Life insurance is usually seen as a safety net for our loved ones in case something unexpected happens. But some life insurance plans also reward you for simply living through the policy period. This is where the survival benefit comes in. It’s one of the main features that make certain types of policies attractive for people who want both protection and financial returns. In this blog, learn everything you need to know about survival benefits, what it is, how it works, its advantages and drawbacks, and why it might matter to you.
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What is Survival Benefit in Life Insurance?
A survival benefit is a payment made by the insurer to the policyholder if they survive beyond a specific period of the policy period. Unlike the death benefit, which is paid to the nominee upon the policyholder’s death, the survival benefit goes directly to the insured person while they are alive.
These benefits are commonly found in money-back plans and certain endowment policies, where payments are made at regular intervals during the policy period rather than as a lump sum at the end.
The policyholder needs to keep the policy active by paying premiums regularly.
In money-back policies, at pre-decided intervals (for example, every 5 years), a percentage of the sum assured is paid to you if you survive those specific milestones.
The insurer then reviews your policy details and calculates the survival benefit you’re entitled to at that stage.
The survival benefit amount is credited to the policyholder’s registered bank account, or paid through the chosen method.
Even after receiving the payout, the life cover stays active until the policy term ends.
The same process happens again at the next survival milestones until maturity.
Imagine you take a life insurance policy for 20 years with a cover of ₹10 lakhs. Instead of waiting till the very end, the policy gives you money back at regular intervals:
Now, if something happens to you during these 20 years, your family will still receive the full ₹10 lakhs as the death benefit, regardless of how much you’ve already received as survival benefits.
It’s easy to confuse survival benefits with maturity benefits as they sound similar. Let's look at a quick comparison between the two.
| Feature | Survival benefit | Maturity benefit |
| Meaning | Periodic payments made to the policyholder at set intervals during the policy period | Lump sum amount paid to the policyholder at the end of the policy, given they survive the policy period. |
| Timing | Paid at specific milestones, for example, 5th, 10th, 15th year | Paid at once, at the end of the policy period |
| Purpose | Provides liquidity during the policy term for expenses like education, medical needs, or milestones. | Provides a large fund at the end for long-term goals like retirement or wealth creation. |
| Policy type | Common in money-back and some endowment plans. | Available in most traditional life insurance and endowment policies. |
| Impact | Life cover continues even after receiving survival benefits. | Life cover usually ends once the maturity benefit is paid. |
| Payment amount | A percentage of the sum assured at intervals. | Remaining sum assured + bonuses (if applicable). |
Instead of waiting until the end, you receive funds at regular intervals, which can be used for goals like children’s education, home renovation, or medical expenses.
You stay insured while also receiving money during your lifetime.
The payouts can act as supplementary income at critical stages of life.
Getting regular payments keeps you connected to your policy and makes you less likely to give it up early
You know that even if something happens to you, your family still gets the death benefit from the policy.
Survival benefit policies are checked and approved by IRDAI (the insurance regulator). This means you can trust that they follow the rules, protect customers, and make payouts on time.
A survival benefit can be helpful, but it also comes with a few drawbacks you should be aware of:
The returns you get are usually less than what market-linked options like mutual funds or stocks might offer.
The money comes at fixed times. You don’t get to choose when you’ll receive it, even if your needs change later.
Policies that have survival benefits usually come with higher premiums than simple term insurance (no payouts if you survive).
The survival benefit is a feature in some life insurance plans that gives you payouts at different points during the policy if you’re still around. It’s like getting two advantages in one; your family stays protected, and you also get some money back along the way. The returns may not be as high as investments like mutual funds, but what you do get is steady support, predictability, and immense peace of mind.
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Reviewed by Vaibhav Kumar Kaushik 
Acko Technology & Services Private Limited
#36/5, Hustlehub One East, Somasandrapalya, 27th Main Rd, Sector 2, HSR Layout, Bengaluru, Karnataka 560102
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