Insurance Awareness - Life Insurance - LIC
In participating endowment policies, what is the role of bonuses?
In participating endowment policies, what is the role of bonuses?
medium Q14 of 15
Step-by-Step Solution
Step 1: Understand bonuses in participating policies
Participating endowment policies declare bonuses which add to the sum assured, increasing the maturity or death benefit.Final Answer:
Bonuses are additional amounts declared by the insurer that increase the maturity or death benefit → Option CQuick Check:
Bonuses are additional amounts declared by the insurer that increase the maturity or death benefit correctly explains the purpose of bonuses in endowment policies.
Quick Trick: Bonuses enhance benefits; they do not reduce premiums or act as penalties.
Common Mistakes:
MISTAKES- Confusing bonuses with survival benefits or penalties.
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