24 Hour Loans glossary of financial terms

Annual Bonus

You'll normally be given an annual bonus with investment products such as with profits investment accounts like endowment policies and some bonds, for example. This kind of annual bonus is paid once a year and is based on how well the investment has gone. You may find that some companies alternatively call an annual bonus a reversionary bonus.

One advantage to an annual bonus - unlike the profits you see with other investment products - is that it is absolute. So, once you?ve been given an annual bonus it can?t be taken away while you maintain your policy whereas other financial product values can continue to rise and fall with stock market changes. So, your annual bonus will be added to your investment until it matures or is paid out. The actual bonus you receive ( if any ) will be directly linked to how your policy provider has managed their investments.