The correct answer is: C. Both A & B
Terminal bonuses are a way for insurance companies to reward policyholders for their loyalty and to achieve equity among different generations of policyholders. When an insurance company makes a profit, it can distribute that profit to policyholders in the form of a terminal bonus. This is a way of rewarding policyholders for their continued support and for helping the company to grow. Terminal bonuses can also be used to achieve equity among different generations of policyholders. For example, if a company has been in business for many years, it may have a large number of older policyholders who have paid into the company for many years. These policyholders may have paid more into the company than they have received in benefits. Terminal bonuses can be used to distribute some of the company’s profits to these older policyholders, in order to make sure that they are not left out when the company makes a profit.
Option A is correct because terminal bonuses are a way for insurance companies to reward policyholders for their loyalty. Option B is correct because terminal bonuses can be used to achieve equity among different generations of policyholders. Therefore, the correct answer is C.