Mumbai, Sep 2: Life Insurance Corporation (LIC) today announced a special one-time bonus ranging from Rs 5 to Rs 60 per thousand rupees of sum assured to policyholders as part of its Diamond Jubilee celebrations this year.
The move will benefit over 29 crore individual policyholders of the national insurer as well as over 12 lakh group policyholders.
This converts into Rs 500 for a policyholder with an assured sum of Rs 1,00,000, or Rs 6,000, depending on the duration of the policy, meaning older the policy or closer to the maturity date, maximum the bonus.
"We are happy to announce a special one-time bonus to our policyholders as we begin the Diamond Jubilee of our foundation," outgoing LIC Chairman S K Roy said here at a function presided over by Finance Minister Arun Jaitley.
The bonus will be eligible for policies in force as of March 31, 2016, and existing on or after September 1, 2016.
Even policies which have lapsed as of March 31, 2016 will be eligible provided they are subsequently revived, he said.
The Corporation has set a cut-off date of March 31, 1986 for the maximum benefit of Rs 6,000 per Rs 1 lakh of assured sum and March 31, 2015 for minimum amount of Rs 500 per Rs 1 lakh of assured sum.
The bonus amount will increase by Rs 500 each for every older policy with a five-year gap. For example, a policy that started in April 2011 will get Rs 1,000 for every Rs 1 lakh of assured sum between April 1, 2011 and March 31, 2016, which will keep increasing by Rs 500 each every five year.
The state-run insurance behemoth also said even policies which have lapsed will get the bonus provided they are revived in the year.
As per the LIC Act, the Corporation has to share as much as 95 per cent of its profit, which in LIC's parlance is called 'surplus' with the policyholders. The rest goes to the government as its owner. Accordingly, in 2014-15, LIC paid Rs 34,283 crore as regular annual bonus to the policyholders.
Meanwhile, today LIC handed over a cheque of Rs 2,502 crore to the government as part of its surpluses for the past fiscal year. In 2014-15, it had paid Rs 1,803 crore.
The function was also attended by junior Union Finance Minister Arjun Ram Meghwal, Financial Services Secretary Anjuly Chibb Duggal, LIC Managing Directors VK Sharma and Usha Sangwan and other board members of the Corporation.