Life Insurance Corporation of India (LIC) has long been the cornerstone of insurance planning for Indian families. While most policyholders are aware of the basic benefits like maturity returns, death cover, and tax exemptions, there are several hidden advantages that often go unnoticed. In this blog, we uncover 5 such lesser-known LIC benefits that could enhance your financial planning in 2025.
🔍 Table of Contents
- Policy Loan Options with Low Interest
- Revival of Lapsed Policies
- Riders that Add Real Value
- Wealth Creation via Bonus
- Integration with Government Schemes
- FAQs
- Conclusion
🔎 1. Policy Loan Options with Low Interest
✅ What is it?
LIC allows you to borrow against your policy after a certain lock-in period. The interest rates are often lower than personal loans from banks.
✅ Why is this hidden?
Most people aren’t aware that you can borrow up to 90% of the policy’s surrender value without affecting the policy benefits, provided premiums are paid up.
✅ Key Benefits:
- No need for credit score checks
- Lower interest than personal loans
- Quick processing with minimal documentation
💡 Tip:
Use it for emergencies instead of liquidating fixed deposits or gold.
🔄 2. Revival of Lapsed Policies
✅ What is it?
If you miss premium payments and your policy lapses, LIC offers a grace window of up to 5 years to revive it under special schemes.
✅ Why is this important?
Instead of starting a new policy from scratch, revival helps retain all previously earned bonuses and cover continuity.
✅ Types of Revival:
- Ordinary Revival: Pay all pending premiums with interest
- Special Revival: Change policy commencement date and back-pay
- Loan-Cum-Revival: Use policy loan to revive your lapsed policy
🛠️ Tip:
Always talk to your LIC agent before discarding a lapsed plan. Revival might be more cost-effective.
💡 3. Riders that Add Real Value
✅ What is it?
Riders are add-ons that enhance your base policy. LIC offers riders like:
- Accidental Death Benefit
- Critical Illness Rider
- Premium Waiver Rider
✅ Why are they hidden?
Most customers opt for the base plan and skip riders without understanding their utility.
✅ Real Example:
The Accidental Death Benefit Rider can double the sum assured if death occurs due to an accident. It costs just a few hundred rupees annually.
🛡️ Pro Tip:
Riders are cheaper when added early in the policy. Don’t skip them.
💰 4. Wealth Creation via Bonus
✅ What is it?
LIC is known for sharing its surplus profits with policyholders via Reversionary Bonus and Final Addition Bonus (FAB).
✅ Why is it overlooked?
Many policyholders do not track or understand how compound bonus accrual boosts final maturity value.
✅ Types of Bonuses:
- Simple Reversionary Bonus: Added annually
- Final Additional Bonus: One-time, on policy maturity
📈 Example:
A ₹5 lakh sum assured policy could grow to ₹8–10 lakh at maturity with accumulated bonuses—completely tax-free.
🇮🇳 5. Integration with Government Schemes
✅ What is it?
LIC is integrated with several government programs and social security schemes, especially for low-income groups.
✅ Programs Linked with LIC:
- PMVVY (Senior Citizens Pension Scheme)
- Aam Aadmi Bima Yojana (AABY)
- Janashree Bima Yojana
✅ Why is this hidden?
These are under-publicized, but extremely beneficial for rural and senior citizens.
👨👩👧👦 Social Impact:
LIC also offers scholarship benefits to children under certain schemes like AABY—something even educated parents are unaware of.
❓ FAQs: Frequently Asked Questions
👉 Q1: Can I take a loan on my LIC policy without affecting the benefits?
Yes. If premiums are paid up and your policy has acquired a surrender value, you can avail a loan up to 90% of that value.
👉 Q2: What happens if I forget to pay LIC premiums?
Your policy may lapse, but LIC provides multiple revival options for up to 5 years.
👉 Q3: Is LIC better than term insurance plans?
LIC offers a mix of endowment and term plans. Term plans are pure risk covers, while LIC endowment plans combine insurance + savings.
👉 Q4: Are LIC bonuses guaranteed?
No, they depend on the corporation’s profits, but historically LIC has consistently declared bonuses every year.
👉 Q5: Can I transfer my LIC policy online?
No, policy servicing branch changes must be done offline via an application at your LIC home branch.
🏁 Conclusion
Most LIC buyers focus on surface-level benefits like tax savings and maturity returns. But the real power of LIC lies in these hidden gems—like policy loans, revival options, value-adding riders, and wealth creation through bonuses.
If you’re planning long-term, don’t just stop at buying a policy. Explore its full potential. Understanding these hidden advantages will help you maximize your returns and secure your family’s future better.