Should I Exit From The Money Back Insurance Policy?
Updated On Sep 16, 2021
Table of Contents
Money-back plans are an excellent approach to invest in to save and build your money for short-term goals and pre-planned expenses. These programs provide several advantages that enable us to preserve money for the future. To be able to financially support yourself to achieve your short-term goals and save and grow your money, these plans provide benefits such as 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. If you wish to surrender your plan, you must first wait for it to earn surrender value. Many plans earn surrender value after three premium payments, however, in recent years, plans have been created that gain surrender value after only two premium payments. If you stop paying your premiums after just one payment, the plan will lapse and the advantages you would have received if you had continued the plan would be lost. Before investing in a plan, it is best to speak with a financial counselor and select a portfolio that fits your income, stability, and flexibility. Before you decide to invest in a plan, it is highly recommended that you evaluate various plans and your availability.
Advantages of a Money-Back Plan
Money-back programs have several advantages that might help you save and increase your money for short-term goals. Among these advantages are the following:
The life assured is paid a sum of money as a bonus to commemorate the anniversary and the life assured's survival through certain age milestones. If the life guaranteed lives the whole insurance period, they will get a bonus resembling the achievement known as the survival benefit.
The life assured will receive a portion of the sum promised as well as any other incentives available to the plan at the maturity age when the policy matures. This enables the life assured to contribute to the achievement of the financial goals that they have set for themselves.
In the event of the unexpected death of the life assured during the policy term, provided all premiums are successfully paid, the nominee of the policy will be paid an amount equal to the sum promised, in addition to any bonuses available under the plan. Because the life guaranteed did not survive the whole policy period, these incentives are not included in the survival benefit.
Tax advantages are applied to the policy under section 80C of the Income Tax Act of 1961.
The life assured can pick extra riders and add-ons to the conventional policy to cover additional elements of life.
Lastly, people with pre-planned short-term goals use money-back plans to financially support them. They are also preferred by people who wish to invest in stocks and the market to save at least a portion of their earnings. These plans offer several benefits, such as a survival benefit, a death benefit, a maturity benefit, a tax benefit, and so on, to guarantee that your family is not left in debt after your death. If your requirements differ from these, you can deviate from the plan. You must wait until your plan's surrender value increases; otherwise, your plan will lapse and your benefits will be terminated.
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.