insurance

Survival Benefit

A feature in some life insurance policies that pays out a portion of the death benefit while the insured is still alive, typically after reaching a specified age or surviving a certain period. This benefit is designed to provide financial support during the policyholder's lifetime.

Example

“Maria's endowment policy includes a survival benefit that will pay her $50,000 when she reaches age 65, regardless of whether she's still alive at that time.”

Memory Tip

Survival benefit = 'Surviving pays' - you get money for staying alive to a certain age or time.

Why It Matters

Survival benefits provide financial security during your lifetime rather than only benefiting your heirs after death. This feature can help fund retirement or other major life expenses, making life insurance more valuable to the policyholder personally.

Common Misconception

Many people think survival benefits are the same as cash surrender values or that they're available in all life insurance policies. In reality, survival benefits are specific contractual payments available only in certain policy types like endowments, and receiving them may reduce the death benefit.

In Practice

A 30-year endowment policy with a $100,000 face amount might pay a $100,000 survival benefit if you're alive at the end of 30 years, or the same $100,000 as a death benefit if you die during the 30-year term. If you receive the survival benefit, your beneficiaries would receive nothing, as the contract is fulfilled.

Etymology

From Latin 'supervivere' meaning 'to live beyond' combined with 'benefit' from Latin 'benefactum' meaning 'good deed,' referring to the good received for surviving to a certain point.

Common Misspellings

survial benefitsurvival benfitsurvivol benefitsurvival benifit

More in insurance

Other insurance terms you should know

deductibleThe amount you pay out-of-pocket before your insurance begin…insurance premiumThe amount paid periodically to an insurance company in exch…deductibleThe amount a policyholder must pay out of pocket before insu…copayA fixed amount paid by an insured person at the time of a me…coinsuranceA cost-sharing arrangement where the insured pays a percenta…out-of-pocket maximumThe most an insured person will pay for covered healthcare s…