Six must know facts about bonus in insurance plans
- Any life insurance company is supposed to give out a part of the profit that it makes to its policyholders in the form of bonus.
- All life insurance plans are not eligible for bonus. A plan is eligible for bonus if an only of it is participatory.
- Bonus and guaranteed addition (GA) are different. Bonus is variable while GA is a fixed amount.
- Bonus depends on quantum of investment gains.
- Reversionary bonus is an amount that keeps adding to the policy till the policy’s maturity.
- Terminal bonus is a onetime bonus that is added on maturity of policy or on death.