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1 An extra payment made to employees by management, usually as a reward for good work, to compensate for something (e.g. dangerous work), or to share out the profits of a good year's trading.

2 An extra amount of money additional to the proceeds, which is distributed to a policyholder by an insurer who has made a profit on the investment of a life-assurance fund. Only holders of with-profits policies are entitled to a share in these profits and the payment of this bonus is conditional on the life assurer having surplus funds after claims, costs, and expenses have been paid in a particular year.

3 Any extra or unexpected payment. See also no-claim bonus; reversionary bonus; terminal bonus.

Subjects: Financial Institutions and Services.

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