Can Term Insurance Plans Yield Maturity Benefits?



The future uncertainties or scenario is not in the hands of an individual. But, thoughtful financial planning is something which is in our hands and purview. It is an unsaid rule to plan for adversities of life or fulfilment of milestones that will certainly crop up in the near future. For this, it is essential to take up our finances seriously and start planning them in a way that will meet future expenditures such as retirement, marriage expenses, children’s education, health expenses, etc.

Thus, choosing a term insurance will emerge to be a smart decision for oneself as well as for the family members. Today, there are several insurance providers who are offering the best term insurance plans, such as Tata AIA Life insurance plans and many others. Therefore, one can research and study these plans and buy term insurance according to one’s requirements.

What is a Term Plan?

A term insurance policy or plan is a full coverage protection life insurance policy that safeguards the family members of the policyholders after their untimely demise. These plans are affordable with a low monthly premium payment. The policyholder can pay the premium on a monthly or yearly basis.

With a term plan in hand, the policyholder can plan a financial plan to meet future costs such as higher education for children, spouse support in their absence, wedding expenses, etc. But, the question that comes to mind is whether a term life insurance policy yields maturity benefits or not. So, let us read more and know about it.

Do Term Insurance Yield Maturity Benefits?

Let us first understand what is meant by maturity benefits. Maturity benefits refer to the amount that is paid along with a bonus amount by the insurance service provider to the policyholder if they survive the policy term or policy tenure of the term insurance policy.

This further makes the life insurance plan turn into a saving plan. But, in the case of a term insurance plan or policy, there is no maturity benefit. The term plan in itself is a pure protection life insurance plan. A fixed premium amount is paid on a yearly basis. In case of any untimely incident, the insurance provider pays the sum assured to the nominee.

Why is There No Term Insurance with Maturity Benefits?

The term insurance plan or a term life insurance policy does not come with a saving component. As a result, there is no maturity benefit with a term plan. The key reason behind this is that there are less bifurcations in the premium amount that you pay for your term insurance policy. Generally, the insurance service providers consider two components for allocating the premium. They are the Wealth creation aspect (savings aspect) and the Life cover amount.

But, in the case of a term plan, the former part is missing. There is no savings aspect in a term insurance policy. The amount paid as a premium is allocated towards safeguarding and securing the future of the policyholder and their family members. Hence, this is the reason why the maturity benefits of term insurance are not there.

Thus, this makes the term insurance policy affordable and imparts pure life cover to the policyholder.


A term insurance policy promises security for the policyholder as they can be assured about the financial safety of their family members. The policy also promises tax benefits to the policyholder. In addition to this, the policyholder can also add riders to the policy, which further increases the scope of the policy. If you are looking to opt for a term plan which offers maturity benefits, you can add the return of premium option to the plan. Thus, this makes the policy a preferred investment avenue despite not giving any maturity benefit to the policyholder.

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