Significant Components of A Money Back Plan
Updated On Jul 21, 2021
Table of Contents
Money back is considered one of the top insurance plans. This insurance policy comprises the benefits of both an insurance plan as well as an investment scheme. What makes it different is its approach of providing a regular income with maturity benefits and insurance cover. Besides, a bonus amount is also given to the policyholders with survival, maturity, or other benefits. However, in case of policyholder’s death, there lies no survival benefits and the beneficiary gets the entire maturity amount. Basically, the money back plan holds multiple elements based on which it functions. Hence, let’s dig in to know about some salient components of this policy to avail it without any hassle.
Significant Components of A Money Back Plan
Following are some components of a money back policy which you should know:
Sum Assured
The sum assured is the amount which is promised to be paid to the insured person on the maturity of the money back policy. It can be provided to a beneficiary as well in case of death of the policyholder during the policy term. It can be considered as total insurance cover opted by policyholders in the starting and upgraded in between.
Death Benefits
Death benefits are provided to policyholder’s nominee in case of his death during the tenure of the money back policy. This amount of benefit would not incorporate survival benefits as they are liable to be paid only when the policyholder is able to survive the complete policy term. The death benefit equals the sum assured amount of the policy.
Survival Benefits
The benefit of survival is offered to the insured person after the completion of a specific number of years over a distinct period of time till the end of the money back policy term. This insurance plan provides you assistance to meet your family’s financial costs. The payout structure of this survival benefit may vary from policy to policy and from insurer to insurer.
Maturity Benefits
The maturity benefit refers to all the amounts entitled to be received by the insurer person on the maturity of the money back insurance policy. This benefit incorporates different types of amounts which may comprise the amount of sum assured, the remaining amount of survival benefits, and the accrued bonus, if any.
Bonus Amount
The bonus amount can be understood as the amount paid by insurance providers based on the performance to the policyholder or nominee which may be computed on different grounds like if the policyholder paid all the premiums on time. There are mainly two types of bonuses which comprise terminal bonus or reversionary bonus. The former is a persistence bonus which is given at the end of policy term or as a death benefit. It is not certain and paid at insurer’s discretion, while the latter is declared at the end of every year by insurers and added to the sum payable as the maturity benefit or death benefit.
To Conclude
Money back insurance policy provides you a guaranteed return in addition to the life insurance benefits. This plan helps you meet your family expenses at different stages. Hence, it is a great scheme to invest in. However, you must be aware of its key components and terms to make an informed decision and avail it to the fullest.
Difference Between Money Back Plans and ULIPs
Money-Back Plan Vs Term Life Insurance
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.
