What is a deposit bonus?
Premium deposit is a refunded premium that the insured party is offered at the beginning of the policy period. The bonuses of this type are usually associated with constant insurance plans, especially the coverage of assets and liability. In the event that the insurance company or the insured party decides to terminate the agreement, the balance of the deposit bonus will remain to the client.
The idea of a deposit bonus is to help in the establishment of a type of commercial assets or cover responsibility. The deposit on the front serves as a means to cover the client, although there is no established history that shows an exposure or loss for this client. In this sense, the deposit bonus is determined by assessing the situation of the applicant for the insurance for the insurance and the projection of the estimated annual bonus to the level of the required coverage and then dealing with the actual amount of deposit bonuses. When the conditions of the plan require annual premiums, the deposit of the bonus will be equal to the annual premium determined by projections. If the plan requires a quarterly or poloSummer premium payments, insurance provider identifies the percentage of planned annual bonus, which will serve as a basis for paying deposits.
At the end of the first year, the record of exposure experience and loss is reviewed by the insurer. Depending on the outcome of this review, the annual bonus may remain the same or be adjusted up or down. At the same time, the insured party will have a chance to adjust the level of coverage provided by the assets or a liability plan on the basis of a change in needs or other relevant circumstances. The idea of this opportunity is to correspond more to the scope of coverage to the client's needs, based on the real life experience that occurred during the previous twelve months of coverage.
It is important to realize that if the necessary deposit bonus is covered immediately, these funds are considered to be deposited with the insurer. Ifthe insured party should decide to terminate coverage within the set time frame, the amount of deposit is returned in full. The same applies if the insurance company also decides to terminate coverage within or for purposes that are identified in the conditions found in the insurance contract.