Guide To Earn Loyalty Rewards On Term Insurance
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Term insurance is one such scheme that most policyholders generally choose over other types of life insurance. This is primarily due to competitive premium rates, fixed periods of security, flexibility in options and other reasons. However, it can be seen that policyholders still opt out of term insurance halfway due to various reasons, such as having a cheaper term cover from another insurance provider or even engaging in a particular type of life insurance. In such situations, the opted-out person does not profit from the amount of the premium invested, since there is no savings aspect of the term insurance.
Even so, along with the policyholder's cost, the loss to the insurance provider has since been diminished as a source of revenue. That is why insurance providers offer benefits in the form of a loyalty benefit scheme such that the insured can continue and fulfil the full term of the insurance.
What Are The Loyalty Rewards In Life Insurance?
Loyalty Rewards are like bonuses which are added to your life insurance corpus by the insurance company to reward you for your long-term commitment in the life insurance plan. The form of loyalty rewards vary as per the type of life insurance plan chosen by you. For instance, in case of ULIP, loyalty rewards are generally given in the form of additional units of your fund value, whereas in case of a term insurance plan a certain percentage of the sum assured is added to your death/maturity benefit on regular intervals.
Loyalty Rewards Under Different Types of Life Insurance Plans
1. Term Insurance
Insurance Companies give loyalty rewards as a percentage of the sum assured annually to the policyholder after the completion of a certain number of policy years.
2. ULIPs/Savings Plans
Loyalty rewards are common in unit-linked insurance policies (ULIPs) which are implemented in two ways – as a percentage of the value of the investment or as a percentage of the premium. The value of the loyalty rewards depends on different factors, such as the amount of the bonus, the policy term, the term of delivery of the premium and the duration.
3. Endowment Plans
The insurance provider rewards you for saving by providing additional loyalty additions to your maturity amount.
4. Retirement Plans
Some insurance companies give their policyholders who have been saving for longer periods of time and committed to them extra unit allocations of the corpus through loyalty rewards and wealth boosters.
5. Child Plans
Child Plans provide the benefits of staying invested in the plan by offering loyalty rewards in the form of a percentage of the accumulated funds by the name of Asset Boosters to improve your savings.
Take Away
It must be well acknowledged that loyalty incentives make life insurance plans attractive enough for the policyholders to remain in the scheme for a longer period. It makes the current policy attractive. So it is important that we go through the loyalty rewards provided by different insurance companies so that we receive the best rewards for our loyalty.
