BSP Life announces $17.2m for the 2015 Bonus Allocation

Date: 23/04/2016

Making the announcement today at a press conference, BSP Life Managing Director, Mr Malakai Naiyaga said the total Bonus allocation declared for 2015 was valued at $17.2m. In addition to the sum insured that is taken out on a savings and investment policy, BSP Life adds bonuses to increase the value of the policy when it is paid out either at maturity or in the event of the death of the life insured.

There are two bonuses that are added.

(i) The Reversionary Bonus This is an amount declared each year that is added to all existing savings and investment policies. The declared bonus rate, for example 2%, is calculated on the sum insured plus previously accumulated bonuses. This bonus is calculated on a compounding basis ensuring returns are maximised for customers.

For example, if the sum insured is $100,000 and previous bonuses are $15,000, the 2% Reversionary Bonus is applied to $115,000, to determine the new bonus for the year.

Bonus Calculation 2014 2015
Sum Insured $100,000 $100,000
Accumulated bonuses $ 15,000 $ 17,300
Total sum insured and accumulated bonuses $115,000 $117,300
Multiplied by the bonus rate 2% 2%
New annual bonus $ 2,300 $ 2,346

(ii) The Terminal Bonus This is an additional bonus that is added to the policy in the actual year the policy matures or is paid out. It is based on the number of years a policy has been maintained with BSP Life until the date of the pay-out. The value of the Terminal Bonus allocation for 2015 is approximately $2M which is in addition to the $17.2M allocated under the Reversionary Bonus.

The Terminal bonus will be added to all policies maturing or to be paid out in 2016. Mr Naiyaga stated, "The ability to continue to pay bonuses is a reflection of the strong financial standing of BSP Life specifically, our investment portfolio. We will continue to seek ways to grow our investment portfolio so that we can deliver sustainable returns to our customers."

Benefit Payouts In terms of other customer benefits, BSP Life had earlier announced that customers received $49.1m in benefit pay-outs for 2015 averaging $944,000 a week. These pay-outs enabled thousands of customers to fulfil their life goals including retirement, education, starting a business, paying off debts or taking a well-deserved holiday. BSP Life paid $42.8m for life insurance policies and $6.3m for health insurance.

Benefits Paid to BSP Life Customers in 2015

Life & Health Insurance Pay outs 2015
Maturities & policy withdrawals              $33.3M
  •  Approximately 1000 policies matured.
Death & Disability             $9.5M
  • $7.3m was for 373 death claims.
  • 200 or 54% were aged below 55 yrs.
Medical             $6.3M
  • $3m used for 70 insureds who were evacuated overseas for life threatening conditions.
Total Pay outs $49.1M
Mr Naiyaga noted, "There are times when customers face financial hardships and question whether it is worthwhile retaining their policies. Customers who are able to prioritise their spending and diligently continued their insurance payments are reaping just rewards." He encouraged those who do not have life or medical insurance policies to consider investing in one to ensure financial security for themselves and their loved ones.