Everything you wanted to know about the survival benefit


A call from an insurance agent left Prakash with unanswered questions regarding survivor benefits. He put them to his trusted financial advisor, Sangeetha.

Prakash: An agent called me about a children’s insurance plan. During the presentation of the product, he mentioned that the survivor’s allowance will be paid in the form of a certain percentage of the sum insured. Shouldn’t the survival benefit be greater?

Sangeetha: The survivor benefit is similar to the maturity benefit. In plans that provide survivor benefits, this is a risk-free amount usually paid as part of the sum insured at regular intervals. Typically 20-30 percent.

Prakash: OK. So the survival advantage and the maturity advantage are two different things?

Sangeetha: Yes. Some people use the two terms interchangeably, adding to the confusion. The maturity benefit is paid to the policyholder at the end of the policy term, when the policy expires. In the event of a survival benefit, payment is made at the end of the premium payment term. There are many policies that have a term of 20 years, but the premium payment is 15 years. In these cases, the survivor’s benefit can be paid after 15 years in installments, and not after 20 years.

Prakash: Which policies offer survival benefits?

Sangeetha: Savings plans can offer survival benefits, but not all of them. It depends on the specific plan.

Prakash: OK. The agent offered a reimbursement policy that paid out survivors’ benefits at regular intervals.

Sangeetha: The repayment is a savings plan. Typically, payments begin after the premium payment period ends and continue at regular intervals for a specific period.

Prakash: So, can I postpone the survivor’s allowance?

Sangeetha: Some fonts offer this option. In this case, the policyholder can obtain an increased survival benefit, i.e. an initial deferred survival benefit as well as interest. If the increased survivor’s benefit is not received by the policyholder during the term of the policy, it is paid later at the same time as the maturity benefit.

Prakash: My friend said that there is a policy that pays 103%. 100 of the premium as a survivor’s benefit. Is it possible?

Sangeetha: I know what you’re talking about. But that’s not 103 percent of all premiums paid. This is 103 percent of an annual premium as a survivor benefit!

Prakash: Intelligent use of words! An amount of tax on the survivor’s allowance received?

Sangeetha: Like the maturity benefit, the survivor benefit is exempt from income tax under Article 10 (10D).

Prakash: Costs. Now that I know how Survival Perks work, I’ll keep an eye out for this feature.


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