LIC Bonus Rates 2026: Latest Slabs, How They're Calculated & What They Mean for Your Maturity
If you own an LIC policy, you've probably seen 'bonus' on your documents — but do you know what rate you're actually getting and how it impacts your final payout? Let me break it all down.
First: The Two Types of LIC Bonus (Don't Confuse Them)
There is currently a lot of confusion online about 'LIC Bonus' — because the term refers to two completely different things.
1. The Shareholder Corporate Bonus (Stock Market)
For equity shareholders of LIC trading on NSE/BSE (NSE: LICI), the Board approved a 1:1 corporate bonus share issue with record date May 29, 2026. Your share count doubled, price adjusted 50% down. This is a stock market liquidity action — it does not affect your insurance policy in any way.
2. The Policyholder Actuarial Bonus (This Article)
This is the annual bonus declared for LIC insurance policyholders. It is a share of the valuation surplus from LIC's life fund, distributed to holders of 'participating' (with-profit) policies like Jeevan Anand, Jeevan Labh, and New Endowment. This is what determines your maturity payout — and this is what we cover here.
How LIC Actuarial Bonuses Are Declared
Every March 31st, LIC's actuarial team values all assets and liabilities of the life fund. By statute, LIC must distribute 95% of the participating fund surplus to policyholders — the remaining 5% goes to the government as promoter.
This surplus is declared every year on September 1st as a Simple Reversionary Bonus (SRB). Once declared, this bonus is legally guaranteed (vested) in your policy and is paid at maturity, death, or surrender.
- Simple Reversionary Bonus (SRB): Annual bonus declared as ₹X per ₹1,000 of Sum Assured. Does NOT compound.
- Interim Bonus: Applied when a policy matures or death occurs between two annual declaration dates.
- Final Additional Bonus (FAB): One-time terminal bonus paid only on policies completing 15+ years. Scales exponentially with tenure.
- Loyalty Addition (LA): Certain plans pay a one-time addition on exit instead of annual SRB.
The Game-Changing Sum Assured Step-Up Slabs
In recent valuations, LIC introduced a tiered step-up structure to reward higher coverage amounts. This means policyholders with larger Sum Assured (SA) get a higher bonus rate per ₹1,000.
Standard Two-Slab Structure (Most Plans)
Slab A (SA < ₹5,00,000): Base bonus rate.
Slab B (SA ≥ ₹5,00,000): Base rate + ₹1 per ₹1,000 SA step-up.
Slab B (SA ≥ ₹5,00,000): Base rate + ₹1 per ₹1,000 SA step-up.
Jeevan Labh Three-Slab Structure (Plan 736/936)
Slab A (SA < ₹5,00,000): Base rate.
Slab B (₹5L to < ₹10L): Base + ₹1 per ₹1,000 SA.
Slab C (SA ≥ ₹10,00,000): Base + ₹2 per ₹1,000 SA.
For a ₹10 Lakh SA on Jeevan Labh (25-year term), the +₹2 step-up adds ₹2,000 extra per year — or ₹50,000 extra at maturity before terminal bonuses.
Slab B (₹5L to < ₹10L): Base + ₹1 per ₹1,000 SA.
Slab C (SA ≥ ₹10,00,000): Base + ₹2 per ₹1,000 SA.
For a ₹10 Lakh SA on Jeevan Labh (25-year term), the +₹2 step-up adds ₹2,000 extra per year — or ₹50,000 extra at maturity before terminal bonuses.
LIC Bonus Rates Tables: All Active Plans (2025–26)
Verified Simple Reversionary Bonus rates across LIC's primary active participating plans.
Plan 914 — LIC New Endowment Plan
Classic savings-and-protection plan with flexible terms.
| Policy Term (Years) | SRB (SA < ₹5 Lakh) | SRB (SA ≥ ₹5 Lakh) |
|---|---|---|
| 12 to 15 Years | ₹35 per ₹1,000 SA | ₹36 per ₹1,000 SA |
| 16 to 20 Years | ₹39 per ₹1,000 SA | ₹40 per ₹1,000 SA |
| Over 20 Years | ₹45 per ₹1,000 SA | ₹46 per ₹1,000 SA |
Plan 915 — LIC New Jeevan Anand
Popular 'double cover' plan — life cover continues even after maturity payout.
| Policy Term (Years) | SRB (SA < ₹5 Lakh) | SRB (SA ≥ ₹5 Lakh) |
|---|---|---|
| 15 Years | ₹38 per ₹1,000 SA | ₹39 per ₹1,000 SA |
| 16 to 20 Years | ₹42 per ₹1,000 SA | ₹43 per ₹1,000 SA |
| Over 20 Years | ₹46 per ₹1,000 SA | ₹47 per ₹1,000 SA |
Plan 736/936 — LIC Jeevan Labh
Limited premium-paying endowment plan for long-term goal funding.
| Policy Term / PPT | Slab A (SA < ₹5L) | Slab B (₹5L–₹10L) | Slab C (SA ≥ ₹10L) |
|---|---|---|---|
| 16 Yrs (PPT: 10) | ₹40 per ₹1,000 SA | ₹41 per ₹1,000 SA | ₹42 per ₹1,000 SA |
| 21 Yrs (PPT: 15) | ₹44 per ₹1,000 SA | ₹45 per ₹1,000 SA | ₹46 per ₹1,000 SA |
| 25 Yrs (PPT: 16) | ₹47 per ₹1,000 SA | ₹48 per ₹1,000 SA | ₹49 per ₹1,000 SA |
Plan 733/933 — LIC Jeevan Lakshya
Popular as a child education plan — includes built-in premium waiver and annual income benefit on parent's death.
| Policy Term (Years) | SRB (SA < ₹5 Lakh) | SRB (SA ≥ ₹5 Lakh) |
|---|---|---|
| 13 to 15 Years | ₹38 per ₹1,000 SA | ₹39 per ₹1,000 SA |
| 16 to 20 Years | ₹42 per ₹1,000 SA | ₹43 per ₹1,000 SA |
| Over 20 Years | ₹46 per ₹1,000 SA | ₹47 per ₹1,000 SA |
Final Additional Bonus (FAB) — The Terminal Reward That Can Add Lakhs
The FAB is a one-time terminal payout added only at maturity or death — but only if your policy has run for 15+ years. It scales exponentially. The longer you stay invested, the bigger the jump.
| Completed Policy Term | FAB (SA < ₹2 Lakh) | FAB (SA ≥ ₹2 Lakh) |
|---|---|---|
| 15 Years | ₹10–₹20 per ₹1,000 SA | ₹25–₹40 per ₹1,000 SA |
| 20 Years | ₹40 per ₹1,000 SA | ₹70 per ₹1,000 SA |
| 25 Years | ₹330 per ₹1,000 SA | ₹450 per ₹1,000 SA |
| 30 Years | ₹900 per ₹1,000 SA | ₹1,100 per ₹1,000 SA |
| 35 Years | ₹1,850 per ₹1,000 SA | ₹2,300 per ₹1,000 SA |
| 40+ Years | ₹3,000 per ₹1,000 SA | ₹3,550 per ₹1,000 SA |
Notice the jump from 20 years (₹70) to 25 years (₹450) for SA ≥ ₹2L — that's a 540% increase in FAB for just 5 extra years. This is why surrendering a long-running policy near maturity is almost always a bad idea.
Real Calculation: How to Find Your LIC Maturity Value
Let's walk through a complete worked example so you can replicate it for your own policy.
Scenario: Rohan, Age 30 — LIC New Jeevan Anand (Plan 915)
Sum Assured: ₹10,00,000 | Policy Term: 25 Years | Annual Premium: ~₹46,000
Step 1 — Calculate Annual Simple Reversionary Bonus
Formula:
Since SA = ₹10,00,000 (≥ ₹5L), Rohan qualifies for the step-up slab. Rate for 25-year term = ₹47 per ₹1,000 SA.
Annual SRB = (10,00,000 ÷ 1,000) × 47 = ₹47,000 per year
Total SRB over 25 years = ₹47,000 × 25 = ₹11,75,000
(Sum Assured ÷ 1,000) × Bonus RateSince SA = ₹10,00,000 (≥ ₹5L), Rohan qualifies for the step-up slab. Rate for 25-year term = ₹47 per ₹1,000 SA.
Annual SRB = (10,00,000 ÷ 1,000) × 47 = ₹47,000 per year
Total SRB over 25 years = ₹47,000 × 25 = ₹11,75,000
Step 2 — Calculate Final Additional Bonus (FAB)
SA ≥ ₹2 Lakh, completed term = 25 years → FAB rate = ₹450 per ₹1,000 SA
FAB = (10,00,000 ÷ 1,000) × 450 = ₹4,50,000
FAB = (10,00,000 ÷ 1,000) × 450 = ₹4,50,000
Step 3 — Total Maturity Payout
Maturity = Sum Assured + Total SRB + FAB
= ₹10,00,000 + ₹11,75,000 + ₹4,50,000 = ₹26,25,000
Rohan paid ~₹46,000/year × 25 years = ₹11,50,000 in premiums. Maturity amount = ₹26.25 Lakhs. Effective IRR ≈ 5.2% to 5.5% per annum.
= ₹10,00,000 + ₹11,75,000 + ₹4,50,000 = ₹26,25,000
Rohan paid ~₹46,000/year × 25 years = ₹11,50,000 in premiums. Maturity amount = ₹26.25 Lakhs. Effective IRR ≈ 5.2% to 5.5% per annum.
Calculate Your Own LIC Maturity Value
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The Compounding Trap: Why 5% IRR Hurts More Than You Think
Here's the critical problem with LIC's Simple Reversionary Bonus system: it does not compound. Every year, Rohan earns ₹47,000 — but that ₹47,000 just sits in LIC's reserves earning nothing extra. Compare that to an equity mutual fund SIP where your gains themselves earn gains.
| Period | Cumulative Premium Outlay | LIC Endowment Payout (~5% IRR) | Equity MF SIP (~12% CAGR) | Wealth Gap |
|---|---|---|---|---|
| 10 Years | ₹12,00,000 | ₹16–18 Lakhs | ₹23.2 Lakhs | ~₹5 Lakhs |
| 15 Years | ₹18,00,000 | ₹26–30 Lakhs | ₹50.5 Lakhs | ~₹20 Lakhs |
| 20 Years | ₹24,00,000 | ₹38–45 Lakhs | ₹99.9 Lakhs | ~₹55 Lakhs |
| 25 Years | ₹30,00,000 | ₹55–65 Lakhs | ₹1.9 Crore | ~₹1.24 Crore |
By year 25, the compounding advantage creates a wealth gap of over ₹1.24 Crore on the same ₹10,000/month commitment. This is the hidden cost of bundling insurance with investment.
Tax Rules on LIC Bonus & Maturity: Income Tax Act 2025
| Old Section (1961 Act) | New Section (2025 Act) | Rule |
|---|---|---|
| Section 80C | Section 123 | Deduction up to ₹1,50,000 on eligible premiums |
| Section 10(10D) | Schedule II | Maturity proceeds tax-free if annual premium ≤ ₹5 Lakh |
| — | Schedule II | Death benefit 100% tax-free regardless of premium size |
The ₹5 Lakh Premium Cap Rule (Post April 2023)
If you bought a traditional LIC policy on or after April 1, 2023, and your aggregate annual premium across all such policies exceeds ₹5,00,000, the maturity returns are fully taxable at your income slab rate (as 'Income from Other Sources').
TDS on Taxable LIC Payouts
Resident with PAN: 5% TDS on net profit (maturity – total premiums paid) if profit > ₹1 Lakh.
Resident without PAN: Flat 20% TDS on full payout.
NRI: Flat 30% TDS + surcharges + cess.
Resident without PAN: Flat 20% TDS on full payout.
NRI: Flat 30% TDS + surcharges + cess.
4 Costly Mistakes LIC Policyholders Make with Bonuses
- Treating bonus as compound growth: LIC bonuses are simple interest on your flat Sum Assured. The ₹47,000/year Rohan earns never earns interest-on-interest — unlike equity MF returns that compound year after year.
- Surrendering in the first 3 years: You lose 30–50% of all premiums paid as surrender charges. If you need to exit, always wait for 3 full years. Better still, convert to 'Paid-Up' status.
- Confusing shareholder bonus with policyholder bonus: The May 2026 1:1 bonus share issue benefited LIC equity shareholders — it has zero impact on your insurance policy's maturity value.
- Ignoring inflation drag: India's CPI averages 5–5.5% annually. An LIC IRR of 5–5.5% means your real (inflation-adjusted) return is essentially zero over 20+ years.
The Verdict: How to Optimize Your Portfolio Around LIC Bonuses
LIC's guaranteed, sovereign-backed bonuses provide peace of mind — but they come at a steep opportunity cost over 20+ years. The optimal strategy isn't to abandon LIC entirely; it's to unbundle your capital.
1
Buy Pure Term Insurance for Protection
A ₹1 Crore term cover at age 30 costs just ₹10,000–₹12,000/year. Maximum protection, minimum cost. This is what LIC excels at.
2
Invest the Surplus in Equity Mutual Fund SIPs
Redirect the premium you were paying for an endowment plan into a diversified equity SIP. Over 25 years at 12% CAGR, this builds ₹1.9 Crore on a ₹10,000/month commitment — vs ₹26 Lakhs from a traditional plan.
3
If You Already Hold a Long-Running LIC Policy
Don't surrender a policy that is 10+ years old — especially if it's within 5 years of maturity. The FAB rate jump between 20 and 25 years is massive. Let it run to maturity and collect the terminal bonus.
Compare Your LIC Policy's Real Return vs a Mutual Fund SIP
Use BharatSaver's free calculators to see your exact maturity amount with bonuses — and compare it against what an SIP would have built.
Frequently Asked Questions: LIC Bonus Rates
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