What are the Differences Between Survival Benefit and Maturity Benefit?

life insurance benefits for family

When selecting an insurance plan, you come across terms like survival benefit and maturity benefit. Both these are pay-outs of life insurance plans that a policyholder gets if they survive. Still, there are some key differences between survival benefit and maturity benefit. Individuals should know how they are distinct from each other before purchasing a policy.

What Is the Maturity Benefit?

Maturity benefit is an amount that an insurance company is liable to pay when the policy term ends, or in other words, the policy matures. It is a lump sum amount that includes the pre-determined sum assured plus any additional benefits like the bonuses. However, a maturity benefit can also include additional bonuses, and as a result, you can get back some additional amount. You can claim this benefit if you pay all the policy premiums and survive until the maturity date of your policy.

What Is Survival Benefit?

Survival benefit is a percentage of the sum assured amount that the insurer will give the policyholder after specific years as decided while purchasing the life insurance plan. This type of life insurance policy is known as a ‘money-back’ plan.

Nevertheless, since this survival benefit is a part of your sum assured amount, your nominee will get less as a death benefit. Let's assume that your policy has a sum assured of ₹1 Crore. However, you collected 15% of your sum assured, in total after the 10th and 15th year of the policy term as a survival benefit. Then, your present sum assured will be (100-15) % of ₹1 Crore = ₹85 Lakh. 

Difference between Survival Benefit and Maturity Benefit

Feature Maturity Benefit Survival Benefit
Payout Time You get the maturity amount only after the maturity period. You can get this survival benefit in the middle of the policy period.
Availability This benefit is available in all life insurance plans except for the pure term plans. It is available only on some selected plans like the money back plans.
Payout Mode You can select either the lump-sum or periodic pay-out option.

In the lump sum option, you will get the entire amount at once. In the latter option, your insurance company will pay you the maturity benefit periodically in small break-ups.		 You will get survival benefits only after the pre-specified policy term. With these smaller pay-outs, you can fulfil your financial goals if planned properly.

Now that you know the underlying differences between survival benefits and maturity benefits, you can properly distinguish these two. You can also decide whether you would like to get the survival benefit or keep your sum assured intact.

Frequently Asked Questions

Can I Get the Survival and Maturity Benefits at the Same Time?

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You will not be able to get both the survival and maturity benefits under one policy. You will get only one of these, whichever meets the terms and conditions of the policy at the time of claiming.

What are the Essential Advantages of Survival Benefits?

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The fixed amount that you get as a survival benefit of your policy can help you fulfil your financial goals. You can leverage this benefit as an extra income source. You can even adjust this survival benefit against your upcoming premium payment. Furthermore, this guaranteed amount is also free from any market risk.

When Can You Claim Maturity Benefits?

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You can file your claim for maturity benefits at the end of the policy term.  

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Disclaimer

  • This is an informative article provided on 'as is' basis for awareness purpose only and not intended as a professional advice. The content of the article is derived from various open sources across the Internet. Digit Life Insurance is not promoting or recommending any aspect in the article or its correctness. Please verify the information and your requirement before taking any decisions.
  • All the figures reflected in the article are for illustrative purposes. The premium for Coverage that one buys depends on various factors including customer requirements, eligibility, age, demography, insurance provider, product, coverage amount, term and other factors
  • Tax Benefits, if applicable depend on the Tax Regime opted by the individual and the applicable tax provision. Please consult your Tax consultant before making any decision.