Understand The Survival Benefits Of Term Insurance Plan In India
Updated On Aug 19, 2022
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One of the best financial options to safeguard your family's future is a term plan. Term insurance plans are basically protection plans. Investing in term insurances offers protection for your loved ones after your demise. However, in the case where you outlive the policy period, the insurer offers you survival benefits of the term insurance plan.
What Is A Term Insurance Plan?
Term insurances are life insurance plans that offer protection for a set amount of time. These policies are referred to as term insurance plans since protection is provided for a defined time frame or term. A term insurance policy would pay out death benefits to designated nominees in the event that the policyholder or insured individual passed away within the time limit specified in the policy, providing the policy is still in effect. In the tragic event that the life insured passes away, term insurance plans ensure that the specified nominees receive a lump sum payment or the sum assured. Term insurance products offer extensive coverage at low costs.
What Is Survival Benefit?
The amount you will receive if you live past the policy's expiration date is known as the survival benefit. The Survival Benefit is primarily seen in money-back plans and policies that offer coverage for your entire life (100 years).
The following benefits of survival may be present:
- Your accumulated bonus.
- profits from investments.
- Total the promised amount
Survival Benefits in Money Back Plans
In Money Back Plans, you receive cash payouts at regular periods as a survival benefit.
Survival Benefits in ULIPs
Since you receive this benefit once the insurance reaches maturity, it is sometimes combined with the "maturity benefit." But there is a difference between these terms. The same policy does not start paying out survival and maturity benefits at the same time. Either of these will happen.
Key Feature Of Term Plans With Survival Benefits
The term plans offering survival benefits have the following key features. They contain a free-lock-in period of 15 days for manually purchased policies and 30 days for those purchased online. The policy term ranges from 5 years to 35 years and has a minimum entry age of 18 years and maximum entry age of 65 years. The grace period is 15 to 30 days and contains flexibility in choosing a plan. The maturity of the policy varies from one policy to another and the policy can also be revived within the policy revival period. The premiums are based on the sum assured and the age of the applicant, and the payment mode also varies from single pay to regular pay.
Other Benefits Available Under Term Insurance Plan
Various complete protection plans are available under term insurance plans besides the survival benefit -
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Death Benefits
Following the policyholder's demise, death benefits will be paid to the selected nominee. The term insurance policy will provide for the policyholder's loved ones in the event of an untimely death. For the family's primary provider to secure protection for their dependents, term insurance plans are of the utmost importance.
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Tax Benefits
In accordance with section 80C of the Indian Income Tax Act of 1961, the policyholder may be eligible to get tax advantages on the premiums paid for a term insurance plan.
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Additional Optional Benefits
There are additional benefits that come along with term insurance plans such as critical illnesses and accidental deaths.
Conclusion
Affordable insurance protection is offered through term insurance policies. Consequently, term insurance policies are especially created to protect you and your family's future from unanticipated events. If something were to happen to the policyholder, his or her dependent would get money. Given that many life insurance providers now provide term life insurance policies, carefully comparing the various options on the market will enable you to select the one that is most suitable for you.
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