Every year, when LIC publishes its latest bonus rates, crores of policyholders rush to check what it means for their maturity value and family protection. Over the last decade, LIC bonus rates have remained broadly stable, with some visible cuts and structural tweaks after 2019 as interest rates and regulations changed. Understanding how LIC bonus rates last 10 years have moved—and how they are actually calculated—matters much more than simply staring at one headline number.

What LIC bonus really means

When you buy a traditional “with-profits” LIC policy (endowment, money-back, some whole-life plans), you participate in the insurer’s profits through bonuses added over the years. These bonuses are declared out of the surplus in LIC’s life fund after an actuarial valuation and are usually paid only at maturity or on death, not every year as cash.

The main bonus for most LIC policies is the Simple Reversionary Bonus (SRB), declared as a fixed rupee amount per ₹1,000 of Sum Assured for each eligible year. Once declared, this reversionary bonus becomes vested on your policy and is guaranteed, but future bonus declarations themselves are not guaranteed and can be raised, cut or skipped depending on LIC’s surplus.

Types of LIC bonuses you see

LIC’s bonus structure is not just one number; several components can appear in your policy bond or benefit illustration.

• Simple Reversionary Bonus (SRB): The annual bonus per ₹1,000 of Sum Assured that keeps getting added to your policy and is paid at maturity or death.
• Final Additional Bonus (FAB) / Terminal Bonus: A one-time extra amount usually paid on long-duration policies (often 15 years or more) that have run full term and are in force till the end.
• Loyalty Additions (LA): Non‑guaranteed additions paid on select plans as a reward for staying invested for the long term; often linked to policy duration and premium band.

These benefits are always quoted per ₹1,000 of Sum Assured or as slabs by term and premium band, so reading the tables correctly is crucial before doing any “return” comparison.

How LIC declares bonus rates

LIC pools premiums collected from policyholders into a life fund and invests primarily in long-term bonds, government securities and some equities. Actuaries periodically value this fund, compare assets with future liabilities and determine the surplus that can be shared with policyholders via bonus declarations.

The declared Simple Reversionary Bonus is expressed as “₹X per ₹1,000 Sum Assured” for each plan, policy term and sometimes Sum Assured slab (for example, higher rates for policies with larger Sum Assured). These bonuses are simple additions, not compound interest: each year’s bonus is added on the original Sum Assured, and the total is paid only at maturity or death.

LIC bonus rates last 10 years – what the data shows

There is no single “LIC bonus rate” because every plan and term has its own rate, but historical data across major plans shows a narrow band of simple reversionary bonuses over the last decade. For popular endowment and money‑back plans, long-term policies typically earned bonuses in the mid‑30s to high‑40s rupees per ₹1,000 Sum Assured, depending on term and Sum Assured.

For example, LIC’s Jeevan Lakshya (Plan 833/933), a widely sold endowment plan, saw bonus rates for longer terms (16–20 and 21+ years) at ₹45–₹49 per ₹1,000 Sum Assured from 2016 to 2019, before easing to about ₹42–₹46 from 2020 onwards. This pattern—stronger bonus levels pre‑2020 and slightly softer but still steady rates thereafter—matches LIC’s broader bonus declarations for many participating plans.

Sample trend: Jeevan Lakshya bonus rates

A quick look at Jeevan Lakshya’s historical simple reversionary bonus (per ₹1,000 Sum Assured) illustrates the decade’s broad direction.​

Illustrative LIC Jeevan Lakshya bonus history (per ₹1,000 SA)​

Over 2016–2019, bonus rates remained flat and relatively high for long-term policyholders, while from 2020 onwards there was a small step‑down of about ₹3 per ₹1,000 Sum Assured across terms. Similar moderate tweaks, rather than dramatic cuts, can be seen in LIC’s annual bonus lists for other major endowment and money‑back plans in 2022–23 and 2023–24.

Structural changes in recent years

In newer bonus declarations, LIC has introduced Sum Assured‑based slabs that reward higher cover with slightly better bonuses. For instance, some plans now have a three-slab structure where policies with Sum Assured above ₹10 lakh get a bonus that is ₹1–₹2 higher per ₹1,000 Sum Assured than smaller policies with the same term.

Money‑back plans also show two‑slab structures, where policies with Sum Assured above ₹5 lakh earn a marginally higher bonus rate per ₹1,000 than those below that threshold. These changes reflect LIC’s attempt to align bonuses with policy size and persistency, while keeping overall rates within a narrow band despite changing interest rate cycles.

How your maturity value is actually built

Because bonuses are quoted “per ₹1,000 Sum Assured”, many policyholders misread them as a percentage return. In reality, the bonus is added on the Sum Assured, not on the total premiums paid, and it doesn’t compound.

Take a simplified example similar to LIC’s own illustrations: assume a traditional plan with Sum Assured of ₹5,00,000 and a declared simple reversionary bonus of ₹45 per ₹1,000 for that year. Your bonus for the year is calculated as: bonus rate × Sum Assured ÷ 1,000 = ₹45 × ₹5,00,000 ÷ 1,000 = ₹22,500, which will be added to your policy and paid only at maturity or on death without any additional interest.

Why LIC bonus rates moved over the decade

LIC’s bonuses come from the surplus in the life fund after making conservative provisions for future claims, expenses and regulatory capital. When long-term interest rates fall or when regulatory norms become more stringent, insurers tend to reduce bonus rates slightly to keep promises sustainable for existing and future policyholders.

Over the last 10 years, LIC has spoken of record overall bonus payouts—over ₹50,000 crore for 2018–19 alone—while still stabilising individual plan rates to reflect a lower-yield environment and product redesigns. The movement from slightly higher pre‑2020 bonuses to modestly calibrated rates afterwards fits this macro backdrop rather than indicating any crisis.

What LIC bonus rates last 10 years mean for you

For policyholders holding traditional LIC plans for 15–25 years, bonus accrual over the last decade has been steady enough to build a meaningful maturity corpus—but rarely spectacular if you compare it with long-term equity returns. The combination of guaranteed Sum Assured plus accumulated simple reversionary bonuses and, in some cases, Final Additional Bonus or Loyalty Addition, typically translates to IRRs that are closer to conservative debt returns than equity‑like growth.

That is why many financial planners suggest treating LIC’s participating plans as low‑to‑moderate return, capital‑protecting instruments rather than aggressive wealth creators. Your key use-case is stable, tax‑efficient maturity proceeds and life cover—while high‑growth goals are better served through market‑linked products like equity mutual funds, direct stocks or equity‑oriented hybrid funds.

How to check LIC bonus for your specific policy

Because every plan and term has distinct bonus rates, the most accurate way to know your figures is to look at plan‑wise tables. LIC and several specialist sites host year‑wise bonus charts for each plan, such as Jeevan Anand, Jeevan Lakshya, money-back plans and others.

You can find historical bonus rates by visiting LIC’s official site or dedicated LIC bonus information portals that list simple reversionary bonuses, FAB and loyalty additions by plan and valuation year. Cross‑checking your policy bond (for plan number, term and Sum Assured) against these tables will give you a realistic picture of how much of your maturity value comes from bonuses built up over the last 10 years.

Balancing LIC bonuses with SIPs and market investing

Looking only at LIC bonus rates last 10 years can give a slightly narrow view of your overall financial plan. Traditional policies still make sense for guaranteed cover plus disciplined savings, especially for conservative investors or as a legacy tool.

However, many investors now prefer separating pure risk cover (term insurance) from wealth creation, using SIPs in equity mutual funds or direct shares through a Demat account to chase higher long‑term growth. For example, if someone already has older LIC policies with accumulated bonuses, they may keep them for stability while directing fresh surplus into a low‑cost brokerage platform such as an Angel One Demat account to run SIPs and build an equity‑backed goal portfolio in parallel.

This blend—stable LIC bonus‑based savings plus market‑linked SIP investing—can help smooth overall volatility while still giving you a shot at beating inflation over long horizons.

Key takeaways from LIC bonus rates last 10 years

• Bonus rates for major LIC participating plans have largely stayed within a narrow range, with modest reductions post‑2020 rather than sharp cuts.
• Simple reversionary bonuses are added on Sum Assured, not premiums, and they don’t compound—so IRRs are closer to safe debt returns than equity‑like returns.
• Structural tweaks such as higher bonus slabs for larger Sum Assured and refined money‑back structures reflect product modernisation, not instability.

For policyholders, the real work is to map these historical bonus rates to their own policy term and Sum Assured and then decide whether to hold, make the policy paid‑up or surrender based on overall portfolio needs rather than just one year’s bonus declaration.

Frequently Asked Questions (FAQs)

This breakdown should help you decode LIC bonus rates for last 10 years so you can read your own policy numbers with more clarity and align them better with your broader investing and SIP strategy.