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On a participating policy, part of what you receive is guaranteed by the contract and part depends on how the insurer's participating fund performs. Bonuses are that second part. Some become guaranteed once they are added to your policy; others are paid only at the end, and only if the insurer declares them.
Last reviewed 15 October 2026
Insurers name them differently. The plan's bonus section says which yours has.
| Bonus | How it works | Guaranteed? | On surrender |
|---|---|---|---|
| Reversionary (annual) bonus | Declared each year and added to the policy, payable at maturity or on a claim | Once added, yes | Paid at its cash value, which is lower before maturity |
| Terminal, special or maturity bonus | A one-off amount paid at the end of the policy or on a claim | No, until it is paid | Often reduced or nil |
| Cash bonus | Paid out each year, or left with the insurer to earn interest | No | Amounts left with the insurer are usually paid out |
Your benefit illustration shows projected values at two rates of return. The Life Insurance Association's 2021 release on the current caps is clear about what they are:
“These rates will not affect the actual returns of existing and future Par policies.”
“Eventual actual returns received by policyholders may be higher or lower than those reflected within the PI.”
Par: participating. PI: policy illustration. How to read a benefit illustration
Ending a policy early often gives up some or all of a bonus paid only at the end. Ask your insurer what it would pay today.
Guaranteed values and bonuses already added count in full. Future bonuses are projected cautiously. How we value a policy
When an insurer lowers its bonus rates, projected maturity values fall, and so does what a buyer can pay.
A reversionary bonus becomes guaranteed once it is added. Future bonuses and terminal bonuses are not guaranteed until paid.
It can lower future bonus rates. It can't take back reversionary bonuses already added to your policy.
On your annual policy statement or the insurer's bonus letter, which shows bonuses added to date.
One that shares in the profits of the insurer's participating fund, through bonuses. Participating vs non-participating
LIA media release, 2 June 2021: life insurance industry revising caps on participating policy illustrations (checked 15 October 2026)
If we would buy your policy, our offer sits beside your net surrender value. No NRIC, no obligation.