Mainly there are 3 types of bonuses:-

  1. Reversionary bonus – The reversionary bonus is a bonus added to the value of Life Insurance policy. The profits made by the company are allocated to each with-profit policy at the end of the year. It gets accrued during the policy tenure & is paid in addition to the specified Sum Insured (life cover) at the time of claim of maturity.
  2. Interim bonus – Generally, bonuses are calculated at the end of the year. However, in cases where the policy matures or death occurs during the interim period of two successive bonus declaration dates, then bonus is calculated for the period from last bonus payment date. This is called Interim bonus.
  3. Terminal bonus – The terminal bonus is like a loyalty bonus paid only once, that is at the time of maturity, as an appreciation for maintaining the policy in-force till maturity. It’s also known as Persistency OR Cash Bonus, the value of which is not guaranteed and is disclosed only on the time of maturity.