Are Money Back Policies Productive?
Published On Sep 14, 2021 12:00 PM By InsuranceDekho
Table of Contents
Money-back plans are one of the most classic insurance cum investment products that insurance firms have widely advertised and distributed. Unlike traditional endowment plans, where the policy amount (sum guaranteed) is received either on death or at the end of the policy term, money back policies ensure that the survivor receives a specific proportion of the sum promised regularly during the policy period. This guarantees that the survivor has regular financial inflows fulfilled.
Reasons Money-Back Plans are Productive
Money-Back plans are among the most popular plans in which individuals choose to invest. Let us analyze why
Being financially stable necessitates patience and saving. Saving a little each month is certainly a strategy to achieve stability, but consider how little you will have saved at the end of the year if you do not plan the correct saving approach. Money-back programs are designed to assist you in saving more and meeting your needs. They are a secure method of saving and growing your money. They ensure financial security.
Another aspect of money-back that makes it useful is its survival advantage. When a life guaranteed lives the whole period of the plan, they are entitled to a unique benefit known as the survival benefit.
The most advantageous advantage of the money-back program is financial liquidity. After the first year of purchasing the plan, the life assured receives a portion of the money promised at regular intervals. This promotes better financial planning and that life's financial demands are met both now and in the future.
The Death Benefit
If something unexpected happens to you, your nominee will be compensated. This guarantees that you do not leave your loved ones in debt. This cash can be utilized to pay their everyday expenses and requirements. Finally, even when you are not around, you will be able to assure their financial security.
The money-back policy offers tax benefits under Section 80C of the Income Tax Act of 1961. This implies that the money you get from this plan is not taxed.
Money-back plans provide the best of both worlds since they are a blend of insurance and investment. If you are suddenly and unexpectedly killed, your nominee will get 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 fulfill your needs, but it also financially protects your family when you die.
You can purchase extra riders or add-ons to cover the areas that the money-back policy does not currently cover. Some policies also allow you to keep the life insurance even after the policy has matured.
To summarise, the money-back policy is an excellent approach to save and increase your money to secure your future and fulfil short-term objectives. Money-back characteristics that are beneficial include those that provide financial stability, survival benefit, death benefit, maturity benefit, tax benefit, extra riders, and insurance coverage. All of these elements work together to make the money-back investments profitable.
Also read: Understanding the Basics of a Money Back Policy
How to Perform Comparison of 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.