Group Life Insurance & Term Plan with Maturity Benefit

Life Insurance

Unforeseen situations and uncertainties in life could crop up at any moment leading to the financial impact that can burn a hole into your pocket. Insurance is a must for you and your family to avoid digging dip into your savings or your family’s hard-earned money. It is a financial support against all risks linked to life, health, and property.

In this context, we must understand some specialized Insurance plans like Group Life Insurance & Term Plan with Maturity Benefit for our future security. So let’s take it one by one in detail.

Group Life Insurance works as a collective cover for individuals rather than a single cover for life. The group can be of any quantity and must present some commonality—employees of a company, payers of a club, members of an association, or a group of depositors in a bank. The value of group insurance is cheaper than what it would require for individual insurance of the members. Hence, group life insurance schemes are prevalent with companies as an encouragement for their employees because employees can feel protected. Almost all life insurers in India allow group life insurance schemes (GLIS).

Features of Group Life Insurance Schemes:

Master certificate/member certificate: Usually, the employer is the customer of the group policy cover and holds the master copy of the policy. Members of the group are granted a certificate of insurance. 

Affordability: The group life insurance covers are less costly than individual life insurance; therefore, offered as a security umbrella to their employees. 

Acts as an incentive: The employer, implementing the group life insurance cover, executes it attractive for the employee to work under him. 

Security net for all the members: Life insurance can be costly, and insurers decide on a premium case-to-case basis, or past medical history and lifestyle lead to denial of insurance coverage. Group Life Insurance provides all group members just by their group membership.

Convertibility: Group life insurance cover ceases to operate with the termination of employment. Still, it can be converted into an individual life insurance cover, albeit at a higher cost if the insurer so wishes. 

Low-cost life insurance: It works as a social security net for extremely economically deprived populations and extends life insurance benefits.

Maturity Benefits For Term Life Insurance Plans

Pick a life insurance policy with the best maturity benefit that will offer you as well as your loved ones financial assurance at the end of the plan’s tenure. Then, take from the top life insurance products in the market rendered by the best life insurers.

Term insurance plans are protection plans. They are mainly designed to protect your family against unforeseen circumstances. There are three types of term insurance plans available in India: increasing benefit, level benefit, and decreasing benefit. A term insurance plan is necessary for the family’s breadwinner and those whose health is not in good condition.

Maturity benefits pertain to the amount held by a policyholder or nominee when a policy matures. Term life insurance policies may include the following as maturity benefits:

  • The basic sum is assured.
  • Terminal bonus (if applicable)
  • Accrued guaranteed additions and fixed simple reversionary rewards/bonuses (if any)

Term Plan with Maturity Benefits

The term life insurance plans having maturity benefits are slightly different from the traditional life insurance plans. Typically, a conventional term insurance policy does not offer any direct maturity benefits to the policyholder. 

When either buyer/policyholder needs to have maturity benefit, they can go for a TROP, i.e., Term Return of Premium plan, which provides income replacement and refunds the premiums at maturity, aside from offering all advantages of a traditional term life insurance plan. 

Features of Term Plan with Maturity Benefit

Entry Age

  • Maximum entry age: 65 years
  • Minimum entry age:18 years

Plan type

  • Term insurance plans offer flexibility for choosing a plan. 
  • One can take a plan on a single-life or joint-life basis.

Premium paying term

  • Single, Limited, or Regular pay.

Grace period

  • Normally, 15 days for monthly mode policies and 30 days for other methods.

Age at maturity

  • 25/65/75 years to whole life. Vary from policy to policy.

Policy revival

  • The policy can be renewed from the date of unpaid premium within two years.

Premiums

  • Based on the sum assured and age of the claimant.

Nomination

  • Accept the nomination.

Premium paying frequency

  • Monthly/Yearly.

Sum Assured

  • Differ from policy to policy given by different life insurance companies.

Policy coverage

  • Death benefits and maturity benefits.

Policy term

  • Minimum- 5 years
  • Maximum – 30-35 years

Benefits of Term Plan With Maturity Benefit

Death Benefits: Term insurance plans allow death privileges to delegated nominees. The nominees would get these death benefits if the life assured dies within the policy duration.

Maturity Benefits: Typically, traditional life insurance policies don’t extend maturity benefits. The term return of premium life insurance policies gives maturity benefits by rendering the total amount of premiums advanced so far, provided a policy lasts until the end of the term.

Tax Benefits: The premiums paid and the amount received is exempted from income tax assessment under section 80C and 10 (10D) of the Indian Income Tax Act, 1961. A policyholder can experience tax benefits over the paid premiums for term life insurance plans with maturity benefits. 

Other Benefits:

  • Offer additional riders like Disability riders or Critical Illness and Accidental Death.
  • Term life insurance plans appear at affordable premiums prices.