Term insurance plans are known for the simple approach to financial protection for a long yet limited time. Usually, term insurance should work like this - you pay a very small amount every year as premiums to ensure a very large amount is available to your family in case of your early demise. The cover will usually last till retirement or a few years after that.
Standard term insurance plans will stop covering your life upon expiry, with no maturity benefits whatsoever. However, you now have the option to receive maturity benefits from your term insurance policy.
Online term insurance plans generally offer the following survival benefits:
1. Return of Premium
2. Steady Income Benefit
Return of premium means if you survive the policy term and have paid all the premiums religiously over the years, you will receive the premiums back in a lump sum. For example,
You buy a term life cover of Rs 1 crore at the age of 30, for the next 30 years, and start paying a premium of Rs 1600 p.m. If you survive the policy term for 30 years, you have paid a total of Rs 576,000 as a premium for the cover.
Upon expiry, the insurer will return Rs 5.76 lakhs you paid as a premium for the policy.
Steady income benefit is another maturity benefit available with term insurance plans. Under this option, you can start receiving a steady income after completing 60. The income continues for the remaining policy tenure or the death of the policyholder.
So, you can purchase a term insurance plan with steady income benefits to last well into your retired life.
The term insurance with survival benefits offers additional liquidity at the time of retirement for you.