Here is How the Guaranteed Maturity Benefit is Calculated

Here is How the Guaranteed Maturity Benefit is Calculated

Earning decent profits in the stock market can be quite profitable. However, one of the most certain things about stock market investments is the uncertainty they carry. While these investments can be suitable for high-risk individuals, low-risk individuals usually choose investments that offer guaranteed returns.

Of the different plans, life insurance-based saving policies with guaranteed returns are one of the most favoured. This is because these savings plans offer guaranteed returns along with insurance coverage. However, if you’re planning to purchase this savings insurance plan, you must carefully learn about the guaranteed maturity benefit.

Guaranteed Maturity Benefit Meaning

The amount that the policyholder receives on the maturity of life insurance with returns is called the maturity benefit. To obtain the maturity benefits through the plan, you will have to ensure the savings insurance plan stays active until the maturity date.

Once the policy reaches maturity, the insurance company will offer you the guaranteed benefits of the life insurance plan along with the maturity sum. The guaranteed life insurance benefits will include the total return of premiums you have paid and some additional benefits.

These benefits are offered as bonuses by your insurer. So, while purchasing a guaranteed return plan can be quite beneficial, you must learn how your guaranteed maturity benefits are calculated.

How to Calculate Guaranteed Maturity Benefits on Your Guaranteed Return Plan?

Individuals who have purchased the life insurance policy with the maturity benefit generally find it difficult to calculate the benefits they can earn through the investment. However, if you’ve purchased the guaranteed return insurance plan, you can follow a few simple steps to calculate the maturity benefits you are liable to earn through the plan.

The steps to calculate maturity benefits with guaranteed return insurance plans are:

  1. Read the policy document: You must read through the policy document and learn about the terms and conditions associated with the plan to calculate the maturity benefits. Once you have read the policy document carefully, you must make a table with the columns- Year, Premium, Charges, Final amount, Interest, Balance.

Premium amount is the amount you pay your insurer. The charges are the funds deducted by your insurer. After removing the charges, the remaining funds are the final amount on which the interest is charged, and the balance is the amount that is added to your account annually.

  1. Maturity benefits calculation: Charges will keep fluctuating throughout the tenure of your plan. Therefore, they will be different as the years’ pass. All the charges must be deducted from the amount and the premium. Once the deductions are made, you must add the interest and bonuses you have received. First, however, you must determine the base amount primarily.
  1. Repeat this step: You must repeat these calculations every year until the policy reaches maturity. However, the years should be added carefully to the final amount. For example, if the policy will mature in ten years, the balance column value when the year column reaches ten will be the maturity benefits. To get an estimate on the net returns, you must subtract all the premiums you have paid from the maturity benefit amount.
  2. Variable profits: At certain times, there are certain variable additions to the amount. Most insurers like Tata AIA offer loyalty bonuses to the customers with the Tata AIA policy. The interest and the bonus amounts are assured payments, but the variable profits are not like them, as they cannot be predicted. Therefore, you must not consider them when calculating the maturity amount. You must only consider the guaranteed amount when calculating the long-term investment.

To claim your plan's benefits reaching maturity, you will have to fill out some important forms. The funds can also be paid before the maturity date of the plan if you face an emergency and need your guaranteed benefit. Usually, the insurance companies settle the claim before the maturity date.


While guaranteed return plans can be helpful for wealth creation, you must learn about the profits you are liable to earn through the plan. You can estimate the amount you can get through the guaranteed plan using a few parameters like the premium amount, charges, investment tenure, etc. Calculating the amount in advance will help you adequately prepare your finances.