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Bonus of Insurance Plans

 

 
1 When a life insurance company makes a profit, it is supposed to distribute a part of that profit to its policyholders, in the form of bonus payments.

2 Not all life plans are eligible for bonus. Plans can either be participatory, thereby qualifying for bonus, or non-participatory, that do not qualify for bonus.

3 Bonus is different from guaranteed addition (GA). Bonus depends on the insurer's profit while GA is an assured addition to the policy and is disclosed upfront.

4 Bonus depends on quantum of investment gains of the `with profit' fund either as a certain amount per `1,000 sum assured or as a percentage of the sum assured.

5 In most traditional life policies, bonus amount keeps getting added to the policy and keeps accumulating till the policy's maturity. This is `reversionary' bonus.

6 Terminal bonus is added on maturity of policy or on death. It is a onetime bonus that the insurer declares for policy holders who keep policy till maturity.

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9. Religare Tax Plan

10. Birla Sun Life Tax Plan

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