All You Need to Know About Life Insurance Bonus

What Is a Bonus in Life Insurance Policy?

How Is Life Insurance Bonus Generated?

How to Calculate Bonus in Life Insurance Policy?

When Is the Bonus Paid in Life Insurance Policy?

What Are the Types of Bonus in Life Insurance Policy?

What Are the Tips on Selecting Life Insurance with Better Bonus in India?

FAQs about Bonus in Life Insurance

How does a bonus in a life insurance policy work? up-arrow

A percentage of the sum promised, or a specific amount of the sum assured, is used to calculate the bonus.

Who is eligible for a bonus in a life insurance policy? up-arrow

Only ‘with profit’ or ‘participating’ policyholders can get a bonus for a life insurance policy. However, these bonuses usually tend to vary across plans. 

Are the bonuses in a life insurance policy taxable? up-arrow

Any money received upon the maturity of a life insurance policy or money received as a bonus is completely exempt from income tax under Section 10 if the premium paid on the life insurance policy does not cross 10% of the total sum assured for all policies issued post 1 April 2012 and 20% of the sum assured for policies issued before 1 April 2012. (10D).

Who is eligible to get the bonus in a life insurance policy? up-arrow

The bonus is only available to participating (with-profit) policies, and only policyholders with participating life insurance policies will be eligible to receive the bonus payment.