Money Back Policy: All You Need To Know
Published On Sep 24, 2021 10:00 AM By InsuranceDekho
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A conventional insurance policy typically provides the sum promised in the event of the policyholder's death during the policy period. In the Moneyback insurance policy, however, the insurance company is required to pay maturity benefits in the form of survival benefits at regular intervals during the policy duration. In addition, if the policyholder dies during the plan period, the sum guaranteed amount will be paid to the beneficiary, regardless of how much has previously been paid in the form of survivor Benefit. As a result, we may think of a money-back plan as an endowment policy with the added benefit of frequent liquidity. It's a plan that combines insurance and investing tools.
Why Do You Need a Money-Back Plan?
People who want a guaranteed return on their investments should opt for the money-back policy. It is also suitable for individuals who want to earn regular payments in addition to insurance coverage. Unlike a traditional life insurance policy, which pays only at maturity, a money-back policy begins paying you with an amount in the form of a survivor benefit in addition to maturity benefits, plus any relevant bonuses. However, if the insured person dies before the policy matures, the beneficiary is entitled to the death benefit, which is the whole sum guaranteed amount, and the money-back insurance is canceled.
A money-back insurance policy, with such features, promises to offer monthly payouts, ensuring policyholders discover a steady income stream that eventually helps them achieve their future objectives and needs at various stages of life. This policy is suitable for anyone looking for a source of income as well as protection because it provides assured returns on investment through monthly pay-outs and life insurance coverage.
Advantages Of Money-Back Insurance Plans
Here are some of the benefits of purchasing a money-back insurance policy:
- Throughout the insurance period, recurring payment benefits are released.
- It serves as both an insurance policy and a long-term investment.
- Provides tax benefits on both survival and maturity returns.
- When compared to investments such as mutual funds, this plan is less hazardous.
- Optional riders are available to cover catastrophic diseases, impairments, and other events.
How To Choose a Money-Back Guarantee?
Choosing the best money-back plan will guarantee that you get the most out of it. When selecting this insurance, you must consider the policy term, as the average lifetime of a money-back plan is over 20 years. Because money-back insurance plans offer their policyholders a survival benefit, potential customers should look at the percentage of the sum assured that is paid out in monthly installments and choose a sum assured that is large enough to support their expenditures.
The many sorts of investments available under this one plan should be properly investigated. Policyholders should strive to verify the duration of the payouts that are supplied throughout the policy term in the form of survival benefits, since some plans are structured to pay policyholders every 5 years, whilst others have a different timetable dependent on the policy term. Policyholders should also check to see if the money-back plan gives any tax benefits, since certain plans may not provide any tax benefits if the survivor benefit is less than 20% of the sum assured.
A money-back policy is appropriate for risk-averse individuals who desire the added advantage of saving through an insurance plan while still retaining high liquidity. In the unfortunate case of the insured's death, the policy pays the nominee the whole sum promised, with no deduction from the survivor payments. So go ahead and get one today!
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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.