Insurance glossary
Terminal Bonus
Terminal bonus is a non-guaranteed benefit that may be paid at a late policy stage, on maturity, death, or surrender depending on product terms. It is often one of the most timing-sensitive parts of an illustration.
This page summarizes public information for research and comparison. It is not personalized financial advice.
What the term means
Terminal bonus is a bonus that tends to accumulate toward later policy years instead of being fully reflected earlier in the contract. Some product illustrations rely on terminal bonus to lift the long-term projected outcome.
Because the benefit is both non-guaranteed and timing-dependent, it should be handled carefully in any product comparison.
Why timing matters
A plan can look compelling at maturity because terminal bonus becomes meaningful only after many years. That does not necessarily help a buyer who may need flexibility or a shorter holding period.
Always compare surrender value and total cash value across several policy years, not just the final illustration point.
Terminal bonus FAQ
Is terminal bonus guaranteed once a policy is issued?
No. It is usually non-guaranteed and remains subject to future declaration and product terms.
Why do some products show very strong maturity value?
One reason can be that a large share of the projected value comes from terminal bonus in late policy years.
How should buyers compare terminal bonus products?
By reviewing early and mid-term surrender values, guarantee levels, and how much of the late projection depends on non-guaranteed terminal bonus.
Sources and methodology
Definitions and comparison frameworks reference the Hong Kong Insurance Authority and public insurer disclosures. Check the latest official documents before making a decision.