Participation in bonus declaration for with profits policies.
Relates to insurance policies that combine investment with protection. This type of policy is entitled to a share of the profits made by the insurance company. Premiums are invested in the with profit fund, reversionary bonuses are applied usually on an annual basis which reflect the investment growth of the fund assets. On death and/or maturity a further terminal bonus might be applied to the fund value.
A class of policy which participates in the distribution of surplus in the form of bonuses. Such policies are termed ‘with profits'.
this type of insurance does not involve any kind of investment and will simply pay out the sum insured.
(Of life insurance policies) Entitled to a share of the insurance company's profit. Each year a bonus is added to the guaranteed sum insured to reflect the company's profit. Usual practice is to 'smooth' such bonuses so that a comparatively unsuccessful year will not necessarily lead to a lower bonus but a succession of poor years will be reflected by a gradual reduction of bonus rate (and conversely for a series of successful years).
Relates to insurance policies that combine investment with protection. This type of policy is entitled to a share of the profits made by the insurance company. The profits are in most cases added to your insurance policy as an annual bonus, when added they cannot be taken away. In practice With Profits are used to smooth out the fluctuations in the stockmarket; the company retains some of the profits made in the good years to supplement the years in which returns are bad. See also Unitised With Profits Fund and Terminal Bonus.
A type of life insurance policy, which gives you a share of the profits of a life fund, as well as giving you life insurance cover. Premiums are higher than for a straightforward life insurance policy.