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Money Back Or ULIPs? Which Is Better?

Published On Nov 16, 2021 10:00 AM By InsuranceDekho

Unit Linked Insurance Plans (ULIPs) are a type of insurance that also serves as an investment. The Premium is paid by the Policyholder and then divided into two parts. A portion of the money is used to provide coverage to the insured individual, while the rest is invested in the stock market. The other half is invested in the market, while the other half is used to provide insurance to the insured individual. The Risk Factor is there since the investment made through these plans is invested in the market, and the Policyholder is the sole risk bearer.

Money Back  Plans are a great alternative for folks who prefer not to take chances and want to have assured returns on their investments instead of dealing with market swings.The Money Back Plans are similar in that they combine insurance coverage with an investing portfolio. Premiums are paid at the insured's specified intervals. The existence of Survival Benefits, which are a percentage of the Sum Assured and are paid at predetermined intervals so that the insured person can use them in an emergency or save them to create wealth, sets this plan apart from others. We'll examine and contrast Money Back Plans and ULIPs in this post.

Unit-Linked Insurance Plan Benefits (ULIPs)

The following are the features of ULIPs:

1. ULIPs Are Flexible.

These plans are adaptable because they let policyholders choose from a variety of fund investment possibilities. It also allows the Policyholder to initiate a Partial Withdrawal with additional fees.

2. Funds For Any Type Of Emergency

Money may be needed at any time during one's life. The Partial Withdrawal Facility enables you to access funds whenever you need them, at any time in your life.

3. Make Your Child's Future Safe

ULIPs give a market-related return on investment. These higher returns might assist you in building a corpus to meet your child's financial needs.

4. Make Plans For Your Life After Retirement.

In the long term, the returns on ULIPs, as well as the insurance, are greater. You can collect money that will benefit you when you retire if you start investing in ULIPs at an early age.

The Most Important Advantages of Money Back  Guarantees

Money Back programmes have the following characteristics:

1. Returns are guaranteed.

Market fluctuations have no effect on the Money Back Plans. Maturity, Death, and Survival Benefits are all examples of guaranteed returns.

2. Secondary Source Of Income

The Survival Benefits are a supplemental source of income that are paid at regular intervals throughout the Policy Term. The Policy Holder can use these Monetary Values in any way he or she deems fit.

3. Maturity and Death Benefits

Guaranteed Returns are provided through the Money Back Plans. You will surely get the Sum Assured when the Policy Term finishes. The Nominee will surely receive the Lump Sum as a Death Benefit in the case of the Policyholder's untimely death.

4. Riders Added

The Riders complete the coverage provided by the existing Plan. Accidental Death, Critical Illness, and other riders will safeguard you against any unanticipated and unforeseeable occurrence.


As you can see, each of these Plans has its unique set of benefits, drawbacks, and benefits and drawbacks. All you have to do now is go over the details and weigh the pros and cons of each plan to see which one is best for you. If you're prepared to take risks and want to make more money, we feel ULIPs are the ideal alternative. The Money Plan, on the other hand, is meant for those who do not want to incur risks and desire Guaranteed Returns.

Also read - How To Choose A Good Money Back Policy?

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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