Loan in LIC of India

Loan may be available to the policy holders of LIC of India subject to the conditions of the policy. The loan value is calculated based upon the surrender value.  Approximately 85 % to 90% of the surrender value will be the loan value. The interest for the loan will be around 9%. If the loan is not repaid properly then during the time of claim the interest along with the loan amount will be deducted from the claim amount and the remaining will be paid to the policy holder. I hope it is better to repay LIC loans

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• Loyalty Additions in LIC

LIC Loyalty Additions

There are differences between bonus and loyalty additions. These two should not be confused with each other. In most of the cases the loyalty addition will be declared for the policy holder based on the period for which he has paid the premium amount even in the case of death. The policy holder should have paid the premium for a minimum specified period to become eligible for the loyalty addition. But this is not the situation with bonus calculation. However the mathematical calculations are same for both the bonus and loyalty additions. The most important point here is that the loyalty addition will be given to the policy holder based on the experience of the company with the policy holder. For some insurances both the bonus amount as well as the loyalty additions are given to the policy holder.
For example if a proposer takes a policy for an amount of rupees 500000 for 20 years and if the loyalty addition is given at a rate of rupees 40 per 1000 sum assured then the total loyalty addition he would get will be 20 x 500 x 40 = 400000. And the total amount along with the maturity amount will be 500000 + 400000 = 900000 /-. This is one of the examples of calculating loyalty addition.

 

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• Bonus Amount in LIC

LIC Bonus amount

Bonus amount:

Bonus is a amount given to the policy holders apart from their maturity or death benefits. In india the highest bonus amount is given by the LIC of india. IRDA specifies the regulation for paying the bonus to the policy holders. 90% of the surplus amount got from the profit should be returned to the policy holders in the form of bonus. And the profit of an insurance company directly depends on the numbers. Since LIC of india is having more than 16 crore policy holders the amount of bonus given will be very high. Sometimes this may become more than the maturity sum assured. For example a person has taken a policy having maturity amount of rupees 500000 for a term of 20 years an if the bonus is calculated at an average of rupees 42 per thousand sum assured then the total bonus amount accrued for him at the end of 20 years would be 20 x 500 x 42 = 420000 which is just 80000 short from the maturity amount. And the total amount received by the policy holder will be 500000 + 420000 = 920000. That will be really great.

 

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• Loyalty Additions in LIC