Asymmetrica Glossary

Simple Reversionary Bonus

Also called: SRB, reversionary bonus

An annual bonus declared on the Sum Assured of a participating policy — credited yearly, paid on death or maturity.

Simple Reversionary Bonus is the standard form of bonus on Indian participating endowment policies. It's expressed in rupees per ₹1,000 of Sum Assured, declared each year by the insurer based on its actuarial valuation of the par fund.

'Simple' means the bonus is calculated only on the original Sum Assured — it does not compound on previously vested bonuses. This is a critical distinction: a 4.7% headline rate is not 4.7% compounded on your fund, it's 4.7% of the SA each year, which is a flatter cash flow than a CAGR.

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