5 min read
Updated on Apr 24, 2023
Term life insurance policy is a product that allows financial coverage to the insured for a specific time period as per the term of the policy. If the insured dies during such time, the family of the policyholder is paid death benefit by the insurer. However, what if the insured outlives the policy term? Does he receive any survival benefit? Or does he lose his entire money paid as premiums? Let’s take an example to understand this.
Suppose you bought a term insurance plan to secure your family against uncertainties of life in the event of your sudden and untimely demise. However, luckily you survived the term of the plan and outlived the policy. So, now you are worried about your money. Will you get any survival benefit on your policy or you have wasted your money on the plan. The answer is, you will receive money in case you have bought a plan with return of premium option. Let’s understand this in detail below.
As indicated by the name itself, survival benefit is the monetary benefit received by the insured at the end of a policy term under the best term insurance plans. However, in this case the policy has to be a return of premium plan under which the policyholder is allowed survival benefits at maturity if he/she outlives the policy tenure. Survival benefit is not generally offered under the normal term plans as they are available only with return of premium plans.
Also Read: 8 Lesser Known Facts About Term Insurance Plans
Below are some advantages of availing term plans with survival benefits:
Here are some features of term plans with survival benefit:
The market is flooded with insurance companies offering term plans with survival benefits. Hence, it is important to carry on a research of the plans that are available. Further, you should understand the plans and their features properly before buying them. Buy a plan only when you are sure about it in terms of financial security. Also, do read the terms and conditions of the plan that you want to buy.
Here are some best Insurance plans offering Survival Benefits:
Read More: Cheapest Term Life Insurance Plans with the Minimum Sum Insured
Term insurance plans are indeed very popular, especially among people who are looking at providing monetary security to their families in the future. These plans are also lucrative for the beneficiary since they offer survival benefits to the nominee along with death benefits. So, the next time you plan a term insurance seek for a plan offering survival benefit. Moreover, since you already know the survival benefit’s meaning and how you can gain from it, it is better to look for plans allowing such benefits.
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A survival benefit is a benefit that is paid out to the policyholder if they survive the term of the policy. In other words, if the policyholder outlives the term of the policy, they will receive a lump sum payment as a survival benefit.
No, a survival benefit is not included in all term life insurance policies. Some term life insurance policies may include a survival benefit as an optional rider, while others may not offer it at all.
The survival benefit amount is determined at the time the policy is purchased and is usually a percentage of the total premiums paid during the term of the policy. The exact percentage may vary depending on the insurance company and the specific policy.
The survival benefit is paid out to the policyholder at the end of the term of the policy, provided that the policyholder is still alive.
Yes, the survival benefit can be used for any purpose. The policyholder may use the funds to pay for living expenses, medical expenses, or any other expenses they may have.
If the policyholder dies during the term of the policy, their beneficiaries will receive the death benefit as specified in the policy. The survival benefit is only paid out if the policyholder survives the term of the policy.
The tax implications of a survival benefit may vary depending on the country and specific tax laws. In some cases, the survival benefit may be subject to income tax, while in other cases it may be tax-free. It is recommended to consult a tax professional for specific guidance.
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