6%
12 20% 6% 6% 6% 6% 6% 6% 6% 6% 6% 6% 6% 6% 6%
FOR PLAN 113- CHILDREN MONEY BACK POLICY ON MATURITY AND DEATH CLAIM BOTH
( DISCOUNTED VALUE OF MATURITY CLAIM IS NOT ALLOWED)
PAYABLE ON MATURITY CLAIM ONLY AND DEATH CLAIM- PER 1000
SUM ASSURED.
PLAN DURATION
ELAPSED
LOYALTY ADDITION RATE
113- CHILDREN MONEY
BACK POLICY
UPTO 11 NIL
12 10
13 15
14 20
15 30
16 40
17 50
18 65
19 80
FOR PLAN 124,125,126- JEEVAN SANCHAY – LOYALTY ADDITION PAYABLE ON MATURITY OR DEATH
PER 1000 SUM ASSURED ( DISCOUNTED VALUE OF MATURITY CLAIM IS ALLOWED)
LOYALTY ADDITION PAYABLE ON MATURITY OR DEATH CLAIM RATE PER 1000 SUM ASSURED
DURATION
ON DEATH
AND TERM
ON
MATURITY
JEEVAN SANCHAY PLAN NUMBERS
124 125 126
13 10
14 25 10 10
15 50 20 15
16 30 15
17 40 20
FOR PLAN 128- JEEVAN SNEHA- LOYALTY ADDITION PAYABLE ON MATURITY AND DEATH CLAIM
( DISCOUNTED VALUE OF MATURITY CLAIM IS ALLOWED)
PAYABLE ON MATURITY AND DEATH CLAIM – RATE IS PER 1000 SUM
ASSURED
DURATION ON DEATH OR
TERM ONMATURITY
LOYALTY ADDITION RATE
13
14 10
15 15
16 20
17 30
FOR PLAN 159- LIC’S KOMAL JEEVAN PAYABLE ON MATURITY OR DEATH CLAIM
( DISCOUNTED VALUE OF MATURITY CLAIM IS NOT ALLOWED)
PAYABLE ON MATURITY OR DEATH CLAIM – RATE IS PER 1000 SUM
ASSURED
DURATION ON DEATH AND
TERM ON MATURITY
LOYALTY ADDITION RATE
ON SUM ASSURED
4 25
5 30
6 35
7 40
8 45
9 55
10 65
11 75
FOR PLAN 165- LIC’S JEEVAN SARAL PAYABLE ON DEATH CLAIM ONLY
( DISCOUNTED VALUE OF MATURITY CLAIM IS NOT ALLOWED)
PAYABLE ON DEATH CLAIM ONLY – RATE IS PER 1000 MATURITY SUM
ASSURED ( NOT DEATH SUM ASSURED)
PLAN DURATION LOYALTY ADDITION RATE
ON MATURITY SUM
ASSURED
165- JEEVAN SARAL 10 250
FOR PLAN 154,155,156,157- JEEVAN SAMRIDHI – LOYALTY ADDITION PAYABL ON MATURITY OR DEATH
PER 1000 SUM ASSURED ( discounted value of maturity claim is allowed)
LOYALTY ADDITION PAYABLE ON MATURITY OR DEATH CLAIM RATE PER 1000 SUM ASSURED
DURATION
ON DEATH
TERM ON
MATURITY
JEEVAN SAMRIDHI PLAN NUMBERS
154 155 156 157
6 20 20 20 25
7 25 25 25 30
8 30 30 30 35
9 40 40 40 40
10 50 50 50 50
11 80 70 60 60
PLAN 151- NEW JEEVAN SHREE – LOYALTY ADDITION PAYABL ON MATURITY OR DEATH PER 1000 SUM
ASSURED ( DISCOUNTED VALUE OF MATURITY CLAIM IS ALLOWED)
LOYALTY ADDITION PAYABLE ON MATURITY OR DEATH CLAIM RATE PER 1000 SUM ASSURED
DURATION
ON DEATH
TERM ON
MATURITY
NEW JEEVAN SHREE PLAN NUMBERS
151-10 151-15 151-20 151-25
8 35 35 35 30
9 70 40 40 35
10 130 45 45 40
11 50 50 45
12 60 55 50
PLAN 112- JEEVAN SHREE- LOYALTY ADDITION PAYABLE ON MATURITY OR DEATH PER 1000 SUM
ASSURED FOR REGULAR AND SINGLE PREMIUM POLICIES ( DISCOUNTED VALUE OF MATURITY CLAIM IS
ALLOWED)
DURATION
ON DEATH
TERM ON
MATURITY
POLICY TERM UNDER PLAN 112- JEEVAN SHREE- SINGLE PREMIUM AND REGULAR PREMIUM
BOTH
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
9 40 30 20 10 10 10 10 10 10 10 10 10 10 10 10 10
10 70 55 45 35 30 25 20 15 15 15 15 10 10 10 10 10
11 0 105 70 55 40 25 25 20 20 20 20 15 15 15 15 15
12 0 140 90 65 45 40 35 30 25 25 20 20 20 20 20
13 0 175 105 80 70 60 50 40 40 30 30 30 30 25
14 0 210 160 120 90 70 55 50 45 40 40 40 40
15 0 180 150 120 90 70 65 60 55 50 50
16 345 250 190 140 105 90 80 70 65 60
17 450 300 200 145 120 100 85 70 70
18 560 350 200 150 125 105 85 85
19 680 260 200 150 125 105 105
FOR PLAN 195- JEEVAN AASHTA – LOYALTY ADDITION PAYABLE IN DEATH CLAIM ONLY AS PER
PREMIUM BAND ( DISCOUNTED VALUE OF MATURITY CLAIM IS ALLOWED)
PAYABLE ON DEATH CLAIM – RATE IS AS PER PREMIUM BAND
DURATION OF
POLICY AS ON
DEATH
SINGLE PREMIUM BAND AMOUNT OF
LOYALTY
ADDITION
5 YEARS UPTO 99999 NIL
1,00,000 TO 1,49,999 300
1,50,000 TO 2,49,999 600
2,50,000 TO 3,49,999 1000
4,00,000 AND ABOVE 2000
NOTESè
· A loyalty addition is NOT payable for policies which are surrendered. But it is payable if policy is
discounted in last policy year provided last year’s premiums have remained to be unpaid.
· In the case of policies with mode of payment of premiums other than yearly, unpaid premiums if any,
falling due before the policy anniversary are deducted from the claim amount. Hence they should be
treated to have been received for this purpose and accordingly loyalty addition will be paid taking the
new duration.
· In case of maturity claims, if no premiums have been paid during the last policy year, but the policy
was in force for full sum assured on the policy anniversary prior to the maturity date. The claim is paid
for full sum assured on the maturity date along with guaranteed addition, reversionary bonus and
interim bonus sub to the deduction of the unpaid instalment of premiums with interest, if any, for the
last year of policy. Such policies will be eligible for payment of loyalty additions for full sum assured if
other qualifying conditions stated herein are satisfied.
· Where a policyholder discounts the policy within one year preceding the date of maturity, the policy
will be eligible for loyalty additions provided policy is in force as on date of discount or policy is in
force on last policy anniversary prior to date of maturity and o/s premiums are deducted, PROVIDED
PLAN IS ALLOWED FOR DISCOUNT.
· The policies for which death claim is payable as per claims concession clause, the loyalty additions
would be payable provided other qualifying conditions are satisfied.
· In case of Komal Jeevan plan, the duration elapsed is reckoned from the date of commencement of
risk. In short, loyalty addition is payable, if risk has commenced under the policy.
· In case of Bima Kiran plan-111, if death occurs in 15th policy year i.e duration of 14 year and 1 day
onwards, loyalty addition is payable provided policy is inforce for full sum assured and premiums are
recovered for 15th policy year.
FINAL (ADDITIONAL) BONUS PER 1000 SUM ASSURED FOR POLICIES
AS PER 31/3/2011 VALUATION
In addition to simple reversionary bonus and interim bonus, FAB is also payable in respect of
participating policies resulting into claims by maturity or claim discounted or death claims
during the period commencing from 1/1/2012 and ending 9 months from the date of next
valuation, provided they are kept in force for full sum assured till the date of maturity or
the date of discounting or the date of death as the case may be.
For plans- 2,5,8,28,35,36,37,38,49,77,78,85,86,14,17,34,39,40, 41, 42, 50, 54, 79,
80, 81, 84, 87,90,91,92,95,101, 102,103,109,110,121,88,89,48,133
# No. of years means term in respect of
maturity/ discounted maturity claim. In
case Death claim, no of years means
premiums paid or recovered.
1) FAB is payable on maturity,
discounted claim or in case of death
claim provided policy is in full force and
premiums have been paid/ recovered
for 15 years or more.
2) FAB is not payable under policies
where guaranteed addition is payable.
3) in case of death claims under single
premium/ fully paid up limited
premium payment policies the number
of years in the first column means the
no of policy years elapsed inclusive of
the policy year in which the death takes
place.
No of
years #
Year of valuation 31/03/2011
Up to
25,000
25,001 to
50,000
50001 to
1,99,999
2,00,000
& above
15 0 0 10 20
16 0 0 15 25
17 0 10 20 30
18 10 15 25 35
19 15 20 30 50
20 20 25 40 70
21 25 30 50 100
22 30 50 80 150
23 35 100 150 250
24 70 150 230 350
25 170 250 330 450
26 270 350 430 550
27 370 450 540 670
28 470 550 650 790
29 570 650 760 910
30 670 750 900 1100
31 800 900 1100 1300
32 950 1050 1300 1550
33 1100 1200 1550 1800
34 1250 1350 1700 2050
35 1400 1500 1850 2300
36 1550 1650 2050 2550
37 1700 1800 2250 2800
38 1850 1950 2500 3050
39 2000 2100 2750 3300
40 yrs
and
above
2150 2500 3000 3550
FINAL ADDITIONAL BONUS AS PER 31/3/2011 FOR PLANSè24,25,26,73,74,75,76,93
# No. of years means term in respect
of maturity/ discounted maturity claim.
In case Death claim, no of years means
premiums paid or recovered.
In case of fully paid up policies duration
elapsed means policy anniversary
following date of claim – DOC.
FINAL ADDITIONAL BONUS FOR PLANS 106,107,108- JEEVAN SURBHI AS PER 31/3/2011
# No. of years means term in respect of
maturity/ discounted maturity claim. In case
Death claim, no of years means premiums
paid or recovered.
In case of fully paid up policies duration
elapsed means policy anniversary following
date of claim – DOC.
· Where a policyholder discounts the policy within 1 year preceding the date of maturity, the policy will
be eligible for FAB provided other qualifying conditions are satisfied.
· In the case of policies with mode of payment of premiums other than yearly, unpaid premiums if any,
falling due before the policy anniversary are deducted from the claim amount. Hence they should be
treated to have been received for this purpose and accordingly loyalty addition will be paid taking the
new duration.
· In case of progressive protection plan -79 which are in full force, the FAB will be based on the sum
assured in force on the date of death/ maturity.
· For payment of final additional bonus under CDA plans like 41,50,80,81, the term/ duration at death
will be reckoned from the deferred date. In case of new CDA plan -92, the term/duration at death will
be reckoned from the risk commencement date.
· In case of Jeevan balya plan-101, the term / duration for paying final additional bonus would be
reckoned from the vesting date.
· In case of Jeevan Kishore plan -102 and Jeevan Sukanya plan- 109, the term or duration at death for
payment of final additional bonus would be reckoned from the date of commencement of the policy.
· In case of multi- purpose policies in respect of death claims, the FAB will be paid only at the end of the
original term along with the reversionary bonus.
· Where a non- participating policy has been altered to a participating policy, the period of FAB both as
regards death claim and maturity claims will be reckoned from the date of such alteration i.e policy
anniversary from which alteration has taken place.
· In case of convertible whole life policy plan 27 converted to with profit endowment policy after 5
years, the period for FAB will be reckoned from the scheduled date of conversion. Under plan 28, the
period will be reckoned from the date of commencement of the policy.
· In case of marriage endowment plan- 90 and Jeevan Chhaya plan- 103, in respect of death claim, the
FAB will be paid at the end of the original term along with reversionary bonus. FAB will be paid as per
rate of original term.
· The policies for which death claim is payable as per claim concession clause, the final bonus would be
payable provided in respect of number of years premiums recovered from claim amount.
· In case of maturity claims, if premiums have not been paid during the last policy year, but the policy
was in force for full sum assured on the policy anniversary prior to the maturity date, the claim is paid
for full sum assured on Maturity date with reversionary and interim bonus subject to recovery of unpaid
instalments of premium with interest for the last policy year. In such case, FAB is also payable for full
sum assured.
No of
Years #
Amount of final additional bonus per 1000
S.A.
Up to
25000
25,001 to
50,000
50,001
to
1,99,999
2,00,000
& above
Upto 14
yrs
0 0 0 0
15 to 19
yrs
0 0 15 20
20 yrs 0 10 30 40
21 to 24
yrs
10 20 30 40
25 yrs 40 150 175 225
No of
Years #
Amount of final additional bonus per 1000
S.A.
Up to
25000
25,001 to
50,000
50,001 to
1,99,999
2,00,000
& above
Up to 14 yrs 0 0 0 0
15 to 19 yrs 0 0 20 30
20 yrs 40 50 75 100
21 – 22 yrs 40 80 100 125
apart from this there are scams and we get nothing.