What happens if you outlive 20 years of term life insurance?


Buying term insurance is like owning an investment for certain years that will provide you and your loved ones with a secure and guaranteed financial cushion at various stages of life. 

For instance, Shyam was 22-years-old when he bought the ABSLI DigiShield plan. Today, he is 43 years old and surpassed his term life insurance. Now what?

This blog will talk about,

  • What is term insurance?
  • Positives and negatives of having term insurance?
  • What happens when you outlive the selected term plan?
  • ABSLI DigiShield Plan
  • ABSLI Life Shield plan

What is Term Insurance? 

Term insurance is one of India’s most popular and purchased types of life insurance. As the name suggests, a term insurance plan is purchased for a specific set of years, such as 10, 20, 40, or more, based on your need and coverage requirement. It is a pure life insurance plan instead of other life insurance plans that include a savings aspect. 

Term insurance is less expensive than other life insurances because they do not provide the life insured with maturity benefit (the money paid by the insurance company to the life insured when they complete the term plan). It is why it is less in price compared to others.

When one purchases term insurance for a larger cover, it shows how much their family means to them because term insurance is an act of selflessness as they come with certain benefits and death benefit. Here, the insured might enjoy a few leverages given by the term plan but the collective monetary is kept aside just for their family. 

Pros and Cons of Term Insurance

Every coin has two sides. Similarly, owning term insurance has both advantages and disadvantages. They are as follows:

Advantages Disadvantages
Provides Economic Security: One of the primary reasons one opts for insurance is to have safe economic security for their family and themselves. When the life insured meets with an unfortunate death, term insurance shall always have their back in mending their basic needs without compromising their dreams and lifestyle.  Not for the ill and old ones: For instance, if the life insured is sick or elderly, their premium rate will be higher than the young ones. It is why financial advisors always say that one should buy a term plan at a young age because there is a lesser danger of mortality and other chronic illness.
Tax Advantage: Who would not wish to save taxes? One of the best benefits of owning insurance is living a tax-free life because premiums paid for a term insurance plan are lower and turn out to be eligible for a tax deduction tag under Section 80 C of the Income Tax Act (1961). Zero End Term Benefits: Like every other life insurance, a term insurance plan also provides the beneficiary with death benefits if the life insured meets with death when the term plan is active. However, if the life insured manages to sail through the term plan, they are not given any maturity or survival benefit. 
Adaptability: Term insurance policies enable greater flexibility as you can increase the coverage of the term plan based on your requirements. The life insured can add in their other benefits without undergoing any medical checkup. The policyholder has the liberty to convert the term plan into an endowment plan with the increased premium sum compared to the current sum assured. It is why term insurances are tagged as a flexible plan. There is no sum assured element associated with a term insurance policy. In the case of a pure term policy, the life insured will not get any returns or cash rewards if they survive the plan. And, if the insured survives, the insurance provider will retain the entire paid premium.
Cost-effective: A term insurance plan is one of India’s most preferred plans as it is more affordable than other types of life insurance. It is cost-efficient as the policyholder can obtain substantial life coverage at a lower premium. Just FYI, the premium paid by the life insured in term insurance is six times less than the premium they might pay for any other insurance. 


What happens after 20-years are up?

As we were discussing in the introduction,

‘Shyam was 22-years-old when he bought the ABSLI DigiShield plan. Today, he is 43 years old and surpassed his term life insurance. Now what?’

As he managed to survive the whole term plan by paying the premiums timely, he shall not avail any maturity benefit from this because under this comprehensive plan, he chose 

Plan Option 1: Level Cover Option: Under this selected plan, when the life insured meets with death, the beneficiary/nominee shall receive an total amount equivalent to the sum assured on death in lump-sum

If he had passed away, his nominee would have received the death benefit, but now as he managed to surpass the term plan, he would be left empty-handed without availing any help from the plan because he didn’t opt for Option 10 of the ABSLI Digishield plan that says,

Plan Option 10: Return of Premium (ROP): Here, the maturity benefit shall be paid to the life insured if they sail through the term plan. However, if the policyholder meets with death then the death benefit shall be paid to the beneficiary/nominee. 

Under the entire insurance plan, none shall be served with maturity benefit. Still, if Shyam had chosen this option then, Total Premiums Paid, less than the modal premium loadings, if there will be any, it shall be paid to the life insured towards the end of the policy term. 

Don’t jump into plans without going through every clause because there is a scope of benefit. Therefore, you should do research and understand the plan and know the benefits that you can bag.

What Is the Ideal Length of a Term Life Insurance Plan?

Term insurance plans provide long-term certainty and benefits to policyholders and their families at a low cost. Though a term insurance plan doesn’t come with a maturity or survival benefit, one should opt for it at a significantly younger age, such as in their twenties. It will help them secure different life assets without getting any medical checkups done and increase the cover-based n need. 

Duration is an essential factor to consider, but while considering the duration of the term plan, you should consider the following factors in mind to take a more responsible decision and they are,

  • Age
  • Income
  • Yearly expenditure
  • Possible emergencies
  • Gender
  • The sum assured that you opt for
  • The insurance plan and company that you are looking for

Considering all the above-mentioned factors, one must decide upon the ideal duration for their term plan.

ABSLI Life Shield Plan 

Now, it is time to undergo some of the best available term plans in the market – the ABSLI Life Shield Plan.

Aditya Birla Sun Life Insurance Life Shield Plan

This flexible plan comes with eight options, and they are as follows:

  • Option 1 – Level Term Assurance
  • Option 2 – Level Term Assurance with Waiver of Premium (WOP) Benefits
  • Option 3 – Increasing Term Assurance
  • Option 4 – Increasing Term Assurance with Waiver of Premium (WOP) Benefits
  • Option 5 – Decreasing Term Assurance
  • Option 6 – Decreasing Term Assurance with Waiver of Premium (WOP) Benefits
  • Option 7 – Return of Premium
  • Option 8 – Return of Premium with Waiver of Premium (WOP) Benefit

Some of the perks of this plan by ABSLI are as follows:

Benefit for Terminal Illness: When the life insured will be diagnosed with a terminal disease when the term is active, they are eligible to avail 50% of the relevant sum assured on death, up to a maximum of Rs. 2.5 crores would be paid immediately, and the outstanding future premiums will be canceled.

Premium Exemption: Here, upcoming premiums will be waived if the policyholder has a permanent disability or suffers from a severe illness. However, the death benefit shall remain unshaken. 

Return of Premium: If the life insured selects Options 7 or 8,  all premiums you pay will be reimbursed if you survive through the term plan.

Benefits with Nominal Cost

  • ABSLI Accidental Death and Disability Rider 
  • ABSLI Critical Illness Rider 
  • ABSLI Surgical Care Rider 
  • ABSLI Hospital Care Rider
  • ABSLI Accidental Death Benefit Rider Plus 

To have a detailed look at the plan, click – ABSLI Life Shield Plan.

ABSLI Digi Shield Plan 

Next in the row is this customizable and comprehensive plan by the ABSLI group, 

Aditya Birla Sun Life Insurance DigiShield Plan

This term plan comes with 10 options, and they are as follows:

  • Plan Option 1: Level Cover Option
  • Plan Option 2: Increasing Cover Option
  • Plan Option 3: Sum Assured Reduction Option
  • Plan Option 4: Whole Life Option (Level Cover)
  • Plan Option 5: Whole Life Option (Sum Assured Reduction Cover)
  • Plan Option 6: Income Benefit
  • Plan Option 7: Level Cover plus Income Benefit
  • Plan Option 8: Low Cover Option
  • Plan Option 9: Level Cover with Survival Benefit
  • Plan Option 10: Return of Premium (ROP)

List of the benefits mentioned under this plan are as follows:

Survival Advantage: This benefit applies to the life insured who have opted for Option 9 under the term plan. Here,   suppose the policyholder survives until the Policy anniversary occurs after the user reaches 60. In that case, a monthly Survival Benefit of 0.12% of the sum assured is paid beginning with the first Policy Month Anniversary following the event and proceeding for each Policy Month Anniversary until the life insured’s death or end of term plan.

Maturity Advantage:  If the policyholder has opted for Option 10, the Total Premiums Paid less loadings for modal charges, if any, it will be paid towards the end of term.

Terminal Illness benefit: Here, if the life insured is diagnosed with a terminal illness and falls below the age of 80, 50% of the applicable sum assured on Death, up to a maximum of Rs. 2 crores, will be paid immediately as a lump sum. And, if they pass away, the death benefit will be reduced by the amount paid in the Terminal Illness Benefit.

Riders with a nominal cost:

  • ABSLI Accidental Death and Disability Rider 
  • ABSLI Critical Illness Rider 
  • ABSLI Surgical Care Rider 
  • ABSLI Hospital Care Rider 
  • ABSLI Accidental Death Benefit Rider Plus 
  • ABSLI Waiver of Premium 

To know more about this plan, click – ABLSI DigiShield Plan.


A term plan is beneficial if taken at the right time from the right insurance provider because a term plan is cost-efficient and doesn’t come with maturity or survival leverages. Therefore, look for an insurance company that gives leverages and stands out from the crowd.