Earn Bonus in Life Insurance Policies
A bonus is usually referred to an extra amount of money or reward one receives in addition to the base amount. The same concept goes with bonuses payable to the policyholders in a life insurance policy as an amount accumulated on a yearly basis and payable on the life assured death, surrender, or maturity of the plan. Hence, this bonus amount is payable over and above the benefits applicable under a life insurance policy. How is Life Insurance Bonus generated? A huge portion of the premium paid by the policyholders is invested in government-secured debt and some in equity. The insurer’s claim experience, returns on investment, and actuarial factors together are responsible for profit. The insurers distribute the profits to the participating policyholders based on the earnings received as a return on these investments. Any excess of assets after the valuation of the company’s assets and liabilities, may also generate an extra amount to be distributed as a bonus. Types of bonuses: ...