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Is It Wise To Buy A Term Insurance Plan With Maturity Benefit?

Updated On Aug 24, 2021

The term insurance plan is basically a protection plan specifically designed to protect your family from unexpected situations. These plans are essential for breadwinners and people with poor health to ensure their family’s financial protection in an emergency. Term life insurance plans with maturity benefits are slightly different from traditional life insurance plans.

How are Term Insurance Plans With Maturity Benefits Different From Traditional Term Plans?

Traditional term insurance policies generally do not provide any direct maturity benefits to policyholders. They only provide death benefits when the insured dies during the policy term. Therefore, if any life assured wishes to obtain the benefits at maturity, they can choose the Term Return of Premium plan (TROP). In addition to providing all the benefits of traditional term life insurance plans, term premium plans also provide income replacement and premium refunds when due. If the life assured survives till the end of the policy term, he/she can get guaranteed repayment at maturity.

Must Read: How to Select the Right Term Insurance Plan?

What are the Benefits of Term Insurance With Maturity Benefits?

Purchasing a term insurance plan can be pretty beneficial. The following arguments will help you see a clearer picture.

  • Maturity Benefits - Traditional life insurance policies usually do not provide benefits when they expire. However, a term return of premium policy provides maturity benefits by refunding the full premium paid so far, as long as the policy is held until the end of the term.
  • Death Benefits - The plan provides death benefits for designated nominees. If the insured person dies during the term period of the policy, the nominee will receive these death benefits.
  • Rider Benefits - Term insurance with a maturity benefit policy allows you to increase your insurance coverage through additional and supplementary rider options. You can choose critical illness coverage, accidental death coverage or disability coverage.
  • Tax Benefits - The policyholder can enjoy tax incentives for premiums paid for term life insurance plans with maturity benefits. According to Sections 80C and 10 (10D) of the Indian Income Tax Act of 1961, premiums paid and maturity and death benefits received are exempt from income tax.

Is It Wise To Buy A Term Insurance Plan With Maturity Benefit?

A term insurance plan with maturity benefits includes your basic sum assured, applicable accrued bonuses and terminal bonuses(if any). These maturity benefits can prove to be quite beneficial in retirement planning. You would not have to become dependent on your children, friends and family after your retirement. Moreover, you can even use these maturity benefits to pay for your child’s higher education, marriage etc.

Take Away

In order to choose the best term life insurance plan with maturity benefits, you need to look around and do some preliminary research. Then, you can compare the plans available on the insurance market and choose one based on your needs. It is advisable that before making an informed decision, you should evaluate the amount of life insurance, the duration of the policy, the reputation of the insurance company and the type of policy.

Also Read: Term Insurance Plan for Cancer Patients


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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