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Are Money-Back Policies Right For You?

Published On Mar 16, 2022 10:00 AM By InsuranceDekho

Under a moneyback insurance policy, the insurance company is required to pay maturity benefits as a result of survival benefits at regular intervals over the policy period. Furthermore, if the policyholder dies during the plan period, the beneficiary will get the full covered amount, independent of any survivor Benefit previously paid. As a consequence, a money back plan is similar to an endowment policy with the added benefit of periodic liquidity. It is a solution that incorporates insurance and investment goods.

What Are the Benefits of a Money Back Guarantee?

A money-back insurance policy offers several advantages. As a result, they are the most popular kind of insurance among investors. Some of the advantages of a money back insurance plan are as follows:

1. Offers both insurance and investment advantages.

A Money back insurance policy offers both insurance and investment benefits. In addition to providing life insurance, they invest a large amount of money in the market. As a result, in addition to protecting your family's future, a money return plan may be used to invest in your long-term goals. It is crucial to note that investing in money back insurance is less risky because the money is put in securities and cash bonds, which are less susceptible to market fluctuations. As a consequence, investing in a Money back policy is low-risk.

2. Provides a Premium Benefit Waiver

If the policyholder dies within the policy's term, the extra premiums are waived. The plan, however, is still in effect, and payments are paid on a regular or as-needed basis. It's a critical component of a money-back guarantee program.

3. Payments are made on a consistent basis.

Under a money back insurance plan, a policyholder is entitled to a specified percentage of the maturity reward on a recurrent basis. A policyholder has the option of choosing how much they want to pay and when they want to pay it. They can also put their money in monthly income plans to ensure a consistent stream of income, or they can choose prizes to help them through different periods of life.

4. Benefits from Taxation

Policyholders who pay their insurance payments on a regular basis are eligible for tax breaks. The benefits are governed by Section 80C of the Income Tax Act. Other tax-free benefits include the survivor benefit, maturity benefit, and bonus from monthly investment plans.

5. Financial Security of the Family

The major reason for purchasing a Money back plan is to obtain life insurance. If something happens to you during the duration of the plan, your nominee will get the whole sum guaranteed as a payment. Even if you are not present, you may give financial stability to your family members. They can use this money to meet day-to-day expenses, pay off debts, and so on.

6. Returns that are devoid of risk

If you are frightened of taking risks, a money-back plan is a perfect solution for you because it is risk-free. If the policyholder survives, the insurance guarantees a return. If the policyholder dies, however, the nominee receives the money promised as well as any accrued bonuses.

7. Riders Extraneous

If the life assured want to cover elements of their life that are not currently covered by the policy, they can choose from a number of add-ons, also known as supplementary riders. These riders provide advantages and services that allow you to cover all elements of your life easily.


Finally, there are a variety of advantages to investing in money-back guarantees. Those who acquire stocks on a regular basis, either on their own or through mutual funds, may purchase this plan to protect at least a portion of their assets. If you're in a bind, Money Back Plans might come in handy. Because of the lower risk and guaranteed payouts, you may be certain that your family will be cared for whether or not you are there. Keep the above suggestions in mind before purchasing a Money Back plan; this way, you will be able to make an educated decision. Investing in insurance is an excellent way to protect yourself from huge financial obligations that are unavoidable in life.

Also Read: What Is The Difference Between Money Back Plans And ULIPs?

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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