If the creditor dies before the end of the policy, then the bonus benefit is given to the nominee by adding it according to the premium. The amount of bonus depends on how much premium you have paid and for the period for which the premium has been paid.
You can earn cash from your life insurance policy . This facility is provided on the premium of the policy. This earning is given in the form of bonus. Some part of the premium that the insured pays for his policy is given in the form of cash. Cash bonus is calculated on the basis of annual premium and given to the customers. Insurance companies offer three types of bonuses to their customers which include Compound Reversionary Bonus, Cash Bonus and Interim Bonus. We are talking about cash bonus here.
Earning from insurance premium
In cash bonus, customers get a chance to earn on premium. This bonus is given to the policyholder on an annual basis. It is calculated on the basis of percentage of annual premium. For example, if someone has taken insurance of 2 lakh sum assured, then he will get a cash bonus at the rate of 4%. If his annual premium is Rs 12,000, then 4% of 12,000 i.e. Rs 480 will be available as cash bonus. Accordingly , every year Rs 480 will be accumulated in the account of the
When do you get the bonus
Similarly, some customers are also given the benefit of interim bonus. The benefit of interim bonus is given between two bonuses. Suppose a policyholder is to get bonus money in 2024 and 2028. So the policyholder can be given bonus anytime between these two years. Bonus is always declared at the end of the financial year. But if the policyholder dies before this announcement or the policy matures, then interim bonus is given in that case
Also know how insurance companies provide bonus money. A major part of the amount we pay for insurance is invested in equities and shares secured by the government. The profit earned on these investments is distributed among the policyholders as bonus. This bonus money is given to the customers from time to time. If the creditor dies before the end of the policy, then the bonus benefit is given to the nominee by adding it according to the premium. The amount of bonus depends on how much premium you have paid and for the period for which the premium has been paid.
