A survival benefit in Life Insurance is a payout made to the policyholder when the conditions specified in the policy are met and the life insured survives to the relevant payout date. Depending on the policy, this amount may be paid at intervals during the policy term or at a specified stage after the premium-paying period. Understanding how these payouts work can help you plan for future expenses, compare Life Insurance savings options and distinguish survival benefits from maturity benefits and bonuses.
How can survival benefits in Life Insurance help you?
Survival benefits can help you meet planned expenses at different stages of life without having to wait until your life insurance policy matures. You can use the survival benefit to:
- Fund your child’s education
- Manage wedding expenses
- Renovate your home
- Repay a Loan
- Supplement your regular income
What should you check in a Life Insurance Policy that offers survival benefits?
Survival benefits vary across Life Insurance Policies. Before choosing a plan, check:
- When will you receive the payouts? Check the policy years in which survival benefits begin, how often they are paid and whether you can choose the payout frequency.
- How much will you receive? Review the benefit illustration to understand the payout amount and whether it is guaranteed or includes bonuses that may vary.
- Do you need to keep paying premiums? Check the premium payment term and whether premiums are still due when survival benefits begin.
- What happens if you die during the policy term? Understand the death benefit payable to your nominee and whether previous survival payouts affect it.
- What do you receive at maturity? Check whether a separate maturity benefit is payable in addition to any survival benefits already received.
What is the difference between survival benefits and maturity benefits?
The terms are not interchangeable. Some policies offer both types of benefits, while others may offer only one or neither. Here are some main points of difference between maturity benefit and survival benefit:
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Feature
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Survival benefit
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Maturity benefit
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When is it paid?
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At specified intervals or milestones, as set out in the policy
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At the end of the policy term
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Purpose
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Can help meet expenses at planned stages
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Can help meet a financial goal at the end of the policy term
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Amount
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Depends on the policy's payout schedule
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Depends on the policy's maturity-benefit structure
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Does the policy continue?
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Often continues, subject to the policy terms
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The policy generally ends after the maturity benefit is paid
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Is a bonus included?
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Only if applicable under the policy
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May include eligible bonuses or other benefits, depending on the policy
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Which types of Life Insurance Policies offer survival benefits?
Survival benefits are available only under policies that specifically provide for them. Common examples include:
- Moneyback Policies: These may pay a specified portion of the sum assured at predetermined intervals, with other benefits payable according to the policy terms.
- Savings Life Insurance Plans: Some plans provide regular income or other payouts at defined stages.
- Some Term Insurance options: Some Term Plans have specific survival-benefit or return-of-premium options. Standard term insurance does not necessarily return premiums or pay a survival benefit.
- Group Insurance for employees: Benefits depend on the particular group policy and its terms. Do not assume that group cover offers the same survival benefits as an individual money-back policy.
If you are exploring a money-back life insurance policy, review the payout schedule, life cover, premium commitments, and maturity provisions together.
How do bonuses affect survival benefits?
Some Participating Life Plans may offer bonuses in addition to the benefits specified under the policy, which may increase the total amount you receive, depending on the policy terms and the type of bonus declared. The bonus amount and how it is paid depend on the insurer's bonus declaration, the policy type and its terms. Bonuses are not automatically guaranteed, and rates may vary across products and policy years.
A declared bonus may also be subject to specific conditions before it becomes payable. For an existing ABSLI Policy, refer to the survival benefit rates and policy documents.
How do Life Insurance survival benefits compare with other savings options?
A Life Policy with survival benefits combines life cover with payouts during the policy term. Other savings and investment options may focus on building savings, earning interest or growing wealth over time. Here is how the main options differ:
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What to compare
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Life Insurance with survival benefits
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Other savings and investment options
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Primary purpose
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Combines life cover with policy-defined payouts
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May focus on saving, earning interest or growing wealth
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When you receive money
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At specified intervals, as defined by the policy
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Depends on the product, deposit terms or investment performance
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Predictability of benefits
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Benefits may be guaranteed, variable or a combination, depending on the policy
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Interest may be fixed or variable. Market-linked returns fluctuate
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Life cover
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Provides life cover as specified in the policy
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Usually does not provide life cover unless insurance is included separately
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Access to money
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Early exit may affect the amount received and is subject to policy conditions
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Withdrawals, lock-ins, and penalties vary by product
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Potential growth
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Depending on the policy's guaranteed benefits, bonuses, if applicable, and premium outlay
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Depending on the interest rate or investment performance and applicable charges
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How does GST apply to Life Insurance premiums in 2026?
From 22 September 2025, GST on Individual Life Policies was reduced from 18% to 0%. However, Group Life Plans, including employer-provided group cover, continue to attract 18% GST under the current guidance from the Department of Financial Services. Before paying your premium, check:
- Your policy type: The GST treatment differs for Individual and Group Life Plans.
- Your premium notice: Check the GST amount, if any, shown on your premium notice.
- NRI policies: If you are an NRI, the policy may qualify as an export of services under GST law if it meets the required conditions. Otherwise, it may be treated as an exempt service.
How does the Income Tax Act, 2025 affect survival benefits in 2026?
Under Income Tax Act, 2025 effective from 1st April 2026, survival-benefit payouts may be tax-exempt if the life insurance policy meets the applicable conditions. However, not all survival benefits are automatically tax-free and depend on factors such as when the policy was issued, the premiums payable and the type of policy. For certain policies, exemption limits apply based on the annual premium and its relationship to the sum assured. For the exact tax treatment of your policy, refer to the policy documents and consult a qualified tax professional.
How can you receive and manage survival benefits digitally?
Digital policy servicing can make it easier to track and manage benefits. For an existing policy, check whether the insurer provides online access to the policy schedule, payout details, servicing forms and survival certificate submission. ABSLI provides online policy servicing through its Manage My Policy portal, including a facility to submit a survival certificate.
The documents required and process will depend on the policy and the benefit being claimed. If you live overseas or have become an NRI since buying the policy, update your residency and contact details with the insurer.
How can you choose a Life Policy with survival benefits?
- Define the purpose of the payout. Identify the future expense or financial goal you want the money to support.
- Check the payout schedule. Confirm the amount, timing, frequency, and conditions for each payment.
- Review the life cover. Understand what is payable to the nominee if the life insured dies during the policy term.
- Understand maturity benefits. Check whether a separate maturity payout is available and how it is calculated.
- Check bonuses carefully. Distinguish guaranteed benefits from bonuses that may vary.
- Compare the full cost and benefits. Review premiums, policy term, payout amounts, liquidity and tax treatment. Do not choose solely on the basis of a projected return.
- Check service and eligibility. Confirm documentation, digital servicing options and any requirements that apply to NRI policyholders.
You can explore available survival-benefit rates and use the ABSLI calculators to support your research.
October 19, 2026
5 mins
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