Does a term insurance plan offer maturity benefits?

A pure term plan offers only a life cover that extends a death benefit on the policyholder’s death. However, a term plan with a return of premiums will offer a maturity benefit. If you outlive the policy term, you will be eligible to receive the total premiums paid towards the policy throughout the policy term.

What happens when a term insurance policy matures?

When a pure term plan matures, the policy will terminate, and no benefits can be offered. When a term plan with a return of premium matures, the total premiums paid over the premium paying term will be returned to the policyholder as a maturity benefit.

Is there a way to get money back in term insurance after maturity?

Yes, if you want to receive your money on maturity in a term plan, you can opt for a term plan with a return on premium. This type of term plan offers a return of all the premiums paid on the policy during the premium payment term.

What is the difference between a pure term insurance plan and a term plan with maturity benefits?

A pure term plan will only offer a life cover that will extend death benefits to the beneficiaries. Once this benefit is paid out, no other benefit will be payable. However, if the policyholder survives the term of a pure term plan, no maturity benefits will be paid out when the tenure is over. A term plan with maturity benefits will offer the death benefits or the maturity benefits to the beneficiaries or the policyholder, as per the applicable scenario.

Are the term insurance maturity benefits taxable?

The maturity benefits on term insurance with return of premium will be tax-free under Section 10(10D) of the Income Tax Act subject to fulfilling conditions under section 10(10D).

Which type of term insurance is the best?

The type of term plan that will be suitable for you will depend completely on your insurance needs. Those seeking only a pure life cover can opt for a pure term insurance plan. On the other hand, if you also want maturity benefits at the end of the policy term, you can opt for a term plan with a return of premiums.

What is the difference between maturity value and sum assured in term insurance?

The sum assured of a term plan is the predetermined coverage that can be offered as a death benefit to the beneficiaries in the event of the policyholder’s death. In contrast, the maturity value of a term plan is the return of the total premiums paid on the policy during the premium payment term.

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Term Insurance with Maturity Benefits

Term insurance secures the family’s financial future in the absence of primary breadwinner. Pure term plans provide life cover at low premiums Read more but do not provide maturity benefits. Those looking for added value can opt for Term Insurance with Return of Premium (TROP) which provides coverage and refunds the total premiums if the policyholder survives the term. This offers security and peace of mind. Read less

Term insurance secures the family’s financial future in the absence of primary breadwinner. Read more Pure term plans provide life cover at low premiums but do not provide maturity benefits. Those looking for added value can opt for Term Insurance with Return of Premium (TROP) which provides coverage and refunds the total premiums if the policyholder survives the term. This offers security and peace of mind. Read less

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2% discount on 1st year premium on these milestones

Event	Eligibility
Wedding (1 wedding only)	Within 6 months before or after the date of wedding
Birth/ Adoption of 1^st child*	Within 6 months before or after the birth/ adoption date
Home loan	Within 6 months of loan getting sanctioned
First job	Within 6 months of joining date

*Policy issuance eligibility for female customers will be determined by Board Approved Underwriting Policy (BAUP)

The above milestones cannot be clubbed to avail more discount, Such discount shall be capped to a maximum of ₹500 over the year.

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Written by

Vishal Kapoor

Insurance Expert

Vishal Kapoor

Vishal Kapoor, AVP - Brand & Product Marketing at Tata AIA, has over 17 years of experience in the BFSI sector. He is responsible for driving brand strategy, product & channel marketing campaigns.

Reviewed by

Girish J Kalra

Chief Marketing Officer

Girish J Kalra

Girish J Kalra, Chief Marketing Officer at Tata AIA, leading the organizations marketing & corporate communication initiatives..

What is a Term Insurance Plan?

Family with their Pet Dog Enjoying Life After with a Term Plan

A term insurance plan is a pure protection policy that provides financial security to a family in case of the policyholder’s untimely demise during the policy term. It pays a fixed sum assured to the beneficiaries, helping them cope with financial challenges. This amount may be used to manage important life goals, such as funding children’s higher education, which often involves significant expenses in India or abroad. It also supports marriage costs, which can be a major financial responsibility for many families.

Additionally, the payout may help repay large debts like home loans or business liabilities, preventing asset loss or financial burden on dependents. With affordable premiums and high coverage, term plans offer critical protection and peace of mind.

Is there a Maturity Benefit in Term Insurance?

The premiums paid towards a term insurance policy primarily offer only life cover to your family without any maturity benefits. However, in the case of a Term Insurance with Return of Premium (TROP), the total premiums paid during the policy tenure are refunded to you as a maturity benefit if you survive the term. This lump sum amount may be used based on your financial needs, such as building a retirement corpus, investing, or meeting other life goals.

If the policyholder passes away during the policy term, the plan still provides the death benefit to the nominee. They can receive it either as a one-time payout or regular income, depending on the option selected while purchasing the policy.

Key features of Term Insurance with Maturity benefits

Term insurance with maturity benefit, also called TROP, offers life cover along with the return of total premiums paid if the policyholder survives the policy term. Below are its key features:

Entry Age: You may enter a TROP plan between the ages of 18 and 65 years.
Premium Payment Options: You may choose to pay the premium in one instance (single pay), for a limited period (limited pay), or throughout the policy term (regular pay).
Policy Maturity Age: This age varies depending on the insurance plan.
Payment Frequency: Premiums can be paid either monthly or yearly.
Coverage: These plans offer both death benefits and maturity benefits. You may also nominate someone to receive the payout.
Policy Term: The minimum term is 5 years, and the maximum may range from 30 to 35 years.
Premium: Premium amount depends on your age and the chosen sum assured.
Free Look Period: You get 15 days to review the plan if bought offline and 30 days if bought online.

This type of plan offers both protection and financial return, supporting long-term security.

Tata AIA Term Insurance Plans with Maturity Benefits

When you purchase term insurance with maturity benefits, the benefit is available in the form of the return of premiums. The total premiums paid on the policy are paid out when the policy matures and if the policyholder survives the policy term.

Advantages of a Term Insurance with Maturity Benefits

Term plans that offer returns on maturity may have higher premiums than a traditional pure term plan. However, this is often considered helpful since the amount offered on policy maturity must be significant enough for you and your family. Moreover, for reasonable premiums, you can compare various policies and choose a suitable one.

A term plan with a maturity benefit comes with the following advantages:

Assured Protection
: Just like a pure term plan, term insurance with a maturity benefit also offers a death benefit on the policyholder's untimely demise. In this case, the appointed nominee may file a claim with the life insurance company and receive the death benefit sum assured as predetermined under the policy.
Comprehensive Financial Security
: A term policy with a maturity benefit provides comprehensive financial security to your family and you. The death benefit and the maturity benefit may help sustain you and your beneficiaries, depending on the scenario.
Tax Benefits⁴
: A term plan with a maturity benefit is eligible for tax⁴ deductions under Section 80C of the Income Tax Act, where you may claim deductions on the premiums paid. The policy's death benefit is exempt from tax under Section 10(10D).

Who Should Purchase Term Plan with Maturity Benefits?

Term plans with maturity benefits can be suitable for different policyholders, depending on their individual goals and financial responsibilities. Since the maturity benefit is paid out as a lump sum to the policyholder at the end of the policy term, here are some categories of individuals who may consider opting for a term policy with maturity benefits:

Newly Married Couples

Marriage is a significant milestone that brings new financial obligations. With a term plan that offers extensive life insurance coverage, newly married couples may also benefit from the return of premiums. The lump sum amount received on maturity may help keep funds for future planning.

Newly Married Couples

Marriage is a significant milestone that brings new financial obligations. With a term plan that offers extensive life insurance coverage, newly married couples may also benefit from the return of premiums. The lump sum amount received on maturity may help keep funds for future planning.
Young Parents

Young parents may opt for a term plan with return of premiums, as the life cover protects their children’s future in case the policyholder passes away within the policy term. Additionally, the maturity benefit received at the end of the term may supplement existing savings and help achieve goals such as higher education and career-orientated programmes.

Young Parents

Young parents may opt for a term plan with return of premiums, as the life cover protects their children’s future in case the policyholder passes away within the policy term. Additionally, the maturity benefit received at the end of the term may supplement existing savings and help achieve goals such as higher education and career-orientated programmes.
Self-employed Persons

Self-employed professionals or entrepreneurs require life insurance coverage to safeguard their families and manage financial obligations such as loans or debts. The dual advantage of death and maturity benefits offered by term plans with maturity payouts helps in planning long-term financial commitments and risk preparedness.

Self-employed Persons

Self-employed professionals or entrepreneurs require life insurance coverage to safeguard their families and manage financial obligations such as loans or debts. The dual advantage of death and maturity benefits offered by term plans with maturity payouts helps in planning long-term financial commitments and risk preparedness.
Homemakers

Life insurance is equally important for homemakers. While term insurance provides protection at affordable premiums, the maturity benefit acts as an additional saving that can be used to support their family or build an emergency reserve.

Homemakers

Life insurance is equally important for homemakers. While term insurance provides protection at affordable premiums, the maturity benefit acts as an additional saving that can be used to support their family or build an emergency reserve.

How to Choose the Best Term Plan with Maturity Benefits?

To select the best term insurance plan with maturity benefits, you must assess your financial obligations, your family’s future needs, and key policy features.

Evaluate Your Family’s Life Stage Requirements

A term plan with maturity benefits may provide comprehensive coverage throughout the policy term. Consider the evolving needs of your family, such as children’s education, healthcare requirements, and routine expenses at various life stages. Choose a plan that aligns with these goals and offers adequate protection.
Consider Loans and Liabilities

Your term insurance plan should account for any existing loans or liabilities to ensure your family is not financially burdened in your absence. Assess the sum assured carefully and opt for a policy that offers sufficient coverage to clear debts and maintain financial stability.
Calculate The Premiums

While term insurance plans are cost-effective, policies with maturity benefits involve higher premiums due to the added payout. Use premium calculators to determine the amount you may comfortably pay and choose a policy that fits your budget.
Explore Premium Payment Options

Ensure the policy offers flexibility in premium payment modes. You may select Single Pay, Regular Pay, or Limited Pay options, with frequencies such as monthly, quarterly, half-yearly, or annually based on your income cycle and convenience.
Compare Term Plans

Due to the flexibility of term plans, evaluate multiple policies and their features to find the one that best suits your needs. Look for included benefits like critical illness cover, or consider policies that extend coverage up to whole life for added security.
Look for Better Claim Settlement

An insurer’s claim settlement ratio reflects their commitment to supporting policyholders’ families during difficult times. Prefer insurers with a consistently high claim settlement ratio, ensuring timely disbursal of the death benefit.

Reasons to Buy Term Insurance Even Though There are No Maturity Benefits

Term insurance is primarily designed to offer financial protection to the family in case of your death. Some people hesitate due to the absence of maturity benefits. However, it’s vital to understand the core purpose of term plans – providing high life cover at an affordable premium.

A pure term plan allows you to secure a substantial sum assured for a relatively low cost. This ensures that in your absence, your family has enough financial support to cover living expenses, repay loans, and meet future goals such as children's education or marriage.

Moreover, Term Insurance with Return of Premium (TROP) plans are available. They return the premiums paid if you survive the policy term. So, choosing suitable term plans can ensure peace of mind and also maturity benefits.

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FAQ's on Term Insurance with Maturity Benefits

Does a term insurance plan offer maturity benefits?

No, a pure term insurance plan does not offer maturity benefits. However, a term plan with a return of premiums returns the premiums paid if the policyholder survives the policy term.
What happens when a term insurance policy matures?

When a pure term plan matures, it ends without any payout. However, a return of premium term plan refunds the total premiums paid as a maturity benefit to the policyholder.
Is there a way to get money back in term insurance after maturity?

Yes, to receive a payout on maturity, you may choose a term plan with return of premium. It refunds all premiums paid during the policy’s premium payment term to the policyholder.
What is the difference between a pure term insurance plan and a term plan with maturity benefits?

A pure term plan offers only death benefits. In contrast, a term plan with maturity benefits pays either death or maturity benefits, provided all premiums are paid and the policy remains active.
Are the term insurance maturity benefits taxable?

Maturity benefits from a term insurance plan with return of premium are tax-free under Section 10(10D) of the Income Tax Act if the specified conditions are met.
Which type of term insurance is considered suitable?

A suitable term insurance depends on your needs. You can choose a pure term plan that provides life cover, ensuring your family’s financial security. You can opt for a return of premium plan to avail maturity benefit upon surviving the policy term.
What is the difference between maturity value and sum assured in term insurance?

The sum assured is the amount nominees receive as a death benefit. Whereas maturity value is the total premium amount returned to policyholders upon surviving the policy term if they opted for the return of premium.

Disclaimer
- Tata AIA Sampoorna Raksha Promise - Non-Linked, Non-Participating, pure risk, Individual Life Insurance Product (UIN:110N176V08)
- ¹Illustrated Premium is the monthly premium excluding taxes for 20 yr. old female, Standard Life, Non-Smoker for ₹ 50 Lakh Sum Assured with Policy Term of 20 yrs. (Regular Pay) under Life Promise Option with first year premium discount for digital purchase and salaried person. Please refer Benefit Illustration for more details. Premium is subject to applicable taxes, cesses & levies which will be entirely borne/ paid by the Policyholder, in addition to the payment of such Premium. Tata AIA Life shall have the right to claim, deduct, adjust, recover the amount of any applicable tax or imposition, levied by any statutory or administrative body, from the benefits payable under the Policy. Kindly refer the sales illustration for the exact premium.
- ²Individual Death Claim Settlement Ratio in FY 24-25
- ³Applicable to only non-early claims with more than 3 years of policy duration, non-investigation cases, up to Sum Assured of ₹50 Lakh. Applicable for branch walk in. Time limit to submit claim to Tata AIA Life Insurance is 2 pm on working days. Subject to submission of complete documents. Not applicable for ULIP policies and open title claims.
- ⁴Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfillment of conditions stipulated therein. Income Tax laws are subject to change from time to time. Tata AIA Life Insurance Company Ltd. does not assume responsibility on tax implication mentioned anywhere in this document. Please consult your own tax consultant to know the tax benefits available to you.
- No Goods and Service Tax shall be applicable on Individual life insurance products as per prevailing laws. Tax laws are subject to amendments from time to time. If any imposition (tax or otherwise) is levied by any statutory or administrative body under the Policy, Tata AIA Life Insurance Company Limited reserves the right to claim the same from the Policyholder.
- This product is underwritten by Tata AIA Life Insurance Company Ltd.
- The plan is not a guaranteed issuance plan, and it will be subject to company’s underwriting and acceptance.
- Insurance cover is available under this product.
- For more details on risk factors, terms and conditions please read sales brochure carefully before concluding a sale. The precise terms and condition of this plan are specified in the Policy Contract.
- Buying a Life Insurance Policy is a long-term commitment. An early termination of the Policy usually involves high costs, and the Surrender Value payable may be less than the all the Premiums Paid.
- In case of non-standard lives and on submission of non-standard age proof, extra premiums will be charged as per our underwriting guidelines.
- This publication is for general circulation only. This document is for information and illustrative purposes only and does not purport to any financial or investment services and do not offer or form part of any offer or recommendation. This document is not and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.
- L&C/Advt/2025/Oct/3743