This is a fixed term policy. The premium has to be paid upto 20 years or till the death of the policy holder whichever is earlier. A part of sum assured is paid to the policy holder once in 5 years. This benefit is called survival benefit. It is very important to note that the life risk cover continues for the full sum assured even after payment of survival benefits to the policy holder. Also, the bonus is given on full sum assured. On the death of the policy holder before the term of the policy, the “Sum Assured on Death” along with accumulated bonus and final additional bonus (if any) is paid to the nominee. On the other hand if the policy holder survives till the end of the term the amount of survival benefits already paid to him will be deducted from the maturity value. i.e. (S.A + Bonus + FAB – Survival Benefit).
Under this policy, apart from the life risk cover, the money becomes available at regular intervals. The amount may be used for short term financial needs like, purchase of household durables or for children’s education. Or the amount received as survival benefit can be re-invested in any secured investment so that the policyholder will have a substantial lump sum amount at the end of the term of the policy.