A Detailed Comparison Between Money Back And ULIPs
Published On Feb 08, 2022 10:40 AM By InsuranceDekho
Table of Contents
- Unit-Linked Insurance Plan Benefits (ULIPs)
- Most Important Advantages of Money-Back Guarantees
Unit Linked Insurance Plan is abbreviated as ULIP. These are a mix of insurance and investing programmes. The Premium is paid by the Policyholder and then divided into two parts. A portion of the money is used to provide coverage to the insured person, while the rest is invested in the stock market. The other half is invested in the market, while the other half is used to provide insurance to the insured person. The Risk Factor is there since the investment made through these plans is invested in the market, and the Policyholder is the sole risk bearer.
Money Back Plans are a wonderful option for those who would rather not take risks and have guaranteed returns on their investments rather than dealing with market fluctuations. In the same way that the Money Back Plans combine insurance coverage with an investment portfolio, the Money Back Plans are similar. Premiums are paid at intervals determined by the insured. This plan stands out from others because it includes Survival Benefits, which are a percentage of the Sum Assured that are paid at specified intervals so that the insured person can utilise them in an emergency or store them to build wealth. In this article, we'll compare and contrast Money Back Plans and ULIPs.
Unit-Linked Insurance Plan Benefits (ULIPs)
The following are the characteristics of ULIPs:
ULIPs are flexible.
These plans are adaptable because they allow policyholders to choose from a variety of fund investment possibilities. It also allows the Policyholder to initiate a Partial Withdrawal with additional fees.
Funds for any type of emergency
Money may be needed at any time during one's life. The Partial Withdrawal Facility enables you to access funds whenever you need them, at any time in your life.
Make Your Child's Future Safe
ULIPs provide a market-related return on investment. These higher returns can assist you in building a corpus to meet your child's financial needs.
Make plans for your life after retirement.
In the long run, the returns on ULIPs, as well as the insurance, are greater. You can collect money that will benefit you when you retire if you start investing in ULIPs at a young age.
Most Important Advantages of Money-Back Guarantees
Money-back plans have the following characteristics:
Returns are Guaranteed
Market fluctuations have no effect on the Money Back Plans. Maturity, Death, and Survival Benefits are all examples of guaranteed returns.
Secondary Source Of Income
The Survival Benefits are a secondary source of income that are paid at regular intervals throughout the Policy Term. The Policy Holder can use these Monetary Values in any way he or she sees fit.
Maturity and Death Benefits
Guaranteed Returns are provided through the Money Back Plans. You will undoubtedly receive the Sum Assured when the Policy Term finishes. The Nominee will surely receive the Lump Sum as a Death Benefit in the case of the Policyholder's untimely death.
The Riders complete the coverage provided by the existing Plan. Accidental Death, Critical Illness, and other riders will safeguard you against any unanticipated and unforeseeable event.
As you can see, both of these plans have their own set of advantages, disadvantages, and pros and cons. All you have to do now is check over the specifics and compare each plan to see which one best meets your needs. If you are willing to incur risks in exchange for better returns, we recommend that you invest in ULIPs. The Money Plan, on the other hand, is designed for those who do not want to incur risks and prefer Guaranteed Returns.
Also read-Mistakes You Should Avoid While Purchasing A Money Back Plan
What Are Some Exclusions Of A Money Back Plan?
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.