Maturity Benefits In MB Plans
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Maturity benefits are also quite similar to survival benefits. However, in the case of plans that offer survival benefits, they are generally paid out to the policyholder at the end of the premium payment term, as opposed to the policy term. This becomes relevant in policies where the premium payment term is different from the policy term.
For example, say you have purchased a savings plan with a policy term of 25 years. The premium payment term, however, is only 18 years. So, at the end of 18 years, you will get survival benefits from your policy. And at the end of 25 years, you will get maturity benefits. Here as well, you need to keep in mind that survival benefits will only be paid out if:
- You have paid all your premiums
- You have survived the premium payment term
Are Survival Benefits The Same As Maturity Benefits?
Not really. Despite having differences, maturity benefits and survival benefits have one thing in common. They both offer tax benefits under section 10(10D) of the Income Tax Act, 1961. As per this section, the amount you receive from your life insurance policy is exempt from tax. This includes both maturity benefits and survival benefits.
What Are The Advantages Of Maturity Benefits?
Maturity benefits from money back policies offer the following advantages to policyholders.
- They can act as a source of extra income during the policy term.
- They help you fulfill life goals that may come up at the end of your premium payment term.
- They give rewards sooner than later, thereby making it easier for policyholders to enjoy the benefit of their investments.
- These returns are risk-free, since they are guaranteed and predetermined.
- And of course, you also get to take advantage of the tax benefits they come with.
Conclusion
Now that you know how maturity benefits work, make sure you keep an eye out for this feature if you’re planning to buy a money back insurance plan. In case you opt for a policy that gives you maturity benefits, ensure that you read the options available and the terms and conditions of choosing each of those options. That way, you can make the most of the benefits under the plan and choose the one that is most advantageous for you.
Also read: A Detailed Guide To Buy Mb Plans In India
