"Bonus" Definition

Bonus - An amount added to a basic figure. For instance bonus is added each year to a with-profit life insurance policy, thus increasing the amount ultimately payable when a claim arises. See also: Dividend

Money 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.

Bonus : an amount added to a basic figure. for instance bonus is added each year to a with-profit life insurance policy, thus increasing the amount ultimately payable when a claim arises. see also: dividend

money 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.

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