If you have survived your life insurance policy tenure and have paid your premiums on time then you are entitled to receive a maturity benefit. However, note that not all life plans offer maturity benefits. Most term plans do not have any maturity benefits.
Maturity benefits is sum assured + bonuses declared for the policy years + final additional bonus if any. On the other hand if the policyholder couldn’t make it till the end of the policy then the nominee will receive a sum assured amount as the death benefit.
Example on how to calculate maturity benefit
Sum Assured = Rs. 5 Lakhs
Policy term = 20 years.
Mr.X survives till the end of the policy tenure then he is eligible to receive the maturity benefits if he had paid his premiums on time.
Simple Reversionary Bonus declared every year = Rs. 45 per 1000 Sum Assured. That is a bonus of 45 x (5,00,000/1,000) = Rs. 22,500 every year. Please note that there is no guarantee on bonus rates. It could be higher or lower every year.
Final Addition Bonus = Rs. 20 per 1000 Sum Assured. So a Final Addition Bonus of 20 x (5,00,000/1,000) = Rs. 10,000 when the policy ends.
The sum assured of Rs. 5 Lakhs with the simple reversionary bonuses and any final bonus declared by the company would be paid.
Mr.X gets - sum assured + bonuses declared for 20 years + final additional bonus if any. That is the calculation of the Maturity Amount of Rs. 5,00,000 + (Rs. 22,500 x 20) + Rs. 10,000 = Rs. 9,60,000.