Life insurance’s purpose is to provide payouts to the beneficiary of the applicant in case of death. This payout will help the bereaved family to forget about the financial burden and the loss of income. However, sometimes, for term life insurance, the insured person might outlive the insurance term itself. When this case happens, the applicant might be able to claim maturity benefit.
As maturity benefit is a little-known clause within an insurance policy, the process of claiming one can be tricky. If you are unsure about how to claim the maturity benefits, this article will provide you with a brief overview of the process.
What exactly are maturity benefits?
Maturity benefits are the sums of money that confirm the policy has matured. In layman’s terms, this means that you have outlasted the period defined in your term life insurance contract with the company. To be eligible to claim the maturity benefits, you must complete all terms of the agreement. You must also have continually paid the premiums to be eligible.
How big maturity benefits can get?
How big your maturity benefits can get will depend on the premium you pay in the initial stages. As the years go by, this amount will gradually go up, usually every year. The added amount will be defined in the contract between the customer and the insurance company beforehand. At the end of the policy’s term, the customer will receive a bonus on top of the accumulated benefits over the year. For this reason, the maturity benefits will be larger than the total sum of premiums you have paid over the years.
How to claim maturity benefits?
Claiming your maturity benefits will involve quite some paperwork. It begins when your term life insurance expires. Here are the usual steps:
– The insurance company will send a policy discharge form which signifies the end of the life insurance term. Usually, there are instructions attached and the policy discharge form to help you know which documents to fill.
– You will have to fill out the form and include the following documents: the original policy document, proof of your identity, address, a bank mandate form with bank details, and a canceled cheque leaf.
– Do keep in mind that you need two other witnesses who sign the document along with you for the document to be valid.
– You should deliver the form and the documents to the insurance company within 5-7 days before the end date of the insurance term.
– The insurance company will process the form and will let you know the result as soon as the process is completed. Once done, the policyholder will receive the money through money transfers.
– In the rare case that the policyholder dies when the form is being processed, the form could still be approved as usual. The amount will go to the legal heirs of the policyholder.
Maturity benefits are a helpful sum of money that will help you get through tough times, and the bonus is always excellent! If you have more questions about maturity benefits, we are always ready to help! Don’t hesitate to contact us right away for information.