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Life insurance is a worthy tool to safeguard your money and ease the lives of your loved ones. Offering survival benefits by acting as a retirement plan, it also acts to glorify the golden years of life. However, apart from the plan, there are more benefits in store for policyholders. We are referring to life insurance riders. Unaware of it and wondering what purpose it would serve? Welcome! You are in the right place. Let’s explore the life insurance riders.
Key Takeaways
Life insurance with maturity benefits ensures financial security for your family and returns if you outlive the policy term.
Unlike traditional term plans, these policies pay out a lump sum at maturity, offering both protection and savings.
Types of such policies include Return of Premium (ROP) term insurance, Guaranteed Savings Plans (like iSelect Guaranteed Future Plus), ULIPs, which offer market-linked growth plus life cover.
These plans help with wealth creation, retirement planning, and goal-based investing while ensuring tax benefits under Sections 80C and 10(10D).
What Do Maturity Benefits Mean?
Imagine you have been paying the premiums towards your life insurance correctly to ensure the financial protection of your family. Now, the policy term has come to an end, and you have outlived the policy. What happens in this scenario? If you signed up for a traditional term insurance plan, you will not get anything.
Now, suppose you have a life insurance policy with maturity benefits. At the end of the term, a lump sum amount is paid, known as a maturity benefit. The amount usually includes the sum of the premiums with a bonus or accrued interest.
Types of Life Insurance with Maturity Benefits
Looking for a life insurance policy with maturity benefits? Life insurance policies with maturity benefits generally include the following options::
Term Insurance Plan with Return of Premium (ROP)
Term insurance is a good plan to ensure the financial security of your family. But what if you outlive the policy? A term insurance with a return of premium option gets you back all the money you paid over the years. This means while the plan promises economic security to your loved ones, it ensures that you do not face any financial loss.
Guaranteed Income/Savings Plan
Want to plan your financial growth and also get life coverage? Opt for a guaranteed income or savings plan. These give you maturity benefits and protection. Such plans often allow different options depending on financial goals.
Unit Linked Insurance Plans (ULIPs)
Are you investment-savvy? ULIPs are the best choice. A percentage of the premium you pay is invested in the market, while the remaining goes into providing you with life cover. At maturity, the total fund value is handed out to you. This depends on the market conditions and the types of funds you choose to invest in.
ULIPs allow diversification of funds based on risk tolerance and provide life cover along with market-linked returns. They also permit partial withdrawals after completion of the mandatory 5-year lock-in period.
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Why Consider Life Insurance with Maturity Benefits
A life insurance policy with maturity benefits comes with its share of perks, like:
Financial Security
When you sign up for this policy, you can be assured that your family’s financial needs will be taken care of, even when you are not around. This gives you complete peace of mind and ensures the economic security of your loved ones.
Wealth Creation
A life insurance policy with maturity benefits works towards building a corpus that you can use in the later years. It compels you to set aside some amount that rewards you substantially on completion of the policy term.
Tax Benefits
Do you know that this policy brings you tax benefits? The premium gets deductions under Section 80C of the Income Tax Act, 1961. The maturity benefits are also fully exempt under Section 10(10D) if the premium paid is not higher than 10% of the total sum assured.
Did You Know?
The origins of modern insurance can be found in the London Fire of 1666. Due to the severity of the fires, insurance became essential rather than optional.
Source: Investopedia
Selecting Life Insurance with Maturity Benefits: Key Considerations
Planning to sign up for a life insurance policy with maturity benefits? Evaluation of these factors is crucial:
Financial Goals
Why are you investing in life insurance - to fund your child’s education, buy a house, or plan for retirement? A clear aim guides you in picking the right policy.
Policy Terms
Check if the policy terms align with your financial milestones. For example, if you will retire in 25 years, choose a policy that matures around that time.
Affordability of Premium
Get a clear picture of the premium you are expected to pay for the life insurance policy. Analyse your budget before committing to it. Remember that too many financial commitments can put a strain on your pocket.
Risk Appetite
Aiming for wealth creation with ULIPs? Since these are market-linked plans, the returns depend on the market conditions. So, consider how much risk you are ready to tolerate and choose the funds to invest in accordingly.
Insurer’s Claim Settlement Ratio
Always buy life insurance from reputed financial institutions with a high claim settlement ratio. This ensures that your claim will be settled easily and quickly.
Life Insurance - Top Selling Plans
We bring you a collection of popular Canara HSBC life insurance plans. Forget the dusty brochures and endless offline visits! Dive into the features of our top-selling online insurance plans and buy the one that meets your goals and requirements. You and your wallet will be thankful in the future as we brighten up your financial future with these plans.
Family Shield: Enhanced Protection
iSelect Smart360 Term Plan
3 Plan options
Life cover till 99 years
Steady income benefit
Block your premium at inception
Start Young, Pay Less, Stay Secured
Young Term Plan
Life cover till 99 years
Coverage for spouse
Block your premium rate
Covers 40 critical illness
Fixed Returns, Zero Risks & Worries
iSelect Guaranteed Future Plus
4 Plan options
Life cover + Guaranteed benefits
Accidental death benefit
Premium protection cover
Conclusion
Incorporate life insurance with maturity benefits into your wealth portfolio, as it strikes a balance between protection and savings. Familiarise yourself with various plans to pick one that will suit your plans and risk-taking capacity. Make an educated choice while opting for a policy that will fit into your long-term strategy. Explore the options provided by Canara HSBC Life Insurance to get life coverage along with maturity benefits that align with your goals.
Glossary
Sum Insured: Sum insured is the maximum cap on the costs you are covered for in a year against any unfortunate event. It is applicable to non-life insurance policies like home and health insurance.
Sum Assured: Sum assured is the amount the life insurance company pays to the nominee if the insured event happens (death of insured). This term is used in life insurance policies.
Maturity Value: The amount of money paid out when a life insurance policy matures is known as its maturity value.
Risk Transfer: Risk transfer is a strategic method where a pure risk can be contractually shifted from one party to another as part of risk management and control.
FAQs Related to Insurance Policy
Use this formula to calculate the maturity benefits of your policy:
Maturity Benefit = Sum Assured (On Maturity) + Accrued Bonuses + Any Final Bonus
Canara HSBC Life Insurance offers a grace period of 30 days for premium payments. In the case of monthly premiums, the grace period is 15 days.
In order to claim maturity benefits, submit the following documents with Canara HSBC Life Insurance:
Policy discharge form
Original policy document
Your ID and age proof
A cancelled cheque or a copy of the bank passbook
Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.
