The correct answer is D. For Non-par policies, returns are disclosed at the beginning of the policy.
A participating policy is a type of life insurance policy in which the policyholder shares in the profits of the insurance company. The amount of the bonus is based on the performance of the insurance company’s investment portfolio. The bonus is usually paid out annually, and it can be used to increase the death benefit, reduce the premium, or purchase additional benefits.
A terminal bonus is a type of bonus that is paid out when a participating policy matures. The amount of the terminal bonus is based on the performance of the insurance company’s investment portfolio over the life of the policy.
A non-participating policy is a type of life insurance policy in which the policyholder does not share in the profits of the insurance company. The premium for a non-participating policy is usually lower than the premium for a participating policy. However, the death benefit for a non-participating policy is also usually lower.
The new guidelines for traditional products state that for participating policies, bonus is linked to performance of the fund. This means that the amount of the bonus will vary depending on the performance of the insurance company’s investment portfolio. The bonus once announced becomes a guarantee. This means that the insurance company is obligated to pay the bonus, even if the performance of the investment portfolio declines. Such a bonus is called Terminal Bonus.
The statement “For Non-par policies, returns are disclosed at the beginning of the policy” is not true. For non-par policies, the returns are not disclosed at the beginning of the policy. The returns for a non-par policy are based on the performance of the insurance company’s investment portfolio. The returns for a non-par policy can vary over time.