Identify the correct statement

A. Bonus is not allowed on surrender of a policy

B. In compound reversionary bonus it is a percentage of basic benefit and already attached bonus

C. Terminal bonus and compound bonus are one and the same

D. Persistence bonus is allowed by the insurer at its discretion in certain cases

Answer: Option B

Solution(By Examveda Team)

In compound reversionary bonus it is a percentage of basic benefit and already attached bonus. Compound reversionary bonuses are a percentage rate, which apply to the sum assured in respect of the basic policy benefit, and to the reversionary bonuses already attached to the policy. The difference is in the way the bonuses are accrued.