RESUME APPLICATION PAY PREMIUM
Fund Performance

Fund Performance

Knowledge Center

Knowledge Center

About Us

About Us

Tools and Calculators

Tools & Calculators

Quick links

Mobile (Download app)
  • Webpages
  • Documents
  • HDFC Life ClassicAssure PlusInvestment
  • HDFC Life ClassicAssure PlusInvestment
  • HDFC Life ClassicAssure PlusInvestment

For NRI Customers

(To Buy a Policy)

(If you're our existing customer)

For Online Policy Purchase

(New and Ongoing Applications)

Branch Locator

For Existing Customers

(Issued Policy)

Fund Performance Check

RESUME APPLICATION PAY PREMIUM

What do you want to do?

Quick links

Mobile (Download app)

Download HDFC Life App

Buy plans, track your policy, make renewal payments & monitor fund performance with HDFC Life App, Download Now!

Apple Logo Go to Google Play Store

What Will Happen When a Term Life Insurance Policy Matures?

down-arrow
What Will Happen When a Term Life Insurance Policy Matures?
July 22, 2022

Table of Content

 

Term insurance plans are known for offering high sum assured amounts at pocket-friendly premiums. When people start earning, they choose term policies as they are one of the most attractive and affordable insurance plans available in the market. Unfortunately, term policies do not offer additional maturity benefits. These policies come with an expiry or maturity date. If the policyholder outlives the tenure, they do not receive a large payout or bonus. If you have a term plan, do not despair.

Let’s look at what you could do if your term insurance policy is about to mature:

Renew the Policy

You may have bought a 30-year term plan when you were in your early 20s to help your parents pay off some outstanding debt. Over time, you got married and started a family of your own. You now have even more financial responsibilities than before and would like to keep your policy going for longer. You can opt to renew the policy and extend the period. If you choose this, you will likely have to pay a higher premium since you are older and perhaps not in the same health condition as when you bought the initial plan.

Opt for Return of Premiums

To make these policies more beneficial for policyholders, insurance companies now offer term plans with maturity benefits. The maturity benefit generally refers to the return of all premiums paid by the insured. Some insurance companies may also provide a nominal bonus amount, which could be the interest accrued over the years, while others will deduct a processing fee before returning the premium amount. By choosing a term plan with maturity benefits, you ensure that your premiums are not ‘wasted’ in case you outlive the policy.

Convert the Policy

Your third and final option is to convert your term plan into a whole life insurance policy. Plan conversions are slightly complicated as compared to the other two options. Most insurance companies have limitations on which policies can get converted and which can’t. They may require you to undergo a medical exam or back-pay the premium difference to become eligible for whole life cover.

When individuals purchase a term policy, they should always opt for term plans with maturity benefits. Although the return of premium option cannot be used as a financial tool to build a corpus for the future, it does safeguard your finances. The premium amounts you pay over the policy tenure could amount to a decent sum. Even an individual who pays INR 6,000 per year for 30 years will get a return of premium amount upwards of INR 1,50,000. The amount can then be reinvested to help them in their golden years.

The main idea of a term plan is to provide life coverage when the policyholder needs it most. The policy offers financial security to their family members in case anything happens to them. If the policyholder survives the tenure, they can choose to renew their policy, convert it, or simply receive the maturity amount to enhance their finances.

ARN - ED/06/22/29566

Related Articles

Term Plan Articles Term Plan Articles

Investment Articles Investment Articles

Savings Articles Savings Articles

Life Insurance Articles Life Insurance Articles

Tax Articles Tax Articles

Retirement Articles Retirement Articles

ULIP Articles ULIP Articles

Health Plans Articles Health Plans Articles

Child Plans Articles Child Plans Articles

Popular Calculators Popular Calculators

Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

LinkedIn profile
Author Profile Written By:
Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

LinkedIn profile
Reviewed By Reviewed By:

Here's all you should know about life insurance.

We help you to make informed insurance decisions for a lifetime.

Who is the Insurer and Insured?

Who is the Insurer and Insured?

The essentials of insurance, including the roles of the insurer and insured, in this comprehensive guide. Learn how these relationships shape your financial security.

What Is Insurance?

Blue Chip Fund

Diversified Equity Mutual Funds

Diversified Equity Fund diversifies the investments across the stock market in a bid to maximize gains for investors. Click here to know meaning & benefits of diversified equity fund.

Diversified Equity Mutual Funds
Being Your Own Boss In a New World Previous
Securing family wealth and aspirations in the new normal Next
HDFC life
HDFC life

HDFC Life

Reviewed by Life Insurance Experts

HDFC LIFE IS A TRUSTED LIFE INSURANCE PARTNER

We at HDFC Life are committed to offer innovative products and services that enable individuals live a ‘Life of Pride’. For over two decades we have been providing life insurance plans - protection, pension, savings, investment, annuity and health.

Popular Search

Popular Searches