Someone might have told you that they agreed on a life insurance policy that includes a maturity benefit. The idea of this benefit sounded nice, and now you are wondering if you can use it for your car insurance deal. Before we answer that question, here is a basic overview of the maturity benefit!
What Is a Maturity Benefit?
If you sign an insurance policy, it will be valid for a specific period. During that time, you are required to pay the premiums, and the insurance company needs to honor their part of the deal by following the terms of the signed contract. A maturity benefit is a guaranteed payment of the insurance company to the policy user once the contract reaches “maturity.” This term marks that the validation period of the policy expired. For example, you’ve signed a life insurance policy for 12 years. Over those 12 years, you need to pay the premiums regularly. Once that time expires, you will be eligible for a guaranteed payout. The payment usually includes the premiums plus an added bonus.
Can a Car Insurance Policy Have a Maturity Benefit?
No, car insurance policies do not come with a maturity benefit. Instead, once the term expires, the policy will lapse. That means your rights to a claim will expire and you will need to renew the policy or sign a new one.
What Are Some Benefits Provided by a Car Insurance Policy?
While you might not have the right to a maturity benefit, there are other advantages that a car insurance policy brings. Here is what you might expect once you sign a deal.
The essential benefit of a car insurance policy is financial protection. Depending on the extent of your cover, it could include:
- Third-party bodily injury and death claim – Any injury of the persons outside of your vehicle that participated in the same road accident as you.
- Third-party property damage – If other vehicles or someone else’s property have been damaged in the road accident in which you participated.
- Theft and fire – This coverage will protect you against someone stealing your vehicle or it getting on fire accidentally.
- Own damage claims – It can be no-fault or regular damage claim, but it needs to refer to your vehicle that participated in the accident.
You also have add-ons that could cover your windscreen, secure compensation for assessed repair time, or offer coverage if a flood happens.
Peace of Mind
While you should always be driving responsibly, the fact that you have a car insurance policy will offer peace of mind. If your vehicle gets damaged through no fault of your own, you can rest assured that the insurance company will cover the expenses. That means you don’t have to worry about entering a rough financial patch because of a small accident that you couldn’t have avoided.
A No Claim Discount
Depending on the agency, NCD benefit might also be called a No Claim Bonus (NCB). The purpose of this discount is to secure better policy rates for responsible drivers. If you don’t file a claim during the last year and you don’t have any claim against the insurer made by a third party, you will be eligible for a discount. The discount varies from one agency to another but usually increases with time. In the second year of your deal, the premium might be a tempting 25%. After the fifth year, it could increase by over 50% for private vehicles. Commercial vehicles have a lower discount, but they can still go to 25%. All these percentages are quite tempting and should motivate policy owners to drive responsibly.