Not all life plans are eligible for bonus. It is a onetime bonus that the insurer declares for policyholders who keep policy till maturity. In most traditional life policies, bonus amount keeps getting added to the policy and keeps accumulating till the policy's maturity. Plans can either be participatory, thereby qualifying for bonus, or non-participatory, that do not qualify for bonus.3. When a life insurance company makes a profit, it is supposed to distribute a part of that profit to its policyholders, in the form of bonus payments.2.

Source: Economic Times June 13, 2016 02:07 UTC