The benefits of sum insured is increased by certain percentage on every renewal of the Policy up to a maximum limit. The benefit is lost if the Policy is not renewed within a specified time period. This type of benefit is available in individual personal accident Policy.
Insurance Encyclopedia
Bonus declaration
Declaration by a life insurer as to the rate at which bonuses will be allotted to ‘with profits’ policies. The periodic declarations are usually annual and the amount declared depends on the insurer’s decision as to the amount they wish to take from profit as divisible surplus. See NO CLAIM BONUS.
Bonus Hunger
The reluctance of policyholders under an No Claim Discount system to notify claims or claim amount when faced with a potential increase in premiums.
Bonus loading
The amount added to a life insurance premium to distinguish ‘with profits’ policies from those without profits. The higher payment entitles the policyholder to participate in any divisible surplus available for bonus distribution at any bonus valuation.
Bonus payment
Additional dollar amount paid by Medicare for services provided by physicians in health professional shortage areas (HPSAs).
Bonus reserve
A reserve created by life insurers for the payment of future bonuses to with profits policyholders.
Bonus reserve valuation
A type of gross premium valuation that allows explicitly for future bonuses under with profits contracts. The terms bonus reserve valuation and gross premium valuation are regarded as alternative phrases. For some purposes (certain solvency investigations) a gross premium technique will be used with no allowance for future bonuses.
Bonus sacrifice
The sacrifice by an employee of all or part of his bonus payment. His employer pays an equivalent amount into an executive pension plan for the employee.
Bonus-malus system
A motor insurance system that gives discounts for claimsfree driving and makes surcharges for claims. See NO CLAIMS BONUS.
Bonus/Malus clause
For the claim-free period there is a discount allowed, called ‘bonus’ applied on the renewal premium. Whenever the insured lodges a claim in his Policy, the renewal premium for his Policy is to be loaded by a fixed percentage which loading is called ‘malus.’