Comments
‘Bonus’ in insurance parlance refers to the benefit over and above the cover and the maturity amount. There are broadly three types — reversionary bonus, loyalty bonus and terminal bonus.
Terminal bonus is the benefit offered by insurers when the policy matures in both ULIPs and traditional policies. Loyalty bonus is given to policyholders who stay for a term of 10 or more years. Endowment policies as well as ULIPs offer this bonus.
Reversionary bonus is given only in life policies, where there is an investment-insurance combo. It is declared as a percentage of sum assured.
The amount of bonus, until declared, is not guaranteed. The bonus declaration every year is a decision made by the company’s board based on the amount of profits (surplus) for the year. The bonus is paid along with the sum assured (on death) or with the maturity amount at the end of the policy tenure.
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.