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Are Money Back Plans Good?

Updated On Jul 10, 2021

As an individual one may have many financial goals you would like to achieve and hence one of the best ways to achieve this is to invest your savings and earnings in different investment tools which can help your money to grow for a financially secured future allowing you to achieve your financial goals. Insurance is one of the best investment tools especially if it’s a money-back plan that lets you avail tax benefits and accomplishes the objective of investing.

Money-back plan is an investment tool which gives you the best of both worlds. A money-back plan provides life cover but also provides a regular lump sum or a certain amount of the sum assured so that you can take care of your financial needs.

In case something unfortunate happens to you during the policy term, the nominee will receive a death benefit. Under money-back you will also receive regular payments in instalments after the policy attains maturity and you will receive the remaining sum assured with a bonus if any.

Benefits of Purchasing a Money-back Plan?

are various reasons why a money back plan is considered a good investment option. Below mentioned are some of the benefits of purchasing a money-back plan: 

1. Risk-free Investment: Unlike ULIPs which invest your earnings in different market instruments, money-back plans do not invest your money in risky market-linked investment instruments. Money-back plans are risk-free investment tools. Plans like ULIPs are risky in nature but purchasing a money-back plan can be beneficial.

2. Liquidity: Money-back plans offer liquidity as a regular sum of money is provided to the life assured after the plan maturity. This feature of a money-back plan allows you to fulfill your financial needs in different life stages and also allows you to fulfill your financial goals. 

3. Survival Benefits: Money-back plans offer a maturity benefit under which a lump sum amount is provided to you in case you survive the entire policy term. The maturity benefit is equal to the remaining sum assured after the regular instalments have already been paid including the bonus if you are qualified for it. The maturity benefit provided at the end of the policy term.

4. Life Coverage: Money-back plans are a type of life insurance which provide life coverage and offer an option to invest your earnings. Money-back plans are considered insurance cum investment plans. In case of your unfortunate demise during the policy term your family will receive the sum assured in spite of the periodical payouts you receive after the plan maturity. A money-back plan allows you to grow your earnings, offers periodical payouts and also provides financial assistance to your family in case of your unpredicted demise.

5. Tax benefits: Under money-back you can also avail tax benefits. The maturity benefit payable qualifies for tax exemptions and the premiums paid towards a money-back insurance plan are eligible for tax exemptions under Section 80D and 10(10D) of The Income Tax Act, 1961. 


Money-back plans are a great way to build your corpus. This type of life insurance plan has dual purpose that is life cover and investment. In case of your unpredicted demise your family will receive a death benefit. After the plan matures you will receive periodical payouts which are equivalent to a certain percentage of the sum assured, these periodical payout help you fulfill financial requirements in different stages of ife and also help you achieve your goals. If you want to invest your money in a risk free investment, you can consider investing your money in money-back plans.

Also read - Top Questions Asked While Purchasing 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. 

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