Paragraph match score 80.7%
Page A-371
Types of Bonuses in Life Insurance Policy
Compound Reversionary Bonus: Compounded every year, raises the bonus amount and base sum assured year by year.
Page A-551
How are Bonuses Calculated Under Life Insurance?
Compound Reversionary Bonuses: These bonuses are calculated as per the percentage of your total sum insured along with the previous accumulated bonuses, hence the word compound. Taking our previous example, in the first year of policy tenure, you will receive ₹10,000, which is 2% of ₹5,00,000. In the next year, assuming the standard rate remains at 2%, you will receive ₹10,200, which is 2% of ₹5,10,000 and so on, creating a compounding effect.