Life Insurance Plan (Photo Credit: Social Media)
Chandigarh:
Do you earn a bonus on your savings plans? Did you know that with proper financial planning, one can earn bonuses that are applicable to savings policies and life insurance policies? Interesting, isn't it? So first, let us know what is a bonus. Bonus is defined as the extra sum of money which is paid in addition to the minimum amount of the cash promised. The concept of bonus is simplified, so one should not confuse it with the concepts of other financial instruments. So let us discuss the bonus on life insurance without any further delay.
When Will I Get Paid With My Bonus?
The day you start investing your money in a saving policy, the bonus accumulates. Once the life insurance plan is matured, one can get a cash payout bonus in life insurance. In case of certain specific cases, such as the death of the primary investor, the nominee according to the official documents, will be paid with a bonus amount. One should note that if the policy is surrendered before the maturation, then no bonus will be paid. Various Types of Life Insurance Bonuses - There are many savings plans, such as Tata AIA insurance, that can pay their investors a bonus on life insurance. Now let us discuss the concept of types of life insurance bonuses in detail.
Simple Reversionary Bonus -
A simple reversionary bonus is calculated on the sum of the premiums and is declared annually by the insurance company. When the investor files a policy claim, the sum is paid by the company at the end of the policy term.
Compound Reversionary Bonus -
A compound reversionary bonus is calculated by including the declared percentage on the assured sum and is combined with the previously acquired bonuses. When you start paying by premiums, the bonus of every year combines the bonuses of further years.
Cash Bonus -
The cash bonus in life insurance is paid annually by the company to the investors. At the end of each year, the policyholder will get paid as per their bonus earnings.
Terminal Bonus -
A terminal type of bonus is a one-time bonus which is added once the policy is matured or is claimed by the investors. It is paid once the policies have fulfilled their policy term without any hindrance.
Interim Bonus -
In certain specific cases, when a particular policy is deferred due to a claim of the policy or maturity, the insurance will pay the interim bonus to the investors. The interim bonus ensures that the policyholders or their nominees will not get deprived of the extra payouts once the policy matures.
Is The Bonus Amount Applicable to All Types of Life Insurance?
The bonus in a life insurance policy is only offered on the traditional plans that come under the category of with profit. For example, plans such as endowment plans, money back and whole life insurance plans can offer you bonuses. Policies that are non-profit in nature will not be able to provide a bonus amount as per the norms.
Conclusion -
The day you start investing is the day you start earning. Experts believe that bonuses are an excellent way to make profits from your life insurance. So what are you waiting for? Choose a life insurance plan and start earning bonuses through your saving plan today!
