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Reasons to Buy a Money Back Insurance Plan

Published On Aug 08, 2021

While thinking about investments, generally we have in mind mutual funds. However, there are various tools that provide similar kinds of benefits, if not offering more than that. Money back plans are one amongst them. Given below are five reasons why you should consider investing in a money back plan -

1. Dual Benefit of Investment and Insurance

A money back plan offers dual services i.e it acts as both an insurance product as well as an investment instrument. These plans, alongside offering a life cover, also invest a portion of your premiums in the market. Therefore, other than safeguarding the future of your family, you also get a chance to save your future goals with a money back plan. Also, it should be noted that a money back plan is less risky as they invest in securities and cash bonds, which are not affected much by market fluctuations.

2. Premium Waiver Benefit

In the event of the demise of the policyholder prior to the end of policy tenure, the premiums payable further are waived off. However, the plan still continues to be active, and the payments are made as decided or periodically. It is an important feature of a money back plan.

3. Ensure the Financial Safety of Your Family

One of the most significant feature of a money back plan is the component of life insurance offered in it. In the event of your unfortunate demise, the nominee appointed by you at the time of purchasing the policy would receive the sum assured as a payout. This ensures that your family members are not in financial distress even in your absence. This lump sum amount can be utilized by them in order to meet their necessities and everyday expenses. This way you can take care of them even when you are gone.

4. Regular Payouts

Money back plans provide you with a fixed percentage of the maturity benefits on a periodic basis. You can select the amount that you want and at what time in your life. You can make investment in these monthly income schemes in order to receive a regular income or select the payouts to assist you through different phases of life.

5. Tax Benefits

A policyholder who pays the premium regularly towards the money back plan can avail the tax benefit. The benefits offered under this plan are mentioned as per section 80C of the Income Tax Act. Moreover, the survival benefit, maturity benefit and the bonuses received from monthly investments as applicable are free from tax.

Conclusion

It is always advised to do a thorough research prior to buying a money back insurance plan. There is a lot of information available online for a person to go through in order to attain knowledge. You can do a comparison of the plans using the premium calculator available at InsuranceDekho absolutely free of cost. Also, ensure to go through the documents to know the details of the insurance plan before you sign the documents and make payment for the plan.

Also read - Need a Good Saving Plan? Buy 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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