If death takes place during the term of the insurance policy, then the nominee receives the sum assured plus the bonus, if any.
If the policy is a ’with bonus’ policy or ’with participative profits’, the bonus is payable for the number of years the premium has been paid, in addition to the sum assured.
 

If death takes place due to an accident, and the insured has purchased the accident benefit rider, then double the sum assured (up to a limit of Rs 500,000-10,00,000; varies by company), is receivable by the nominee.
Even if an additional term rider has been purchased, double the sum assured would be receivable by the nominee.
 

If death takes place after the policy has matured, then the nominee does not receive anything from the insurance company, unless specifically mentioned in the policy. Certain policies offer to cover the insured for the sum assured or a part of the sum assured, even after the policy has matured. (The insurance company would mention such details in the brochure and the policy.)
 

What do I get if I survive the term of the policy?
If you have purchased a term policy, you may not receive any money from the insurance company upon maturity. However, some companies offer a term policy with return of premium or the sum assured upon maturity.

For policies that offer bonus or profits upon surviving the term of the policy, you would receive the sum assured along with the accumulated bonus (if you have a with bonus policy) for the term of the policy. For example, if you have insured yourself for 25 years you will receive the sum assured plus the accumulated bonus for 25 years.
 

Will my family receive the insurance amount immediately after my death?
Usually the proceeds of the insurance policy are made available to the nominee in a period of 3 months; provided all the relevant paperwork has been done. If you have purchased a policy for your child, then please verify the details of the policy. Few children’s policies offer no money to the nominee upon the death of the proposer or the parent.
 

How do I collect the maturity amount from the insurance company?
Usually, insurance companies send information regarding the maturity of the policy in advance, along with the forms to be filled and the documents to be sent. If the required documents are sent duly completed and signed, the payment is sent by post or in certain cases, even directly credited to your bank account.
 

What are the Tax benefits applicable to me if I invest in a Life Insurance Policy?
Guaranteed savings or bonus
Some insurance policies guarantee the amount of money that you would receive upon maturity or the minimum amount that you would receive upon maturity.

Usually, this amount is a proportion of the sum assured such as a bonus or a guaranteed addition of say Rs 70 per Rs 1,000 of the sum assured. This means if you have an insurance policy for a sum assured of Rs 100,000 then you earn a bonus of Rs 7,000 each year on the sum assured.

Other policies may offer you a guaranteed bonus as a percentage such as a guaranteed addition of 3.5% per annum on a compounded basis. This means you earn Rs 3,500 on a sum assured of Rs 100,000 in the first year while in the second year you earn Rs 3,623 (3.5% of Rs 103,500). Some companies also offer unit-linked policies.