The interest rate on LIC policies is not a fixed rate applicable to all policies. The returns and benefits of LIC policies are dependent on the type of policy you choose. LIC offers various types of policies, including traditional endowment plans, term insurance plans, money-back plans, unit-linked insurance plans (ULIPs), and more. Each type of policy may have different features and investment components, which can affect the returns.

Here are some key points to understand about the interest rates or returns in different LIC policies:

  1. Traditional Endowment Plans: These policies offer a guaranteed maturity amount along with bonuses. The interest rate or returns in these plans are not explicitly mentioned, as they depend on LIC's performance and the applicable bonus rates for each policy year.
  2. Unit-Linked Insurance Plans (ULIPs): ULIPs provide market-linked returns based on the performance of the underlying funds chosen by the policyholder. The returns are not fixed and are subject to market fluctuations.
  3. Term Insurance Plans: Term insurance policies do not provide any maturity benefits or returns. They offer pure life cover for a specific term, and if the insured passes away during the policy term, the death benefit is paid to the nominee.
  4. Money-Back Plans: Money-back plans provide periodic payouts during the policy term along with a maturity benefit. The returns in these plans are a combination of guaranteed and bonus amounts, but the exact interest rate may not be explicitly mentioned.

It's essential to read the policy documents and understand the specific features and benefits of the LIC policy you are interested in. For traditional plans, LIC typically declares the bonus rates annually based on its financial performance. For ULIPs, the returns are market-linked, and the policyholder has the flexibility to choose the investment funds based on their risk appetite.

If you are considering an LIC policy, it is recommended to contact an LIC agent or visit the official LIC website for the most up-to-date information on the specific policy and its returns. Keep in mind that past performance is not indicative of future returns, especially in the case of market-linked investment products like ULIPs.

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