How profit works on a State Life plan — with a worked example

Where the profit comes from

State Life is a with-profits insurer: policyholders share in its surplus. Under the 1972 nationalisation order, 97.5% of that surplus is distributed to with-profit policyholders — the Corporation keeps 2.5%. For the 2025 valuation that meant PKR 181 billion allocated to policyholders.

The distribution is made as a reversionary bonus: a fixed number of rupees per Rs. 1,000 of sum assured, for each policy year. It is "reversionary" because it reverts to you — it attaches to the policy and is paid with the sum assured at maturity or on death. A declared bonus cannot later be reduced or withdrawn.

The rate steps up the longer you stay

Rates are not flat. For a 20-year-or-longer Endowment, the 2025 declaration pays Rs. 52 per 1,000 in policy years 1–5, Rs. 117 in years 6–16 and Rs. 178 from year 17 onward. In other words the rate more than triples over the life of the plan, which is why long terms earn disproportionately more than short ones.

Platinum Plus, which is paid for only three years, has its own schedule of Rs. 32 rising to Rs. 120 — roughly 50% above a short-term Endowment at each step, as State Life advertises.

• Years 1–5: the entry rate (Rs. 52 per 1,000 on a 20-year Endowment)
• Years 6–16: the plan matures into its main earning phase (Rs. 117)
• Year 17+: the top rate (Rs. 178) — only reached by plans of 17 years or more

A worked example: Rs. 1,000,000 sum assured, 20-year Endowment

The table applies the 2025 rates to each policy year and assumes they are repeated every year — they are set at each annual valuation and may go up or down. Premiums are assumed paid for the full term. Your personalised illustration will show the figures for your age and sum assured.

The terminal bonus on top

Policies that have paid more than ten years of premiums also receive a terminal bonus when a maturity or death claim is paid. For claims in 2026 it is Rs. 90 per 1,000 sum assured for every year the policy has run, capped at Rs. 1,800 per 1,000 — a cap a 20-year plan reaches exactly. On Rs. 1,000,000 that is a further Rs. 1,800,000 at maturity. Anticipated Endowment plans (which pay cash back during the term) are excluded.

When you can get at the money

• At maturity: sum assured plus every declared bonus plus terminal bonus, as one lump sum.
• On death during the term: the same, paid to your nominee — the plan completes for your family.
• Before maturity: after the third premium you can borrow up to 80% of the net surrender value; after two years the policy has a surrender value. Both reduce what is paid at maturity, so most savers leave the profit to compound.

Takaful: the same profit, structured to be halal

Takaful Golden Endowment and Takaful Platinum Plus are bonus-based, unit-linked family Takaful plans. Contributions are pooled with other participants and invested only in Shariah-compliant instruments; declared bonuses are credited through the Participant Takaful Endowment Fund, and there is no riba. The government guarantee applies in the same way.

Questions people ask

Is the profit guaranteed?

Once declared, yes — a declared bonus is added to your policy and guaranteed by the Government of Pakistan. Future bonus rates are not guaranteed; they are set at each annual actuarial valuation and may rise or fall.

Can I withdraw the profit every year?

No. Bonuses accumulate on the policy and are paid with the sum assured at maturity or on death. A policy loan of up to 80% of the net surrender value is available after the third premium if you need money earlier.

Does a bigger sum assured earn a higher rate?

The rate per Rs. 1,000 is the same for everyone on a given plan and term; a larger sum assured simply multiplies it. What changes the rate is the plan, the term and how many years the policy has run.

Is the profit halal?

The Takaful plans are structured as Shariah-compliant family Takaful with no riba, under State Life’s Shariah advisor. Conventional plans participate in the general with-profits fund.