Money-Back Benefits That Make It An Ideal Choice
Updated On Jul 26, 2021
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As the name suggests, money-back is a policy where money is returned at regular intervals. The payouts are called survival benefits. The life assured receives these benefits on maturity and the remaining sum assured with bonuses. If the life assured departs, the entire sum assured will be paid to the dependent. This is what compels the money-back policy to stand out.
Unique Features of Money Back Plans
The features that attract the buyers to buy the policy are listed below:
- The life assured receives the survival benefits at regular intervals. There is a different payout structure for every plan. Hence, the percentage of sum assured is not the same in all the plans.
- The survival benefits are considered as percentages of the sum assured.
- On maturity, the sum assured remaining is received by the life assured and maturity benefit. In case the assured departs, the sum assured will be received by the dependent or nominee.
- The bonuses can be termed as participating bonuses as bonuses are added and the bonuses are received as maturity or death benefits.
- The factors that make this policy hassle-free are regular income and the benefits offered.
- If the assured chooses to keep a low-risk profile, money back is an ideal choice.
- It is a good way to receive more than just the maturity amount due to the benefits and payouts at regular intervals.
Characteristics of Money Back Policy
Below are the characteristics of a money-back policy that make it an ideal choice:
If the life assured survives the whole policy term, they receive a special bonus. This is called survival benefit. On maturity, the assured also receives a maturity bonus.
This makes the plan unique. A percentage of the sum assured is received by the assured at regular intervals of time during the policy term. This helps the assured to have the required liquidity. It also helps them to plan their finances better.
If the life assured is not willing to take any risks, this plan is an ideal choice. They can choose the right plan by comparing a few factors and picking a favorable one.
The dependent receives a death benefit in case the life assured passes away during the policy term. Sum assured of the money-back policy along with the bonuses accumulated under the policy are payable as the death benefit. This does not include survival benefits as they have not survived the whole policy term.
Choosing a Money-Back Policy
At this age, there are a lot of money-back plans to choose from. Comparing the characteristics of these plans with each other helps the buyer pick a suitable option. The plan you pick must comprise features to meet your needs.
The factors that must be considered while choosing a suitable plan are as follows -
- Financial goals of the buyer.
- The number of funds they can invest at present.
- The time frame.
- Payout forms.
Money-back solves the problem of liquidity as it pays a portion of the sum assured to the life assured at regular intervals of time. It has many benefits to name, the survival benefit, death benefit, and maturity benefit. This has everything a short-term goal needs. Before picking a favorable plan, some factors are to be considered namely, financial goals, investing capacity, time frame, and payouts. They are low risk and cover well. They are often referred to as a source of regular income due to their benefits. It is a great way to earn more than just the sum assured considering all the bonuses the plan comprises. All of the above-mentioned points make the money-back policy ideal to buy.
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.