Understanding Survival Benefits

What is Survival Benefit?

Survival benefits in life refer to the additional monetary compensation you receive for surviving a predetermined duration. This period is usually after the end of the premium payment term. However, it is important to read the terms and conditions of your term insurance policy at the time of purchase to know the amount of compensation and the duration after which it will be received.

It is also important to note that survival benefits are only payable to the policyholder for outliving a certain number of predetermined years. The benefits are not transferable to the beneficiary/ nominee upon the policyholder's death.

Let us understand survival benefits through an Example:

Rakesh was a newly married 29-year-old. In order to plan for his children’s higher education, he took a policy with a policy term of 20 years and a premium-paying term of 12 years. According to the policy documents, he was supposed to receive 1 lakh rupees every two years after the premium payment term was over. 12 years passed by and his father became sick. The survival benefit compensation of 1 lakh every 2 years helped Rakesh pay for his father’s medicines.

How do Survival Benefits Help?

Only some insurance policies offer survival benefits. It is important to check if your policy has these benefits to avail its advantages. The following are some of the survival benefits:

• Survival benefits encourage policyholders to invest in long-term policies, as they know they can benefit from the additional payout after a certain period.

• The money received as survival benefits can be used for expenses, including education, medicine, healthcare, etc. This way, these new savings can be utilized for short-term or long-term goals.

• From a financial perspective, investing in a policy with a survival benefit can help in portfolio diversification for the policyholder with an efficient combination of savings and coverage from an insurance provider.

What is the difference between Survival Benefit and Maturity Benefit ?

The following table explains the difference between Survival and Maturity Benefits:

Wrapping it up!!

Survival benefits in life insurance policies offer valuable financial support by providing periodic payouts to policyholders who outlive a specified period. This feature not only enhances the appeal of long-term insurance plans but also ensures that policyholders can manage various expenses during their lifetime. By understanding and taking advantage of survival benefits, individuals can make more informed decisions about their insurance needs and better plan for their financial futures.

FAQ's