Term Insurance with Survival Benefits Explained

2025-07-11

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10 minutes read

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Aiming to secure the finances of your loved ones, term insurance might seem an effective option. However, a common conception is that the plan is suitable in case of an unforeseen event. Also, it is considered that the amount is wasted if you live through the investment.

The advanced term insurance plans are designed to prove the belief wrong by providing policyholders with benefits in both scenarios. The benefit obtained on living is called the survival benefit of the term insurance plan, and there are two of them. Let’s explore this with some more information about the term insurance plan.

Key Takeaways

Term insurance with survival benefits ensures you receive financial value even if you outlive the policy.
Two key survival benefits include Return of Premium (get back all premiums paid) and Steady Income (receive regular payouts post maturity).
These plans offer tax-free maturity under Section 10(10D) and tax-saving on premiums under Section 80C.
Ideal for singles, married individuals, and families with kids to secure dependents financially.

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What is a Term Insurance Plan?

A term insurance plan is a type of life insurance plan. It offers financial security through a lump sum amount as a death benefit to the family of the investor in case of the death of the policyholder. The obtained amount is beneficial for the family or loved ones to meet regular expenses such as living costs, housing, education, and others. The protection is offered up to a specific age, beyond which the policyholder gets survival benefits (applicable in certain new term insurance plans only).

Survival Benefits in Term Insurance Plan

The term insurance offers two types of survival benefits:

Return of Premium Benefit
Steady Income Benefit

Return of Premium Benefit

This benefit encompasses the return of the deposited premiums after the policy term. It is applicable if all the to-be-paid premiums have been regularly submitted throughout the tenure. It helps cover the upcoming years of an investor's life. Let’s understand this with an example.

A person buys a term life cover of ₹ 1 crore at the age of 30. Now till the age of 60, i.e., for the next 30 years, they are supposed to pay the premium of ₹ 1600 per month. This makes the total premiums ₹ 5,76,000. Hence, with the return of premium benefit, the person will get back the complete premium after the expiration of the policy. He/She will receive ₹ 5.76 lakhs on maturity.

Steady Income Benefit

This benefit also allows the policyholder to start receiving back their deposited premiums in a periodic manner. It begins at the maturity of the plan. The disbursed amount comprises the premiums paid till the premium paying period and any other additional benefits. Considering the previous example, the premium paying term is 60 years. Hence, the person will start receiving payment after that age. The payment will continue till the remaining policy tenure or the death of the policyholder.

Did You Know?

Many term policies are also “convertible,” as they can be converted into a permanent life insurance policy.

Investopedia

Who Should Opt for a Term Insurance Plan?

The term insurance plans are best suited :

Single individuals: With dependent and retired parents’ responsibility over the single individuals, the unfortunate event will be emotionally straining. Leaving them without finances in such a scenario will further add to the challenges. The term insurance plan will offer them financial assistance as needed.
Married individuals: Every individual deserves financial security. If the spouse is non-working, the benefit is more essential. The married individuals can offer financial protection through the term insurance plan. The monetary benefit after them can offer enough time to move forward through the loss and gain control over their life.
Married individuals with kids: Having a sweet family with spouse and kids requires timely planning to secure their future. The same is possible with a term plan that offers support to meet the endless expenses of kids’ education, career, lifestyle maintenance, and much more.

Advantages of Survival Benefits in a Term Insurance Plan

The chances and wishes for long-term survival are now compatible with the term insurance plan. The feature available in multiple new policies comes along with the following benefit:

It offers peace of mind and financial security that the hefty amount deposited in premiums will be yours at the end, regardless of fate
The term insurance plans also provide flexibility to receive the payments as a lump sum or as regular income
Tax benefits on receiving the maturity amount that is tax-free under Section 10(10D) of the Income Tax Act
Acts as a mode for long-term savings and the retirement fund

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Conclusion

A term insurance plan is an effective tool to safeguard one’s family’s future in case of sudden demise. But the alternative possibility remains as well. To meet the needs of policyholders in both scenarios, term insurance plans allow survival benefits too. Here, policyholders can benefit from the return of deposited premiums in the form of a lump sum or as steady income.

If you are looking for such plans, here are two suggestions to offer the maximum benefits you might need. These are: iSelect Smart360 Term Plan by Canara HSBC Life Insurance or Young Term Plan by Canara HSBC Life Insurance. Explore the options now or connect to get your queries answered.

Glossary

Sum Assured: The guaranteed amount paid to the nominee in case of the policyholder’s demise.
Rider: An additional benefit that enhances a term insurance plan, like critical illness coverage.
Term Insurance: Term insurance is a type of life insurance that offers financial protection for a set period.
Mutual fund: A mutual fund is a pool of money that is invested in stocks, bonds, and other securities.
Financial Dependents: Family members who rely on the policyholder’s income for their financial well-being.

FAQs

The term insurance plans also offer add-on covers. These include benefits during the conditions, such as critical illnesses and monetary benefits like a premium waiver.

It depends on a variety of factors such as the age of the applicant, the existing cost of the family, the wedding and the education of children, and the ability to pay the premium.

Some of the essential documents for a term insurance plan are identity, ag,e and address proof, proof of income, and health reports.

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.