How to Calculate LIC Maturity Amount: Life Insurance Corporation of India (LIC) is one of the most trusted insurance providers, offering various policies for financial security. Understanding how to calculate the LIC maturity amount is essential to ensure that you are aware of your financial returns. The maturity amount includes the sum assured, bonuses, and any additional benefits applicable to the policy. If you have an LIC policy and want to estimate how much you will receive at the time of maturity, this guide will walk you through the step-by-step process, the formula, and important factors that influence the final amount.
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How to Calculate LIC Maturity Amount:
How to Calculate LIC Maturity Amount: LIC maturity amount is the total sum that a policyholder receives at the end of the policy term. It consists of three key components:
- Sum Assured: This is the guaranteed amount paid to the policyholder at maturity.
- Bonus: LIC declares bonuses every year based on its profits, and they are added to your policy. The most common types of bonuses are simple reversionary bonuses and final additional bonuses.
- Final Additional Bonus (FAB): This is a one-time bonus given at the time of maturity if the policy qualifies for it.
How to Calculate LIC Maturity Amount?
To calculate the maturity amount, you can use the following formula:
Maturity Amount = Sum Assured + Accrued Bonuses + Final Additional Bonus (if applicable)
How to Calculate LIC Maturity Amount: Let’s break it down with an example:
Suppose you have an LIC policy with the following details:
- Sum Assured: ₹5,00,000
- Policy Term: 20 Years
- Bonus Rate: ₹50 per ₹1,000 sum assured per year
- Final Additional Bonus (FAB): ₹10,000
Step-by-Step Calculation:
- Calculate Total Bonus:
Bonus per year = (Sum Assured / 1000) × Bonus Rate
= (5,00,000 / 1000) × 50
= ₹25,000 per year - Accrued Bonus for 20 Years:
= ₹25,000 × 20
= ₹5,00,000 - Total Maturity Amount Calculation:
= Sum Assured + Accrued Bonuses + FAB
= ₹5,00,000 + ₹5,00,000 + ₹10,000
= ₹10,10,000
Factors Affecting LIC Maturity Amount
Several factors influence how much you will receive at the end of your policy term:
- Policy Type: Different LIC plans offer varying benefits. Some plans have higher bonuses, while others focus on pure protection.
- Policy Term: The longer the policy term, the higher the accumulated bonuses.
- Bonus Rates: LIC declares bonuses annually, and the rate may change depending on the company’s profits.
- Final Additional Bonus (FAB): Not all policies qualify for FAB. It is usually given to long-term policies.
How to Use LIC Maturity Calculator Online?
How to Calculate LIC Maturity Amount: LIC offers an online maturity calculator on its official website. Here’s how you can use it:
- Visit the LIC website and navigate to the maturity calculator section.
- Enter details such as sum assured, policy term, and policy type.
- Select the bonus rate based on historical trends (or check LIC’s latest declarations).
- Click on calculate, and the system will display an estimated maturity amount.
Common Mistakes to Avoid While Calculating Maturity Amount
- Ignoring the Bonus Rate: Many policyholders forget to consider the bonus component, which significantly impacts the final amount.
- Not Checking Policy Terms: Different LIC policies have different bonus structures, and not all policies provide a final additional bonus.
- Assuming Fixed Bonus Rates: LIC bonuses fluctuate over time. Checking the latest declared rates is essential for an accurate calculation.
Frequently Asked Questions (FAQs)
Q1: How can I check my LIC policy maturity amount online?
You can check your LIC maturity amount by logging into the LIC customer portal and reviewing your policy details.
Q2: What is the bonus rate for LIC policies?
The bonus rate varies by policy type and term. LIC declares it annually based on its profits.
Q3: Can I withdraw my LIC maturity amount before the term ends?
No, the maturity amount is payable only after the policy term ends. However, some policies allow partial withdrawal under specific conditions.
Q4: What happens if I don’t claim my LIC maturity amount on time?
LIC holds the amount for a certain period, but it’s advisable to claim it as soon as possible to avoid complications.
Q5: Is the LIC maturity amount taxable?
If the premium paid does not exceed 10% of the sum assured, the maturity amount is tax-free under Section 10(10D) of the Income Tax Act.
Conclusion
How to Calculate LIC Maturity Amount: Calculating your LIC maturity amount is crucial to understanding your financial benefits. By considering the sum assured, accrued bonuses, and final additional bonuses, you can get a clear estimate of how much you will receive. Using an LIC maturity calculator can further simplify this process. Always stay updated with LIC’s bonus declarations to make accurate calculations. If you are planning your financial future, knowing your LIC maturity amount will help you make informed decisions about investments, savings, and overall financial security.