Whatsapp Icon

A Quick Guide to Understand What is Maturity in Insurance

It is essential to get life insurance to safeguard your loved ones in the event of death, accidents, or impairments that result in a loss of income. Though the value of human life cannot be measured in monetary terms, the compensating sum is calculated based on the potential loss of future earnings. This is why the phrase "sum assured" refers to the guaranteed amount that the policyholder's family will receive if the life insured dies. You should consider the maturity benefits of a life insurance while making your decision. This article covers all you need to know about life insurance's maturity advantages and how to get maturity.

What Is Maturity in Insurance?

The maturity benefit is a lump-sum payment made by the insurance provider when the policy has reached its expiration date. It simply implies that if your insurance policy has a 15-year term, you, the insured, will get a payout at the end of those 15 years. Generally, the maturity amount meaning refers to the sum of the premiums paid upto that time and the additional benefits which the insurance company chooses to give to the policyholder. You will only be eligible for this if you have paid all of your premiums and finished the term. Furthermore, a maturity benefit policy covers the risk of mortality. It safeguards your family's future in the case of a mishap leading to loss of life of the insured.

Various Types of Maturity Benefit Plans

Plans with maturity benefits provide several perks. However, the sorts of premiums, investments, and benefits vary. The three most popular types of maturity benefit programs are as follows :

Term Insurance with Return of Premium (TROP Plans)

If the insured survives the policy term, the additional benefit of return of premiums is offered to the policyholder, when the insurance is terminated at maturity in Term Insurance with Return on Premium

Plans for Endowment

Linked endowment plans are a mix of investment and insurance in most cases. The guaranteed amount is not particularly large in this case. Funds are invested in debt funds, which means that the returns are lower risk and more reliable. However, in traditional non- linked endowment policies, a sum assured amount is paid as lump- sum to the policyholder as maturity benefit, or to the beneficiary as death benefit.

Unit Linked Insurance Plans (ULIPs)

Unit Linked Insurance Plans (ULIPs) are susceptible to market forces, and the danger is more significant than it is with non- linked life insurance. A portion of the premiums is invested in financial instruments, while the rest is used for securing your life. The fund choice is made by the policyholder and therefore the investment risk is borne by the policyholder. A maturity benefit of ULIP is the amount offered by the insurer to the policyholder if the policyholder survives beyond the maturity period of the policy. The maturity benefit is equal to the amount of the fund value.

Advantages of a Term Life Insurance Plan

Term life insurance has premiums that are both cheap and feasible. It is beneficial to families that have a low income, a fluctuating income, or both. It gives benefits such as tax deductions, lowering the number of annual premiums to be paid. If the policyholder is unable to pay, they have the option to withdraw the plan at any time. It also has riders for Critical Illness, Accidental Deaths, and other assistance.

How to get Maturity?

The process of getting maturity is straightforward and effortless :

  • You must first get the Policy Release Form. Typically, about a month before your policy matures, your insurer will send you a Policy Release Form.
  • After you've finished filling out the form, you'll need two witnesses to sign it.
  • Then, few days before maturity date, provide the duly- filled form and required documentation to the insurer. It is critical because you may have difficulty receiving your maturity benefits if you fail to submit the paperwork on time.
  • Finally, pay attention to the maturity amount. After your policy matures, the insurance provider will verify the information and send it to your bank account. However, this process might change according to different insurance companies.

Conclusion

If you have all of the necessary documents, settling the types of maturity claims will be a simple process. It's critical to use the maturity advantages carefully once you've received your claim. Choose an appropriate life insurance plan based on your present position or life stage to ensure that you and your family have protection in the case of an unforeseen incident. Life insurance may serve as more than a safety net for your loved ones. Maturity benefits might give substantial financial assistance and come in useful when you want to achieve your goals in life.

Disclaimer:

*Tax benefits are as per the Income Tax Act, 1961, and are subject to any amendments made thereto from time to time
The article is meant to be general and informative in nature and should not be construed as solicitation material. Please read the related product brochures for exclusions, terms and conditions, warranties, etc. carefully before concluding a sale.
Make responsible financial decisions. Consult with your financial advisor before making any decisions on insurance purchase.

Suggested Plans

Bharti AXA Life Grameen Jeevan Bima Yojana

  • Non-Linked Non-Participating Life Term Micro Insurance Plan
  • Flexibility to opt for two plan options: Pure Protection Plan Option, Protection with Return of Premium Option
  • Flexibility in Policy Term/Premium Payment Terms
  • No medical examination
  • Tax benefits

Bharti AXA Life Saral Jeevan Bima Plan

  • Non-Linked Non-Participating term insurance plan
  • Double the sum Assured on death due to Accident
  • Flexibility to choose a policy term
  • No medical examinations• Ease of purchase as no lengthy underwriting procedures are involved.
  • Tax benefits

Bharti AXA Life Premier Protect Plan

  • Flexibility in Policy Term
  • Flexibility in Premium Payment Terms ( Single , Limited, and RegularPay Options)
  • Multiple Death Benefit Payout Option
  • Increase the Sum Assured on important milestones
  • Tax benefits