Terminal Bonus

Terminal bonus refers to an additional bonus or additional sum of money paid to indicate the overall performance of a with profits life assurance policy during the maturity of the policy or death of the assured prior to the maturity. This additional sum or bonus is paid is only on with profits policies usually during the death of the policy holder or at maturity period. The amount paid depends upon the profits made by the insurance provider. In practice, the additional bonus is paid by the insurance companies, when the policy is claimed on the event of death, maturity, withdrawal, surrender or in case the assured suffers from incurable illness. There are also lots of chances for the assured to withdraw the policy without any prior notice. At times, the terminal bonus is payable on surrender and pension transfers. In simple words, the terminal bonus is the sum added to the policy at the time of its maturity. Though it is earned throughout the policy, it is assigned to the policy only at the end of the contract term.

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