What amount will Bob receive when his with profit endowment policy matures?

When a with-profit endowment policy matures, the policyholder is entitled to receive a combination of benefits that reflect both the guaranteed elements of the policy as well as any additional earnings generated from the insurer's investment performance.

The guaranteed sum assured represents the minimum amount that will be paid upon maturity, providing a security that the policyholder can rely upon. In addition to this guaranteed amount, reversionary bonuses, which are declared by the insurer as a share of the profits, are also added to the total payout. These bonuses accumulate over the duration of the policy and enhance the overall maturity value.

Moreover, a with-profit endowment policy may also include a terminal bonus. This bonus is an additional payment that is usually declared at the time of maturity and is based on the company’s overall performance, market conditions, and profits. It is designed to reward policyholders with an extra amount at maturity, assuming the insurer has performed well over the term of the policy.

Thus, the total amount Bob will receive when his with-profit endowment policy matures consists of the guaranteed sum assured, any reversionary bonuses that have accumulated, and potential terminal bonuses, making this combination the most comprehensive and beneficial for the policyholder.