Survival benefit is a part of a majority of life insurance policies, and it allows policyholders to benefit from additional financial compensation for surviving a said period within the terms of the policy.
In a world full of unpredictability, purchasing life insurance for you and your family is one of the most important decisions to build a secure future. Many types of life insurance policies are popular, with their own additional benefits. One such benefit is the survival benefit.
So, what is the survival benefit in insurance? How is life insurance with survival benefits better than a normal life insurance policy?
Survival benefit increases the overall benefits a life insurance policy offers by providing financial protection and compensation for added savings. With the prime knowledge of different life insurance policies available, it is crucial also to understand how survival benefits can add more value to your chosen life insurance policy.
In this blog, we will discuss what a survival benefit is, how it helps, and much more.
What is the Survival Benefit in Life Insurance?
Survival benefit in life insurance is additional monetary compensation that you receive as a policyholder for surviving a pre-decided duration within the policy. It is majorly a part of life insurance policies that offer full life coverage, like whole life insurance and term insurance.
Survival benefits are slightly different from maturity benefits and death benefits. Even though each is similar, survival benefits are not included in all life insurance policies and, therefore, have their own set of inclusions and exclusions for eligibility.
To understand survival benefits meaning in terms of insurance policy, it is important to know that any survival benefit insurance policy only offers pay-out to the policyholders when they outlive a specific time window and is not transferable. In case the policyholder does not survive, there is no survival benefit applicable, and only the policyholder's nominee is eligible to receive a death claim.
How do Survival Benefits Help?
As discussed before, only some life insurance policies offer survival benefits, and the list includes endowment plans and money-back policies. Other than these, some life insurance policies might offer benefits under other categories that can help survival. Let us dig deeper into how survival benefits help policyholders.
Survival benefits can encourage policyholders to invest in long-term tenures for insurance policies, as they are aware that they can benefit from the additional payout after surviving a said period.
The money received as survival benefits can be utilised for different expenses, including education, medicine or healthcare, day-to-day life expenses for the second innings, etc. This way, these new savings can be utilised for short-term or long-term goals.
From the point of view of a financial portfolio, investing and purchasing insurance policies that offer survival benefits can help with better portfolio diversification for the policyholder with an efficient combination of savings and coverage from an insurance provider.
If you are looking for life insurance with survival benefits, it is essential to understand what you will receive as part of this benefit and how you can utilise this for a better future. Survival benefit is considered a valuable tool that can help with better financial security for policyholders. As the insured, you receive financial assistance in unforeseen circumstances and a potential scope of savings inflow, which can be used later.
Do remember to always choose your life insurance policies after carefully understanding the different benefits it offers. Additionally, choosing a life insurance policy whose terms, conditions and survival benefits align best with your financial objectives and future requirements will be the best choice.