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Life insurance provides financial security for loved ones in today’s unpredictable world. You just need to select a coverage plan and pay regular premiums for your loved ones to receive a sum assured amount in case of your death. In addition to the death benefit, insurance policies have other benefits. One such benefit is the survival benefit. This article explores more about survival benefits.
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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.
Term Plans
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.
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The following table explains the difference between Survival and Maturity Benefits:
| Parameter | Survival Benefits | Maturity Benefits |
| Definition | Payments made to the policyholder at specified intervals during the policy term, provided the policyholder is alive. The periods are pre determined. | The amount paid to the policyholder at the end of the policy term, provided all premiums have been paid. |
| Purpose | To provide financial support at various stages during the policy term. | To offer a lump sum amount at the policy’s maturity as a long-term savings mechanism. |
| Timing | Paid at regular intervals during the policy term. | Paid at the end of the policy term |
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.
†Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
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