Some Things to Think About Before Buying Money-Back Policy
Updated On Jun 15, 2022
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Money-Back plans are types of life insurance policies that insure the life of the person in whose name the plan has been taken up which helps them to accumulate an assured sum of money. Under this policy,when a specified time elapses, the person gets monthly benefits such as survival benefits,maturity and also death benefits i.e. the life of the person is insured under this plan.
Things To Ponder Upon Before Buying A Money-Back Plan
Some of the things that need to be kept in mind before buying a money-back policy are as follows:
Premium
A plan must be selected that allows the payment of the premiums without difficulty. Financial situation and financial independence must be considered before investing. To pay your premiums on time and without penalty, an appropriate period will be required. Examine your responsibilities like EMIs, rent, and so on. You should not try to stretch your budget beyond your affordable amount before investing in anything. If you cancel insurance in the middle of its term then you may lose money.
Assured Amount
Unlike investment plans and strategies such as mutual funds, bonds, and other instruments that are directly affected by the movements in stock markets.
Money-Back Policy ensures guaranteed returns at specified intervals during the tenure, making it a low-risk instrument .
Additional Benefits
Some money back policies may also offer additional benefits in form of Guaranteed Additions to the policy or extra money backs.The Money Back policy provides various benefits like death benefit, maturity benefit and survival benefit along with bonuses which are paid in addition to the sum assured. This bonus is based on its performance from the insurance company.
Insurance Protection
These investments are secured because the returns from money-back policies are guaranteed and are not subjected to any kinds of change,regardless of any government infringements or market conditions. There are no re-investment risks; whatever the insurer might have committed on the paper will be paid out at maturity, guaranteed. Hence it protects your money and reduces the overall risk of your portfolio.
Conclusion
Finally, the critical elements must be analyzed properly before deciding on a strategy to be intelligent and in order to preserve your money for future reasons and expenses. This will allow you to be more successful ,save and increase your money, as well as match your assets to your lifestyle. In today's turbulent environment, where things change swiftly, ups and downs can occur without warning. There is no difficulty when everything is on track. The problem arises when things take a turn for the worst and make you clueless for the next line of action..
Also Read: Are Money-Back Policies Right For You
