Difference Between Maturity Benefit and Death Benefit Explained

What is Maturity Benefit?

What Is a Death Benefit?

What are the Differences Between Maturity Benefits and Death Benefits?

The 5 main differences between maturity benefit vs death benefit are:

Parameter Maturity Benefit Death Benefit
Trigger Event It is paid after the maturity of an insurance policy. It is paid after the death of the insured person.
Who receives it A maturity benefit is receivable by the insured person. A death benefit is receivable by the beneficiary chosen by the insured person.
Mode of pay out It might be paid out in lump sum or regular payouts, as mentioned in terms of a policy. It is usually paid out to the beneficiary in a lump sum.
Applicability of bonuses Bonuses applicable No bonuses
Purpose Typically used for long term financial goals, retirement, or wealth accumulation Death benefit’s primary purpose if to provide immediate financial support to the dependent family in case of the policyholder’s death. 
Policy Continuation The policy terminates after the maturity benefit is paid The policy, in certain kinds of plans as in child plans, may continue after the payment of death benefit. 

Now that you know the difference between maturity benefit and death benefit, you can choose a life insurance policy that best suits your financial needs. It is evident that maturity benefits are paid after a policy's maturity, while death benefits are paid to a beneficiary after the demise of an insured person. While term plans provide only death benefit, other life insurance policies come with both these benefits, which are useful and user-friendly. 

Frequently Asked Questions

What is the Difference Between a Death Claim and a Maturity Claim? up-arrow

A death claim is an amount a beneficiary claims from an insurance company upon the policyholder’s unforeseen demise. On the contrary, a maturity claim is an amount that a policyholder claims from an insurance company after a policy’s maturity.

What Happens After the Maturity of an Insurance Policy? up-arrow

After an insurance policy matures, the insurance provider will verify your information and send the maturity benefit to your bank account. Most insurers send a policy release form at least a month before the maturity of an insurance policy. This form will need the signature of two witnesses before any further procedure. 

What is the Tax Deduction Available on Insurance Premiums? up-arrow

The premium paid towards a life insurance policy is eligible for tax deduction under Section 80C and the payouts are tax free under section 10(10D). However, the tax benefits are governed by the prevailing tax laws.