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Should you buy term insurance with maturity benefits in India?

Term insurance policy helps to protect your family members from financial crunch after your demise as the insurer pays the sum assured to the nominee. However, while this sounds safe for the future, many others aren’t interested because no maturity benefit is offered if the policyholder survives the policy term. This is where the term insurance plan with maturity benefit is helpful as they return the premiums paid during the policy term if the insured person survives the policy tenure. 

Thirty-five-year-old Mr. Singh from Mumbai wanted to secure the financial condition for his family after his demise. He consulted a financial advisor and decided to buy a term plan with maturity benefits since he believed in outliving the policy tenure, as he does not have smoking or drinking habits or any pre-existing illness. So, he purchased a term plan with a return of premium option for a sum assured of Rs 50 lakhs and a tenure of 30 years, for which he needs to pay Rs 6000 as a premium every year. If Mr. Singh passes away within the policy term, his nominee shall receive the sum assured of Rs 50 lakhs as a death benefit. And if he survives the policy term, he will get back all the premiums paid as maturity benefit, which is Rs 1,80,000 (6000 x 30). In this way, he benefits from life cover and gets back the premiums paid on policy maturity. 

A pure term life insurance policy pays the sum assured as a death benefit to the nominee if the policyholder’s demise occurs during the policy term. However, if the policyholder continues to live beyond the policy term, no maturity or survival benefit is provided. 

Term insurance with return of premium plan possesses all of term insurance features but returns the premiums paid as maturity benefit. For example, let us say you have availed of a term insurance policy with a return of premiums for a term of 20 years and paying a premium of Rs 10,000 per year. If you survive the entire policy term of 20 years, the insurer will pay the premium of Rs 2,00,000 (20 x 10,000 = Rs 2,00,000) as a survival benefit at the time of maturity. 

4 Best Term Plans with Maturity Benefits in India

Here are some of India’s best term insurance plans that offer maturity benefits if the policyholder outlives the policy term.

  • Max Life Smart Term Plan: The Smart Term Plan by Max Life Insurance caters to the requirements of people at different stages of life. Under this policy, the coverage amount can be customized and offers maturity benefits in the form of the return of premiums paid.
  • Aviva LifeShield Advantage Plan:  This term insurance plan from Aviva provides you with the option to choose between receiving the death benefit or return of premiums equal to the sum of total premiums paid during the policy term, in case of survival. One can avail of this policy for a term between 10 to 30 years.
  • Tata AIA Life Insurance iRaksha TROP:  As the name suggests, the Tata AIA Life Insurance iRaksha TROP plan provides financial protection for the insured up to the age of 100 years. In case the policyholder survives till maturity, all the premiums paid are returned. Moreover, it offers lower premium rates for women policyholders, and one is also eligible for discounts in premium when the higher sum assured is opted.
  • HDFC Life Click 2 Protect 3D Plus: A comprehensive term insurance plan from HDFC Life, allowing customization through multiple plan options that can be chosen according to your needs. In addition, under the Return of Premium Option, the company will return all the premiums paid till the end of the policy term if the policyholder survives till the end of the policy term.


Term Insurance with Maturity Benefits

If you have questions like – Is term insurance with maturity benefit worth buying? Then here are the advantages of these policies. 

  • Coverage: Term insurance is the preferred choice for people looking for plans with high sum assured as it can cover the financial costs of their family when they are not present. Policies with maturity benefits continue to offer high sum assured, but the premiums might cost a little extra compared to a standard term plan. The high coverage and the return of premiums on survival are the single most significant advantage that makes these plans quite attractive.
  • Maturity Benefit: The return of premiums paid for the insurance at the end of the policy term on survival is an exclusive advantage that one can get in these policies. A dual benefit of life protection at affordable cost and maturity benefit makes it a worthy investment choice. By bringing back the premiums, the guilt of seeing the premium going unutilized is also spared.
  • Riders:  A term insurance plan with maturity benefit also has options to choose the right rider or add-on and extend the coverage of the policy. Some of the standard riders are the accidental death benefit rider, critical illness rider, a disability rider, etc.
  • Income Tax Benefits: Like in all other insurance investments, a term plan with maturity benefits also enables you to claim income tax benefits over the premium paid under section 80C of the Indian Income Tax Act. The benefits received are fully tax-exempted under section 10 (10D).


Therefore, it depends on your requirement and preference whether to opt for a term plan with maturity benefit or not. However, you need to remember that the premiums are high in the case of a term plan with a return of premium, while the traditional term plans have lower premiums. to know more about term insurance with maturity benefits, you can visit iiflinsurance.com and make the right buying decision.

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