With the level of uncertainty in today’s world, insurance plans have become the most basic investments one can buy. But an insurance plan doesn’t only protect you and your loved ones from uncertainty, it can also be an investment that helps keep, save and grow your money – if it has a maturity term benefit.
Insurance companies now offer a wide range of financial tools which avail you the options to carefully plan your financial future with more assurance. The most interesting option in today’s insurance marketplace is the term insurance plan with maturity benefits, which is an insurance policy plan that can also be an investment avenue, saving avenue, or both, providing the much needed financial cover that suits your needs.
For example, the traditional life insurance plan only provides an indemnity or death cover which means you or your next-of-kin receive a pay-out only when you die or something untoward happens to you. The life insurance plan with maturity benefits is different because while the traditional life insurance policy only provides death cover without any term related benefits, a term insurance plan with maturity benefits would ensure you receive a pay-out at a stated time (the end of the term) even if you are still alive and have suffered no loss.
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WHAT IS A TERM INSURANCE PLAN WITH MATURITY BENEFITS?
In insurance, a maturity term benefit is a whole-sum an insurance company pays you when the lifespan of your insurance plan expires. For example, if your insurance policy is for a period of five years, you, the insured, will get a pay-out after these five years. The sum paid to you will include the premium payments you made through the years and the bonuses you are entitled to as part of your maturity term benefits. Nonetheless, this is only due if you have paid all premiums, the time period has elapsed and other agreement conditions are met.
A maturity benefit policy may also include death-risk options, which means in event of death during the policy term, your next of kin or your family gets the pay-out. This is both a foundational and a secure investment.
An insurance plan with maturity benefits may include the following:
- An assurance of payment of the basic sum
- Accrued guaranteed additions and other bonuses
- Terminal bonus (if applicable)
A policy holder who wants a maturity benefit in his plan may opt for a term return of premium plan, also known as a TROP plan. A term return of premium plan pays back the full premium at maturity and offers all the accruing benefit of a traditional life plan! A TROP plan is fully assured to provide maturity benefits, if the policy holder survives through the policy term.
Other maturity term benefit plans include:
- Health insurance plan with maturity benefits: Most insurance options with maturity benefits are in life insurance, but the health insurance plan with maturity benefits policy is the same with the life insurance plan with maturity benefits, the only difference being that it’s about your health.
- Unit linked insurance plans: This plan gives you the benefit of and investment and an insurance. A fraction of the premium is invested in financial products that provide you with both an investment benefit and an insurance cover. Although it carries with it a higher risk than a traditional insurance plans and may include some associated charges, it is a smart way to kill two proverbial birds with one stone.
- Endowment plans: with the same basic feature as the Unit linked insurance plan, the endowment plans funds are usually invested into very low risk investments such as a debt fund as a result the returns are not too high.
These plans give the policy holder an efficient money management platform in today’s world of economic constraints and financial adversity. They provide equity exposure that puts that extra ‘0’ on your net, growing your wealth at a much higher rate of return. They also provide the option for partial withdrawals of money in time of constraining financial obligations or emergencies.
ADVANTAGES OF AN INSURANCE PLAN WITH MATURITY BENEFITS
The maturity benefits insurance plan offers you full insurance cover of the plan itself, a repayment of premium at expiration of time, and other financial benefits. For example, in a life insurance plan with maturity benefits, you have a death-risk cover plus other benefits, or in a health insurance plan with maturity benefits, you have a health cover which gives you the rest of mind you sorely need and full repayment of premium at a certain time if you don’t get sick enough to activate the policy.
Another point to note is that at the expiration of the term, your premium is assured, which makes the maturity benefit insurance policy like a savings plan for the diligent investor. This is in contrast with the traditional insurance plan which does not have maturity benefits.
In some countries, the extra income gotten from a maturity benefit insurance plan is tax free, although you have to contact your accountant, legal advisers and other professionals for the tax code of your geographical location.
A life insurance plan with maturity benefits will normally also offer additional riders in cases of critical illness, and disability riders which offer that much-needed financial release at such times of pressing financial need.
When you opt for an insurance plan with maturity benefits, you can create a policy that suits your needs and allows you a great deal of financial flexibility.
An insurance plan with maturity benefits comes at affordable premium rates.
INSURANCE AND YOU
An insurance policy is important, first for the cover it provides, and that should always dominate the thoughts of the policy buyer when considering an insurance plan. Hence, your choice or preferences whilst choosing your insurance plan should be guided by the cover you need, not greed.
Most insurance plans with maturity benefits invest your money in financial products, such as the stock and capital markets, and may charge certain fees which can be reflected in higher premiums. These plans also deduct mortality and other charges and return only the amount that remains to the policy holder on maturity.
Insurance today can be more than just a safety net – it is a financial model that can serve as a springboard to meeting your financial goals when you are at risk of hitting the hard ground from a freefall. So, is your insurance plan a safety net or a springboard? Only your financial plan can solve that puzzle, but make sure its first a strong safety net for you. Get an insurance plan with maturity benefits today.