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BonusMoney paid by life insurance companies to policyholders based on endowment policies and with-profit bonds.The amount of the bonus is calculated by actuaries and the criteria they use are:how well the insurance company's investments have donehow well they think they are going to do in the futurethe insurer's overall financial strengthReversionary bonuses are normally paid annually and could typically be in the region of 2% to 5%. Terminal bonuses (payable at maturity or prior death) tend to vary much more but could vary from say 10% to 100% at maturity depending on the term of the policy, for example ten and twenty five year terms.The bonus is declared each year and at the end of the policy's life. As a policyholder you have no way of knowing what the bonus is going to be until it is declared, and no real way of knowing how it has been calculated and whether it is fair, so the whole process can be a bit frustrating.Similar MatchesBon voyage bonusBon voyage bonusSee: Greenmail. Reversionary bonusReversionary bonusA bonus added to the sum assured (or basic sum assured) of a with profits life assurance policy out of a life company's surplus profits usually on an annual basis. These bonuses are payable at the end of the term of the policy (that is, at maturity), or on prior death of the life assured. Once allocated, their values are guaranteed provided premiums are paid up to maturity or death.The values of such bonuses are usually related to the sum assured and can be either simple reversionary bonuses (related to the sum assured only) or compound reversionary bonuses (related to the sum assured plus bonuses to date). Reversionary bonuses may sometimes be taken in cash at the time they are declared but the values will be significantly lower compared with leaving them until maturity. Special bonusSpecial bonusAn additional bonus (that is, over and above the normal reversionary bonus) applied to a with profits life assurance policy when the life company's profits are exceptional. Terminal bonusTerminal bonusAn additional bonus paid to reflect the overall performance of a with profits life assurance policy at maturity or prior death of the life assured. See 'reversionary bonus'. Terminal bonusTerminal bonusThis is a bonus paid at the end of an endowment mortgage and often depends of the performance of the investment fund you are using to repay your mortgage. Further Suggestionsno claim bonussimple reversionary bonus interim bonus Stock bonus plan Annual bonus bonus issue Loyalty bonus children's bonus bond Bonuses Revisionary bonus annual bonus No Bonus Clause compound reversionary bonus |
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