Should I Exit From Money Back Insurance Policy?
Updated On Dec 09, 2021
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Money Back plans provide benefits such as a survival benefit, death benefit, tax benefits, and maturity benefits, as well as a long-life cover and additional add-ons or riders to cover aspects of life that are not covered in the plan from the start, so you can achieve your short-term goals and save and grow your money. You must first wait for your strategy to acquire surrender value before surrendering it. Many plans have surrendered value after three premium payments, however, in recent years, plans with surrender value after only two premium payments have been developed. The plan will expire if you stop paying your premiums after only one payment, and the benefits you would have earned if you had continued the plan would be lost.
Benefits of a Money Back Insurance Plan
Money Back programs provide a number of benefits that might help you save and grow your funds for short-term goals. It is strongly advised that you research various plans and your availability before deciding to invest in a plan. The following are some of the benefits:
Advantage of Survival
To mark the anniversary and the life assured's survival through various age milestones, the life assured is awarded an amount of money as a bonus. If the life assured survives the whole insurance period, they will get a survival benefit, which is a bonus similar to the accomplishment.
Advantage of Maturity
When the policy matures, the life guaranteed will get a share of the money pledged, as well as any extra incentives available to the plan. This allows the life assured to contribute to the attainment of their financial objectives.
Insurance Against Death
If the life guaranteed dies unexpectedly during the policy term, the nominee of the policy will be paid an amount equal to the value pledged, plus any bonuses payable under the plan, providing all premiums are successfully paid. These incentives are not included in the survival benefit since the life assured did not survive the whole insurance period.
Section 80C of the Income Tax Act of 1961 is used to apply tax benefits to the insurance.
To cover other aspects of life, the life assured might choose additional riders and add-ons to the standard policy.
Finally, those who have set short-term goals utilize Money Back schemes to help them achieve them. People who want to preserve at least a percentage of their earnings by investing in stocks and the market choose them. These plans provide a variety of advantages, including a survival benefit, a death benefit, a maturity benefit, a tax benefit, and so on, to ensure that your loved ones are not left in debt when you pass away. You can depart from the plan if your needs differ from these. Otherwise, your plan will lapse and your benefits would be terminated until the surrender value of your plan improves. It's essential to consult with a financial advisor before investing in a plan and choose a portfolio that meets your income, stability, and flexibility.
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.