Licentiate Exam - IC 02 Practice of Life Insurance Exam - Important Points
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Bonus is the benefit in addition to sum assured that is distributed to 'with profit' policyholders. Interim bonus is payable under policies where a final payment is payable between two valuation dates.
Under whole life and endowment insurance plans, the insured can choose to receive profits or bonus along with the sum assured. These are known as with profit or participatory policies
Under without profit or non-participatory insurance plans, the insured will not be entitled to profits or bonus which is declared after actuarial valuation
Pure term insurance policies are without profit policies and their premium is lesser as compared to with profit policies.
Profits are payable as bonuses or dividends. Bonuses are normally paid as reversionary bonuses. They are declared as a proportion of the sum assured
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