What are Maturity Benefits?

Maturity benefit is the amount you receive after your insurance policy reaches its term. And in some cases, the maturity amount is tax exempted. So, it can be said that the amount a policyholder finalises while signing up for the policy in terms of "Sum Assured" is a maturity benefit. However, the benefit may sometime include other additions depending on the type of policy.

Let us understand more about it in detail.

Maturity Benefit in Insurance – Definition

When a policy attains maturity, the insurance company pays a lump sum as the maturity benefit. If your insurance policy has a 20-year term, you will receive a payout at the end of the 20th year. The maturity amount comprises the premiums paid up to that point plus any additional benefits. However, you should pay all the premiums to be eligible for the maturity benefit.

Life Insurance Plans with Maturity Benefits

There are different types of life insurance policies, and all of the policies do not offer maturity benefits. While choosing a life insurance policy, you must evaluate your financial needs and find a plan that suits you the best.

Listed below are a few life insurance policies that offer maturity benefits:

1. Term Insurance Plan with Return of Premium

Term plans do not offer a maturity benefit as these are pure protection plans. It offers death benefits only. However, some term plans offer the premiums back to you if you survive the policy term.

2. Guaranteed Income/Savings Plan

Savings plan like Canara HSBC Life Insurance iSelect Guaranteed Future offers life cover with guaranteed returns at maturity. For example, you pay ₹20,000 per month for 10 years. You will get covered for 20 years and at the end of 20th year, get ₹66.93 Lakhs.

Such plans also act as a corpus builder for your retirement. It guarantees the maturity benefit, which you can use to fulfil your life goals.

3. Unit Linked Insurance Plans

These are market-linked insurance plans in which a part of the premiums are put towards paying for the life cover, and the remainder is invested in market-linked investment choices that yield returns. A maturity benefit is given under ULIPs if you survive the policy term.

Life insurance policies are financial instruments that provide protection and an option to protect your future with the maturity benefits. Choose a policy depending on your financial goals to help you fulfill your dreams.