What is Vested Bonus in LIC Policies?

Endowment Plans with profits like Jeevan Anand (815), New Endowment Plan (814), Jeevan Labh (836), are eligible to get share of profit earned by insurance company in the form of bonuses. These bonuses keep accumulating during policy term and known as vested bonus. The vested bonuses are scheduled to be paid in case of maturity or death.

In case of LIC, these bonuses are of two types:

  1. Simple Reversionary Bonus
  2. Final Addition Bonus (Terminal Bonus)

Simple Reversionary Bonus

It is main form of bonus which is declared per thousand of sum assured for each financial year during policy term and keeps accumulating. This accumulated bonus can be seen policy holder's account as vested bonus.

To understand this bonus, bonus history of LIC new Endowment plan (814) which was launched in year 2014 is listed below.

YearBonus per 1000 of Sum Assured
12-15 Years Term 16-20 Years Term 21-35 Years Term
2014 38 42 48
2015 38 42 48
2016 38 42 48

To understand vested bonus, let's take an example of New Endowment policy (814) with sum assured as 10,00,000, policy term as 21 and commencement year as 2014. As this policy progresses, year-wise bonus keeps adding, following table indicates bonus up to 2016.

Policy Year Bonus Rate (per 1000 of Sum Assured) Bonus
2014 48 48,000
2015 48 48,000
2016 48 48,000
Vested Bonus 1,44,000

So, above policy has accumulated Rs. 1,44,000 in three years (2014-16) and it is known as vested bonus and it will keep accumulating bonus for each year during policy year.

Final Addition Bonus

Final Addition Bonus (FAB) or terminal bonus is second type of bonus which is given to policy holders by insurance company from its earned profit. It is onetime bonus associated with year of maturity or death provided that policy has completed 15 year at time of death or maturity.

In case of maturity or death claim under endowment plans, total vested bonus is sum of simple reversionary bonus + Final Addition Bonus.

Comments & Reviews

Wrote : 02-05-2018 08:31:02

I have two New Money Back Plan, For LIC Agents all the people are saying Every 5 years after you will get your Amount (Vested Amount), After maturity you will get the Last Amount. Now you are saying All the amount we will get is after Maturity only. that mans what is the meaning for money back plan?

Replied : 02-05-2018 16:50:34
Above example is for endowment plan not for money back plan, in money-back plans, periodic money backs as per plan are provided, for example, in case of 20 year money back, policy holder shall get 3 money-backs on completion of 5th, 10th and 15th policy years and on completion of 20 years, maturity will be 40%of sum assured+ Bonus + Final Addition bonus.

Wrote : 02-05-2018 18:50:01

Hi, Thanks for your immediate Response, can you share the details how to Apply and get the Vested Bonus. for New Money Back Plan. Thank you..

Replied : 02-05-2018 23:42:57
Sir, it is not bonus that you will get after 5 years, it is 20% of sum assured and for receiving this, you just need to submit NEFT mandate [ Download ] for with cancelled check and Id proof at your branch and due money backs will be credited automatically.

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Wrote : 11-01-2018 10:07:50

Is there any interest earned on credited vested bonus

Replied : 11-01-2018 12:38:35
Interest on Bonus is not applicable.

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Wrote : 10-01-2018 10:50:54

How can i withdraw vested bonus? In my LIC policy (new endowment plan 814) vested bonus amount i can see, policy commenced on 28/03/2015. But whats the procedure to withdraw, is it possible to withdraw now?

Replied : 10-01-2018 13:37:29
No, bonus cannot be withdrawn as it is scheduled to be paid at maturity or in case of death claim.

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Wrote : 18-12-2017 17:23:47

Is it possible to get the vested bonus now after 3 years done, as it has credited into my lic policy. Since, my term of (New Jeevan anand 815) is 16 year and started in 2016 December. Please advise. Thanks in advance

Replied : 19-12-2017 12:31:27
Vested Bonus is scheduled to be paid at maturity only.

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Wrote : 25-09-2017 21:27:55

Is it possible to get the vested bonus now, as it has credited into my lic policy. Since, my term of Jeevan anand is 16 year and started in 2013. Please advise. Thanks in advance

Replied : 25-09-2017 21:41:05
No, it not possible to withdraw it separately.

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Wrote : 23-09-2017 14:12:41

Do we get vested bonus amount as well as sum assured amount at the time of maturity? Like sum assured of a policy is 50,000 and vested bonus is 30,000 then would I get total of 80,000 after maturity of policy?

Replied : 23-09-2017 17:47:08
Yes, in the plan( table 149, 814, 815, 836 etc) where maturity benefit is sum assured plus vested bonus, it will be so.

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Wrote : 30-06-2017 11:45:36

How do I find the actual accrued bonus for a policy on current date ?

Replied : 01-07-2017 20:01:29
You can register your policy at lic website to create policy holder account, once you log in to your account, you will be able to see bonus and other details related to your policy. Please note, new registration is temporarily disabled, your can try it after some time.

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Wrote : 14-05-2017 22:45:32

Can I withdraw the vested bonus amount.?

Replied : 15-05-2017 11:09:27
Vested bonus are scheduled to be paid at maturity.

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