What are the guaranteed Savings/bonus applicable under a Life Insurance Policy?
Some insurance policies guarantee the amount of money that you would receive upon maturity or the minimum amount that you would receive upon maturity.
Usually, this amount is a proportion of the sum assured such as a bonus or a guaranteed addition of say Rs 70 per Rs 1,000 of the sum assured. This means if you have an insurance policy for a sum assured of Rs 100,000 then you earn a bonus of Rs 7,000 each year on the sum assured.
Other policies may offer you a guaranteed bonus as a percentage such as a guaranteed addition of 3.5% per annum on a compounded basis. This means you earn Rs 3,500 on a sum assured of Rs 100,000 in the first year while in the second year you earn Rs 3,623 (3.5% of Rs 103,500).
Source: SBI Life Insurance