Key Advantages of Money Back Policy
Updated On Jun 15, 2021
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A Money Back Plan is one of the best insurance policies in India for the people who are looking for a guaranteed return policy. This policy also provides guaranteed payout after some years of investment. This policy works appreciably when it comes to life cover. Nominees of the policy receive the money if something unfortunate happens to the policy holder such as demise of the life assured.
Key Advantages of Money Back Policy
Let's discuss the advantages of the Money back plan in detail to gain a clear understanding of the same.
This is one of the best advantages of the Money Back Policy. Returns accrue only after a few years of investment. In long term policies such as for 15 years or 20 years the amount is paid in every few years and adds into the sum. Remaining benefits are paid on the maturity of the plan. Company provides this benefit in 2 steps. 1st step consist of amount paid after every few years during the policy tenure and the 2nd step consist final payout that is larger than earlier payouts and it is provided at the time of the maturity.
Bonus at the Time of Maturity
Bonus leads to increase in overall payout at the time of maturity. Bonus consist of 2 types i.e. Reversionary Bonus and Additional Bonus. The former is declared every year on the sum assured and it gets added to the overall bonus that the policyholder receives at the time of maturity.The latter part is declared and given by the company at the time of maturity as a final additional bonus or in form of reward to the policyholder.
Under Section 80C, of the Indian Income Act, if you have paid all the premiums under money back plan then you are qualified for tax deduction up to Rs. 1.5 Lakh. By opting for a money back plan you can reduce your tax liability. This will lead to an increase in money in addition to survival benefits, sum assured, bonus and the sum assured on maturity.
It's a good way through which you can secure your investments. Returns are guaranteed in this policy so that you can live your life in a worry free manner. This policy also acts as a guard against any risk towards your fund which you definitely need in your future. It also reduces the risk towards your investment portfolio.
Low Risk Instrument
Products of investment such as mutual funds,bonds, etc., are affected by stock market movements. However, a money back plan promises guaranteed returns at regular intervals during your policy tenure. This will be the ideal pick for you if you want to make your profile safe against any kind of risks.This policy will keep your profile away from any kind of harmful risks.
Money back plan is an insurance instrument. You can choose a life cover from a wide range of options for your loved ones to meet the monetary requirements. Such plans let your family and loved ones live a hassle-free and a dignified life in your absence. It's an effective and attractive investment that you can plan for your future outcomes.
These are some of the advantages of Money Back Plans that can be considered while taking a policy to meet your requirements. A Money Back Plan is a great choice if you are looking for life cover, assured returns , low risk, all in one 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.