Know in detail about insurance policy bonus
Bonus calculation formula and best bonus insurance companies list: The premium paid for the insurance are aggregated in the insurance companies for years. The insurance company uses this amount to pay out the claims. This amount is usually invested in secured government debts and some amount in equity too. The company gets income and profit through these investments and give it back to its policyholders in form of bonus.
Initially, the bonus was given with traditional plans but now there are many new life insurance products on which bonus is given. Most of the insurance companies use the bonus to lure new customers. Hence it is necessary to compare the bonus at the time of buying a policy. To do that it is first necessary to know how insurance companies give different kinds of bonuses.
Types of Bonus:
Simple Reversionary bonus
This is the initial type of bonus that is given with all traditional plans. The evaluation of this bonus is done on the basis of insured amount. This is announced every year. This is given after the end of the policy.
Compound Reversionary bonus
Evaluation of this bonus is done on the basis of some percentage of insured amount. But at the time of evaluation, last year bonus is also added.
This is not necessary that all insurance companies will give the terminal bonus. This depends on the company. This bonus is given at the time of maturity or sudden death. If a person remains in the policy for a determined time then the bonus is given to the policyholder in between also.
This bonus is usually announced by an insurance company in between the year. This is given between the two declared dates either on the maturity of policy or on the death of the individual.
This is the only type of bonus that is given yearly to the policyholder. The claim is given at the end of the year in cash.
You should also keep in mind the following:
When choosing a plan, always check the bonus rates given by the company. On checking the bonus rates you can be sure of the benefits you will get on the insurance policy. You can check the bonus rates on company’s site also.
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