How to Claim Life Insurance Benefits on Maturity?
When you buy life insurance, there are two broad types to purchase from. There is pure life insurance, where after the tenure of the policy is over, there are no maturity benefits. Whereas, with life insurance and savings, the tenure of your policy ends, and you receive maturity benefits. For example, you had bought life insurance with savings for a 20-year term. After that tenure ends, the insurance company will give you a payout.
Maturity benefits are only offered in an insurance plan when the policyholder survives the entire tenure of the policy. Also, to be eligible for this, they have to pay all the premiums of the policy till the end of the tenure.
Types of life insurance with maturity benefits
There are several benefits that one can get by choosing life insurance with maturity benefits. Different life insurance plans offer maturity benefits, some of the popular ones being:
Term insurance with return of premium
Term insurance is a type of life insurance where the policyholder gets a life cover for a fixed duration of time. Usually, with simple term insurance, there are no survival benefits that a policyholder gets after the policy ends. However, they can instead opt for term insurance with a return of premium. Here, the policyholder receives survival benefits in the form of a return of premiums for surviving the plan. You can use a life insurance premium calculator to get an estimate of the premium for this maturity plan.
Unit Linked Insurance Plans (ULIPs)
Unit Linked Insurance Plan (ULIP) is a dual benefit plan where you get life insurance and investment in a single plan. Half of the premiums are invested in funds, while the other half is used to secure your life. Depending upon your risk appetite, you can choose the funds you want to put your money in. When your ULIP matures, you receive the fund value, which includes the amount invested along with the interest earned on it. To maximise the benefits of your life insurance with this plan, you must stay invested for the long haul. This is because, over the years, ULIP multiples your returns with compounding.
Endowment plans
Endowment plans are also one of those life insurance plans that offer a blend of investment and insurance. The maturity amount that the policyholder receives in these plans is usually underwhelming. This is because the amount is invested in debt funds which have low risks but also offer low returns.
The process to claim maturity benefits
Getting the maturity benefits of your life insurance policy is quite simple and hassle-free. Before gaining the benefits of life insurance as maturity, it is important to assess that you have done your part. This includes paying the premiums on time and waiting until the end of your policy tenure. Here is how you can go about claiming your maturity benefits:
Step 1: Get the policy discharge form
Your insurance company will send you a Policy Discharge Form a month before your policy is about to expire. You can also download the form from the portal of your insurance company. They will also mention the documents that are needed to be submitted.
Step 2: Fill out the form
The discharge form requires you to provide your name, designation, address, sum assured amount, bank details, and several other information related to maturity benefits. After filing the form, you need to get it signed by two witnesses.
Step3: Enclose the documents needed
Once you have filled the form, enclose the documents that the insurance company requires you to submit:
- Original policy document
- ID proof
- Address proof
- Bank mandate form of bank details
- A cancelled cheque
Step 3: Send the documents and form immediately
You need to send the forms and documents at least 5-7 business days before your policy expires. Doing so ensures a hassle-free settlement process. This is important because forgetting or a delay in sending the documents and form may cause problems in getting your maturity benefits on time.
Step 4: Be patient
Use a life insurance premium calculator to re-check the maturity amount if you have any doubts. Once the insurance company receives the form and documents, they will begin the process of verification. Once the details are verified, the insurance company will credit the maturity amount to your bank account.
Claiming the maturity benefits of your life insurance is simple and hassle-free. Ensure that before buying life insurance, you have read the fine print well. Also, choose insurance providers that have an excellent reputation in the industry.