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Does my Term Insurance provide Survival Benefits?

Defining Survival Benefit in Term Life Insurance - IIFL Insurance

Term life covers are known to be one of the most affordable life insurance plans. These plans are available at lower costs for younger consumers. As you grow older, the premium rates at which you can buy the plan also start to increase.

Thus, it is best to buy it earlier in life. If you seek a simple, utilitarian life cover to act as a financial security blanket for your family, this may be the right plan for you.

Before you get one, it is best to know all you can about life insurance, so you may know what to expect from the plan. One of the key aspects of your plan to be aware of is the ‘survival benefit’. Let’s understand survival benefit, how it helps, and do term insurance plans offer the same.

Features Of Term Insurance

Before we dive into survival benefits, it is necessary to answer the question – ‘what is a term plan?’

Suppose you are a working individual with family members that depend on you for their financial needs or will do so in the near future. It is quite likely that you would want to stay prepared to be able to fulfil all their needs.

However, we may have to face the unexpected realities of life without warning. In case you are not in the world tomorrow, having term life insurance means that your loved ones will have financial support.

A term plan is what helps you prepare for an uncertain future. You can choose a suitable plan with your desired sum assured and duration, name a nominee, and pay your premiums. If the need ever arises, your nominee can make a death claim, and expect a death benefit from your insurance provider.

Survival Benefit In Term Insurance

But what happens if the person insured survives the term insurance duration? What can you expect when the policy matures?

Traditionally, level term plans did not offer any benefits if the person insured survived the policy duration. Once the policy reached maturity, it simply expired, and you could not expect to earn any benefits from the same.

For some consumers, the lack of maturity benefits may act as a deterring factor when considering buying one of these policies. However, the lack of survival benefits is not the truth for all policies anymore. If you seek to reap some form of benefits towards the end of your term insurance duration, you now have the option.

To get a policy with survival benefits, ‘moneyback term plans’ or ‘term plan with return of premium’ are the options you can opt for. If the person insured survives the policy maturity, these plans offer a survival benefit in the form of return of premium. Thus, you can expect to receive the entire premium amount you have paid into the plan as a survival benefit.

Policy Benefits

Apart from the additional survival benefits that you can expect at maturity, these plans function similar to level term plans. You can check online term plan options to know which plans offer benefits at maturity and compare your options.

Some of the plan advantages include:

  • Death Benefit: Upon the passing of the person insured during the policy duration, the nominee can make claims for the death benefit.
  • Tax Benefits: As with most life insurance policies, offline as well as online term plans can earn you tax exemptions.
  • Riders & Benefits: Most variants of term insurance will offer a host of riders that you can choose from, to add to your plan. Benefits are built into your plan. Both these will vary from one insurer to another.

Should You Get A Term Plan With Survival Benefits?

A term plan with a survival benefit is ideal for anyone who expects a little more from their life insurance, without having to spend significantly more. There are some other forms of life insurance that offer more returns from your life cover, but they also tend to be more expensive.

Term insurance with survival benefits may be a tad bit more expensive than level term plans, but they may still be much more affordable than the other variants.

Survival benefits in term insurance help you get a little more from your plan, all the while keeping the security net for your family in place.