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Are Money-Back Policies Productive?

Published On Jul 29, 2021, Updated On Jul 30, 2021

Money-back plans offer many benefits like survival benefit, death benefit, and liquidity.

The Money-Back plan is often opted for by people with short-term goals. If something unfortunate happens to the life assured, like sudden death, the beneficiary receives a lump sum amount under death benefit. 

This policy is considered to be productive due to different reasons which are discussed in this article. The money-back policy offers a part of the sum assured at regular intervals so that the life assured can cover any major expense in the future. 

Reasons Money-Back Plans are Productive

Money-Back plans are one of the most popular plans people choose to invest in. Let’s find out why - 

Financial Security

The thought of being financially stable needs patience and saving. Saving a little every month is surely a way to get stability but, imagine how little would be saved at the end of the year when you do not plan the right saving method. To help you save better and be able to fulfill your necessities, money-back plans are used. They are a safe way to save and grow your money. They assure financial stability.

Survival Benefit

Another feature of money-back that makes it productive is its survival benefit. When the life assured survives the whole term of the plan, they receive a special benefit called the survival benefit. 


The most beneficial plus point of the money-back policy is financial liquidity. The life assured receives a percentage of the sum assured at regular periods after the first year of buying the plan. This ensures better financial planning and that life’s financial needs are taken care of for the present and future.

You may also like to read:- Money-Back Benefits That Make It An Ideal Choice  

Death Benefit

If something unforeseen occurs to you, your nominee will get a certain sum as compensation. This ensures that you do not leave your loved ones in financial trouble. To cover their daily costs and necessities, this amount can be used. In conclusion, even when you are not around, you will be able to ensure their financial safety.

Tax Benefit

Under section 80C of the Income Tax Act,1961, the money-back policy provides tax benefits. This means that the amount received through this plan is not taxable.


As the money-back policy is a combination of insurance and investment, money-back plans provide you the best of both worlds. If something sudden and unexpected happens to you, your nominee will receive the guaranteed sum, regardless of the regular payout you have been receiving. A money-back plan not only allows you to grow your money and receive a monthly income to meet your necessities, but it also safeguards your family financially when you are no longer alive.

Additional Riders

To cover the aspects that the money-back policy does not already cover, you can buy additional riders or add-ons. Some policies also allow you to continue the life cover even after the maturity of the plan.

Also Read:- Why is Money-Back Considered a Superior Investment Option? 


In conclusion, we can say that the money-back policy is a great way to save and grow your money to safeguard your future and meet short-term goals. The features of money-back that make it productive are the ones that offer financial stability, survival benefit, death benefit, maturity benefit, tax benefit, additional riders, and insurance coverage. All of these features combine and make the money-back investments productive. 


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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