How to Perform Comparison of Money Back Plan?
Published On Sep 09, 2021
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A money-back insurance plan provides the same maturity advantages in the form of multiple guaranteed "survival rewards" that are spaced equally over the policy's term. As a result, a money-back insurance policy is an endowment plan with the added benefit of consistent liquidity. These plans provide a guaranteed return on investment as well as monthly payouts and insurance coverage, making them an excellent choice for those seeking both protection and a source of income. A money-back policy, in addition to the ordinary life insurance provided by conventional policies, provides a policyholder with a maturity benefit as well as a regular income in the form of "survival benefits" during the lifetime of the policy.
Key Factors While Comparing Money Back Plans
You must take into account the following factors while comparing money back plans -
1. Insurance Provides Protection Against Death
When comparing money return plans, it is critical to understand the benefits obtained by the survivors if the policyholder dies during the plan's lifetime. It is advisable to choose a policy that gives a payout that includes the sum assured as well as all earned bonuses, with no reduction for previously disbursed survival benefits. This guarantees that your survivors receive greater death benefits, which is advantageous to their financial security.
2. Values Surrender
Surrender value is the amount paid by the insurance provider if the policyholder quits the policy voluntarily before it matures. Most insurers will only give surrender values after you have paid your annual premium for at least three years. Experts advise against surrendering the insurance before maturity since the amount obtained is substantially less than what it would be at maturity. Use this option only if you have no other options for raising funds. In the event of a financial emergency, it is preferable to take out a loan against your insurance coverage.
3. Riders available
Riders give additional protection to the insured that goes beyond the fundamental terms and conditions of your insurance policy. Individuals can obtain low-cost pure risk coverage with these riders. However, you must incorporate the riders by paying an additional fee when purchasing the insurance. Accidental death benefits, critical sickness coverage, permanent complete disability benefits, and an income benefits rider are among the available riders. Before deciding on a policy with the most riders, consider if your lifestyle and circumstances necessitate such riders. Remember that riders have a cost, and incorporating all riders is not an economical or sensible option when comparing money return insurance offerings.
4. Tax Benefits
Premiums paid for Tax Benefits Insurance during the year are eligible for exemptions under Section 80C of the Income Tax Act. In most situations, Section 10 exempts the maturity revenues and withdrawals as well (10D). You must double-check that the survivor benefits you receive at regular intervals throughout the policy's term qualify for these tax breaks as well.
Money-back plans are a useful financial planning tool since they provide a monthly dividend at regular periods. Furthermore, these policies include insurance coverage, tax advantages, and incentives, making the plans a safe and secure investment option. These types of insurance plans are suitable for cautious investors who desire lower but assured returns on their investments. To select the finest life insurance policy, it is important to utilize an online money-back plans comparison tool.
Also read - SUD Life Guaranteed Money Back Plans
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.