Persistency bonus
An insurance contract gives policyholders a persistency bonus paid at maturity in cash (or as a period-certain maturity).
The embedded derivative (the option to receive the persistency bonus) is not an insurance contract because, as discussed at 3.7 above, insurance risk does not include lapse or persistency risk. Therefore, measurement of the option at its fair value is required. [IFRS 4.IG4 E2.17].
If the persistency bonus was paid at maturity as an enhanced life-contingent annuity then the embedded derivative would be an insurance contract and separate accounting would not be required.