Difference Between Money Back Plans And ULIP
Updated On Sep 29, 2021
Table of Contents
- Benefits of Unit-Linked Insurance Plan (ULIPs)
- Key Benefits of Money-Back Guarantees
ULIP is an abbreviation for Unit Linked Insurance Plan. These programs are a hybrid of insurance and investment. The Policyholder pays the Premium, which is then divided into two portions. One portion is utilized to give coverage to the insured person, while the remainder is invested in the market. One-half is utilized to offer insurance to the insured person, while the rest is invested in the market. Because the investment made through these plans is invested in the market, the Risk Factor is present, and the Policyholder is the sole risk bearer.
Money-Back Plans are an excellent option for people who do not like taking risks and want to have guaranteed returns on their investments rather than dealing with market fluctuations. The Money Back Plans are likewise a combination of insurance coverage and an investment corpus. Premiums are paid at the intervals chosen by the insured. What distinguishes this plan from others is the presence of Survival Benefits, which are a proportion of the Sum Assured and are paid at fixed intervals so that the insured person can utilize them in an emergency or store them to build their wealth. In this article, we will compare and contrast Money Back Plans and ULIPs.
Benefits of Unit-Linked Insurance Plan (ULIPs)
ULIPs have the following characteristics:
ULIPs are Adaptable
These plans are flexible because they let the policyholder pick and shift between several fund investment options. It also permits the Policyholder to initiate a Partial Withdrawal with certain Extra Charges.
Funds for any Critical Situation
Money might be required at any point in one's life. The Partial Withdrawal Facility allows you to use the money whenever you need them, during any important period of your life.
Make a Safe Future for Your Child
The return on investment provided by ULIPs is market-related. These greater returns can help you develop a corpus to fulfill your child's financial demands.
Make Plans for Your Post-Retirement Life.
The returns from ULIPs, as well as the insurance, are superior in the long run. If you start investing in ULIPs at a young age, you can accumulate investments that will benefit you when you retire.
Key Benefits of Money-Back Guarantees
The following are some characteristics of money-back plans:
Offers Guaranteed Returns
The Money Back Plans are not affected by market fluctuations. Guaranteed Returns are provided in the form of Maturity, Death, and Survival Benefits.
Secondary Income Source
The Survival Benefits, which are paid at regular intervals throughout the Policy Term, provide a secondary source of income. These Monetary Values can be used any way the Policy Holder sees fit.
Benefits of Maturity and Death
The Money Back Plans to provide Guaranteed Returns. When the Policy Term expires, you will undoubtedly get the Sum Assured. In the event of the Policyholder's untimely death, the Nominee will undoubtedly get the Lump Sum as a Death Benefit.
The Riders supplement the current Plan by providing complete coverage. Riders such as Accidental Death, Critical Illness, and so on will protect you against any unforeseen and unforeseeable event.
As you can see, each of these Plans has its own set of advantages, disadvantages, and pros and cons. You just need to check over the specifics and evaluate each of the plans to determine which one is best for you. We believe that ULIPs are the best option if you are willing to accept risks and desire bigger profits. However, if you are not a risk-taker and prefer Guaranteed Returns, the Money Plan is designed for you.
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.