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NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Life Insurance Products

In a traditional participating endowment plan issued by an Indian life insurer, what do policyholders receive in addition to the guaranteed sum assured?

Policyholders of a participating endowment plan receive bonuses declared from the surplus of the insurer's participating fund, on top of the guaranteed sum assured. The bonuses depend on the fund's experience and are not guaranteed in advance.

  1. ABonuses declared out of the surplus of the participating fundCorrect
  2. BInterest fixed by SEBI every quarter
  3. CA refund of all premiums paid in addition to the maturity benefit
  4. DUnits linked to the performance of an equity index

Explanation

Participating policies share in the surplus of the participating fund through bonuses such as reversionary and terminal bonus. These are not guaranteed in advance. Index-linked units belong to unit-linked products, and a premium refund is not a standard feature of endowment plans.

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