Types of Returns

GUARANTEED RETURN - The is the rate of return pre-decided and promised by the company from day of buying, it ranges from 4 to 5 %. The element of guaranteed return in the form of guaranteed additions (GA) in life insurance plans makes them attractive for those who want fixed and assured return on their savings. 

BONUS - When a life insurance company makes profit (surplus), it is supposed to distribute a part of that profit to its policyholders, in the form of bonus payments. The insurer declares the rates of bonus for the every financial year. Bonus is unknown and depends on the insurer's profit while GA is an assured addition to the policy. GA is disclosed to the policyholder upfront while buying the policy. 

Last modified: Tuesday, 5 Mar 2019, 17:13