LIC – the country’s largest investor – is wholly owned by Government of India, established under LIC Act 1956 and according to that Government of India had given sovereign guarantee for the Sum assured and Bonus promised, for the policies sold by LIC. This means that if you buy a LIC policy, there is 100% assurance that you will get whatever minimum benefits guaranteed, even if LIC goes bankrupt.
Any LIC policyholder or the nominee will vouch for the best claims settlement from LIC. Perhaps, this is the only institution where you as a policyholder are virtually chased till such time your claim cheque is handed over to you!
LIC is declaring quite an impressive bonus (profits) on all its with-profits policies every year. Extra attraction under LIC Bonus is (a) it is calculated every year on the insured amount and not on the premium paid and (b) entire bonus received along with insured amount either by you on maturity of your policy(ies) or by your nominee in your absence during the currency of your policy(ies) is free from income-tax under section 10(10D) of the Income-tax Act.