What is Reversionary Bonus in Life Insurance?
Reversionary Bonus means:
·
Life insurance company will declare
bonus every year for the Traditional and Endowment policies
·
It based upon company
profit by that particular type of products
·
And reversionary bonus will increase
gradually for every year
Firstly, a Bonus is an
annual payment from the Company’s
Participating Life Fund given to
Participating policies.
A participating policy shares in the profits of the
Participating Life Fund.
Most saving (endowment) plan gives bonus, but you
much check whether it is Cash
Bonus or Revisionary Bonus.
The
following FAQs are from Great Eastern website:
1. Can I withdraw the
Reversionary Bonus in my policy?
We do not encourage you to withdraw the Reversionary
Bonus as you will not get the full bonus. We will pay only the surrender
value of the Bonus. If you have short term financial needs, we
recommend you to apply for a policy loan instead.
2. Is the Annual
Reversionary Bonus the same as Cash Benefits (Cash Bonus/Survival Benefits)
that I receive at regular interval?
No, this Annual Reversionary Bonus is not
the same as Cash Benefits.
3. What is the
relationship between the Company’s profits and my policy bonus?
Bonuses are declared
only from Life Insurance operations – PAR Fund. Therefore, while
the Company's results reflect the overall financial performance of the whole
company, the amount of bonus declared for the year depends
on the investment performance, actual and projected, of PAR Fund.
In short, a plan that gives Cash Bonus
is better than a plan that gives Revisionary Bonus because YOU
·
have control
over it
·
can decide
how to spend it or reinvest with it
·
can withdraw
it