We invest our funds as described in the previous section and receive a return on those investments which can vary from year to year. At the end of March or early April we review the returns achieved during the previous calendar year and declare a bonus rate for each policy type for that period. The rate varies depending upon overall investment returns and is not therefore guaranteed to be paid at the same rate or at all, in future years.
Bonuses are calculated at the appropriate rate based on the sum assured not the amount of premium paid and on encashment after five years subject to the conditions outlined below, you will receive the initial Sum Assured plus bonuses added during the life of the policy.
We also try to ‘smooth’ returns over the life of the policy by retaining some of the investment return in good years to maintain bonus rates in less positive years. However, to ensure members receive their fair share of returns on their policy over its lifetime, there may be an additional terminal bonus paid on maturity. Payment of this type of bonus depends entirely on investment performance and the rate at which annual bonuses have been added and is not guaranteed.