Death Benefit vs. Maturity Benefit
Published On Jun 11, 2021 1:30 PM By Shrida Gulati
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Life insurance is mainly known for providing death benefit that is the sum assured amount, to the nominee in case of life assured’s unforeseen death. Life insurance has many types and every type has different features in them, some life insurance plans also offer maturity benefits. Maturity benefit is very different from the death benefit. Read below to learn more about the death benefits and maturity benefits briefly.
What is Life Insurance Death Benefit?
In case the life assured passes away during the policy tenure the money invested in the life insurance policy is paid out to the nominee. The nominee receives the death benefit if the life assured has a natural cause of death or the life assured passes away in an accident given that he/she was not intoxicated. The death benefit will not be provided to the nominee if the life assured commits suicide within the first year of issuance of the policy, if the life assured passes away from self inflicted injuries, if the life assured passes away from drug or alcohol abuse or if the life assured passes away during a natural disaster.
What is Life Insurance Maturity Benefit?
Maturity benefit is denoted to the amount that the life assured receives when the life insurance policy matures. That is when the life insurance company pays out a lump sum amount to the life assured when their life insurance policy matures. The life assured will only get the maturity benefit when he/she pays the premium on a regular basis and the policy matures at the given time in the contract. Generally maturity lump sum benefit is multiple of the total premiums paid upto the time of maturity along with the additional bonus amount that the insurance company chooses to pay to the life assured.
How is Death Benefit Different From Maturity Benefit?
The death benefit is an amount that the insurance company provides to the nominee on the unforeseen demise of the life assured on the other hand the maturity benefit amount is an amount which the insurance company has to pay to the policy holder in the of their life insurance policy being matured. The insurance company sometimes provides the life assured with a maturity benefit amount along with bonuses. Both of the claim benefits are very different from each other.
Now you have a better understanding of both of the claim benefits under a life insurance policy, sometimes you can find a plan that offers both but you may be able to choose only one at a time. It is very clear that death benefit is paid in the event of demise of the life assured and maturity benefit is paid out in the event of life insurance policy being mature in the given maturity tenure.
You may also like to read:-
- Who Is Eligible To Receive Life Insurance Claim Benefit?
- Mistakes To Be Avoided While Buying A Life Insurance Plan
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.