Are Money Back Policies Helpful? – A Complete Guide
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Are Money Back Policies Helpful? A Complete Guide

Are Money Back Policies Helpful? A Complete Guide
  • 4th Jul 2022 |
  • 3,606

Keywords: money-back policies, money back plan, best money-back policy, money-back insurance policy,

Money-back policies are one of the popular life insurance policies in India as they offer a certain lump sum amount in return. There are other good life insurance policies too, but they serve a different purpose. In the insurance dictionary, these plans often fall under endowment plans.

In this article, we will cover money-back policies and whether these are helpful or not. We would also cover what are these and help you understand the benefits.

What is a Money-Back Plan?

In a money-back plan, a policyholder is entitled to receive regular payouts as well as a death benefit. If you invest in these plans, you will keep receiving a small amount at regular intervals.

This insurance policy is the right choice for those who want a guaranteed return on their investment, while having the option of a regular payout. When opting for money-back insurance policy, one can get all this in addition to an insurance cover in the same premium amount paid for the plan.

Additionally, the best part about money-back policies is that they pay lump-sum amounts after maturity or in the event of the policyholder’s demise. Money-back plans start paying survival benefits over the lifetime of the plan, which is a great benefit. The survival benefit is only given if the policyholder survives the term, and the payment for it starts after a few years of starting the policy. After that, the policyholder keeps getting survival benefit until money-back plan reaches its maturity/p>

Top Features of a Money-Back Policy

Money-back policies have numerous benefits linked to them. For starters, investors can earn a guaranteed return on their investment along with a life insurance cover. Let’s take a look at the top benefits of investing in money-back policies:

1. Offers guaranteed returns

Money-back policy is an excellent option for those looking for a purely safe and secure investment. As it offers guaranteed returns in addition to insurance, it is great for buyers who prefer low-risk investments with good returns.

2. Acts as a second source of income

Money-back plans offer income at regular intervals after a certain period of policy term. This benefit is known as survival benefit. What is survival benefit though? Let us help you understand that with an example.

Survival benefit is offered by insurance policies that have different premium payment and policy terms. Let’s say you have invested in a money-back policy that has a policy term of 25 years. However, the premium payment term for this policy is 18 years. In this case, you will receive a survival benefit after 18 years.

3.Maturity payment

Money-back policies offer both insurance and guaranteed returns. The returns at maturity are secured and guaranteed. The policyholder gets the amount they were promised at the beginning of the policy. Maturity payment is paid to the policyholder if the policyholder survives the policy term

4.Payment in the event of death

A money-back policy works like traditional insurance too. Thus, in case of an unfortunate demise of the policyholder, the nominee gets the sum assured in addition to other bonuses (if any) that the company may pay to the family members (nominee). The death benefit reaches the nominee/spouse as a lump sum payout.

There are various other benefits and drivers linked to money-back policies and other saving plans. These policies are beneficial for those wanting guaranteed returns along with insurance. Understand your long-term financial requirements before you start investing in it. Money-back policies can be a good source of returns, especially if you invest in it early.

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In this policy, the investment risk in the investment portfolio is borne by the policyholder.

Features

  • Return of Mortality Charges*$
  • Enhanced Protection
  • Multiple Plan Options
  • Zero Premium Allocation Charges
  • Tax Savings^

Ref. No. KLI/22-23/E-BB/521

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