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What Is The Maturity Benefit In Endowment Plan?

Published On Jun 15, 2021

An insurance plan is a necessary purchase that everyone must make. Not only does it help them with their finances, but also their family members. An endowment plan is a great option for insurance as well as investment. It provides you with cover against problematic situations as well as helps you invest and save your money.

However, understandably, an endowment plan will not go on forever. It has a certain policy term after which the plan will reach its maturity. At maturity, the policyholder, or the nominee(s) is paid out a benefit called the maturity benefit. 

What is the Maturity Benefit of An Endowment Plan?

The maturity benefit in an endowment plan is a lump sum benefit that is paid out at the end of the policy term. It is given only once during the entire policy term when it ends. The policyholder and the nominees (in case the policyholder dies before the maturity of the plan and the plan is kept in force) are eligible to receive this benefit.

The amount that is paid out comprises the Sum Assured under the plan, the simple reversionary bonuses and any final bonuses that have been accrued under the plan. It is a substantial amount that is very helpful in sustaining your financial stability. Although some types of insurance plans allow the maturity benefit to be taken out in instalments, that is not the case for endowment plans. The entire benefit is paid out as a lump sum benefit.

Important Benefits Under Endowment Plans

The following are some other important benefits under endowment plans:

  • Rider Benefits

You can add any rider, made available by the insurer, to your base endowment plan. The benefits from them are paid out at the time of the contingency for which they are catered to. The amount may be given in instalments or a lump sum and consists of the Rider Sum Assured. 

  • Death Benefit

In case the policyholder dies before the end of the policy term, their beneficiaries receive a death benefit. It consists of the Sum Assured on Death, the simple reversionary bonus and other bonuses applicable. The total death benefit paid out must not be less than 105% of all the premiums paid till the day of death.

Also read 

Difference Between ULIPs And Endowment Plans

Why Buying Endowment Plans Online Is A Good Option?

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.           

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