Advantages of a Money Back Plan
Updated On Jul 25, 2021
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A money back plan is a type of life insurance plan that offers dual benefit i.e. both investment as well as protection. These insurance plans provide you payouts at regular intervals and in the event of an unforeseen incident offers a lump sum amount to the policyholder. Money back plans also offer you guaranteed survival benefits via the policy duration and upon the maturity of the plan. It allows the policyholder with high liquidity in comparison to any other type of life insurance plan.
Advantages of a Money Back Life Insurance Plan
There are various advantages associated with buying a money back plan. This is the primary reason why a money back plan is the most sought after insurance tool for investors of all income backgrounds and ages. Highlighted below are some of the reasons how a money back plan be beneficial for you:
Offers Insurance CoverageA money back plan acts as both an insurance instrument as well as an effective investment product. A policyholder can opt for a suitable insurance cover that can be helpful in meeting the financial requirements of your family members. These plans bring in reliability and also let your loved ones lead a comfortable life without compromises even in your absence.
Provides Sum AssuredIf any unforeseen event arises, the insurance company provides a lump sum amount i.e. the entire sum assured to the beneficiary. This is the amount that can be utilized by your family members in order to meet their financial obligation and carry out their life with dignity and respect.
Moreover, upon completion of the plan duration, the insurance company pays survival benefits upon maturity. This will assist you in fulfilling all your future financial goals such as child education, dream house, retirement, amongst others.
Low Profile RiskInvestment instruments like stocks, mutual funds, equities, bonds, stocks, etc are impacted by the fluctuation in the market situations. With a money back policy, you are promised guaranteed returns periodically. With an insurance cover and regular payouts, these plans are hassle-free and dependable.
In case you prefer having a lower risk appetite, it can be an ideal choice for you. These plans help you in countering the risk in your portfolio. These plans can be useful in diversifying your investments and design a well balanced portfolio of non-volatile and volatile instruments.
Tax BenefitThe premiums payable for money back plans are exempted from tax under sec 80 C of the Income Tax Act. However, it is subject to the condition that premiums need to be less than 10% of the sum assured of the plan.
Provides Quick ReturnsMoney back plans provide a regular flow of income. As opposed to a traditional life insurance plan, they not only provide maturity benefits but also continuous flow of income at regular intervals. Also, a money back plan is similar to an endowment plan as it gives returns quickly i.e within a few years after investment.
In case you are someone who is looking for lower risk, guaranteed returns and a life cover to protect the future of your family members financially, then a money back plan is a smart choice. These plans also provide periodic returns and tax benefits to increase the overall liquidity. However, it is equally important to invest your hard earned money with a good insurance company to get a perfect plan. So, in case you still haven’t purchased a money back plan, then do not delay any further and quickly buy one.
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.