Advantages of a Money Back Policy
Published On Oct 04, 2021 10:00 AM By InsuranceDekho
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Money-back plans combine the advantages of insurance and investing. They invest a percentage of your money in the market in addition to providing you with life insurance. You can also utilize a money-back plan to prepare for your future goals while still protecting your family after your death. One advantage of investing in money-back plans is that it is less risky than other investment products. They invest their money in cash bonds and assets that are not affected by market fluctuations. For all of these reasons, investing in a money-back guarantee is a fairly safe investment.
Advantages of a Money-Back Guarantee
A money-back insurance plan has several benefits. This is why these are the most sought-after insurance products among various investors. Some of the advantages of a money-back insurance plan are listed below:
1. Offers A Guaranteed Sum
In the case of the policyholder's death, the nominee of the insurance plan receives a lump sum payment known as the sum guaranteed. This sum can be used to cover a variety of expenditures for the policyholder's family members, letting them enjoy a life free of financial stress.
2. Profile Of Low Risk
Stocks, bonds, mutual funds, equities, and other investment vehicles are all influenced by market volatility. A money-back insurance policy, on the other hand, can provide a person with assured returns at regular periods. These programs are hassle-free and trustworthy due to the insurance coverage and consistent income. It might be a good option for you if you want to keep your risk appetite low.
3. Provides Insurance Protection
A money return plan, although viewed as an excellent financial tool, also functions as an insurance device. You can choose an appropriate policy that will help you fulfill the financial needs of your family members. These insurance products provide a sense of security and assist your loved ones in living a dignified life even after you have passed away.
4. Provides Tax Advantages
Section 80 C of the Income Tax Act allows a tax deduction for insurance premiums paid under a money-back insurance plan. The premium paid, on the other hand, must be less than 10% of the insurance plan's total insured. The sum promised is also eligible for a tax deduction under section 10(10D) of the Income Tax Act, subject to the aforementioned criteria.
5. Returns On Investment Within A Few Years
This insurance plan provides a steady stream of money. These insurance plans, unlike typical life insurance plans, give not just maturity benefits but also a consistent income stream at regular periods.
6. Waiver For Premium Riders
The remaining premiums are waived if the policyholder dies before the insurance term finishes owing to an unforeseen incident. This means the family or candidate won't have to worry about any additional costs at a time when they're already dealing with a lot of emotional and financial stress.
7. Additional Riders
If the life assured wishes to cover parts of their life not currently covered in the plan, they may choose from a selection of supplementary riders or add-ons to help them do so. These extra rides can potentially be claimed as a tax deduction.
Money-Back Plans might come in handy if you're in a need. With lower risk and guaranteed payouts, you may be assured that your family will be taken care of whether or not you are there. To summarise, a money-back plan is the best investment choice since it provides various beneficial features such as survival, maturity, tax advantages, death benefits, and other riders that may help you in times of need.
You may also like to read - Eligibility Requirements To Purchase A Money Back Plan
Top Money Back Policies In India
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.