What are ‘with profit’ and ‘without profit’ life insurance plans?
Life insurance companies from time to time declare bonus on their plans
What are ‘with profit’ and ‘without profit’ life insurance plans?
Pooja Mehra, Noida
Life insurance companies from time to time declare bonus (profit share) on their plans. An insurance plan in which this bonus/profit share is passed on to the policyholders is called a ‘with profit’ plan. But in a ‘without profit’ plan this bonus is not passed on to the policyholders. Therefore, the premium rate charged for a ‘with profit’ plan is higher than that for a ‘without profit’ plan. The percentage of bonus may vary from one policyholder to another depending on the type, term and the premium of the respective policy, among other considerations.