The amount paid out by the insurer under a 30-year life insurance policy exceeded the sum insured plus revisionary bonuses. The excess is likely to result from?

A. Charges refunded

B. A frequency loading

C. A tax rebate

D. A terminal bonus

Answer: Option D

Solution(By Examveda Team)

The amount paid out by the insurer under a 30-year life insurance policy exceeded the sum insured plus revisionary bonuses. The excess is likely to result a terminal bonus. Terminal Bonus is also known as persistency bonus which is paid once, i.e. at the time of maturity of the policy. It is a sort of loyalty bonus given to a policyholder for maintaining the policy till maturity. Its value is not guaranteed and will be disclosed only at the time of policy maturity.