Bonus Rate of Life Insurance Companies in Nepal [FY 2079/80]

The bonus rate in life insurance refers to the additional money added to a policyholder’s sum assured or policy value in participating (with-profits) life insurance policies. These bonuses are essentially a share of the profits made by the insurance company. There are several types of bonuses, with the most common being the reversionary bonus, which is declared annually and becomes part of the guaranteed benefits payable at maturity or upon the policyholder’s death. Other types include terminal bonuses, which are added at the policy’s end, and cash bonuses, paid out annually as cash instead of being added to the policy value.

The calculation of bonuses depends on factors such as the insurance company’s investment returns, mortality experience (the difference between expected and actual claims), and operational expenses. Bonuses are typically declared annually after the company assesses its profits. Once declared, these bonuses are distributed to eligible policyholders, enhancing the overall value and returns of their life insurance policies. This process not only increases the policy’s financial benefits but also builds trust and transparency between the insurance company and its policyholders.

The link below presents the bonus rate announced by the life insurance companies in Nepal from the fiscal year 2079/80 (so far).