Top Questions Asked While Purchasing A Money Back Plan
Updated On Jul 06, 2021
As compared to other traditional plans in the market who provide the pay-out at the maturity of the policy, money-back plans as the name say it all, offers guaranteed money back in between the tenure at fixed periods as defined in the policy contract in addition to other benefits such as maturity and death benefits. These small amounts paid at intervals are a percentage of the sum assured and are known as Survival benefits. A money-back plan not only offers a cover as well as it provides an additional source of secondary income.
What are the Benefits of a Money Back Plan?
There are several key benefits of the money-back plan as mentioned below-
These are the major aspects of the money-back plan which makes these types of plans different from the other ones available in the market. These are a form of regular income which are paid at fixed intervals during the tenure of the policy. These amounts are a percentage of the sum assured that is received by the insured.
This benefit is available in case of the sudden demise of the insured person. In such scenarios, the nominee of the insured gets the maturity benefit along with the accrued bonuses. The survival benefit is not paid if the insured dies before the completion of the policy tenure.
As the name suggests, this benefit is paid out once the policy matures. The sum assured which remains after the Payment of the survival benefits and the accrued bonuses are included.
Riders can be added to increase the cover of the policy. A few examples of this are critical illness cover or accidental cover.
What Are The Eligibility Criteria To Buy A Money Back Policy?
Just like any other policy this type of plan also requires the basic documents as mentioned below-
- Proof of age
- Proof of address
- Medical reports
Is The Amount Received Through A Money Back Policy Taxable?
The amount received through this plan is tax-free as per section 10(10D) of the Income-tax act 1961.
This will make sure that you don't have to pay additional taxes on this additional income that is generated.
Can I Revive A Money Back Policy?
Yes, the money-back policy can be revived. The revival can be done within 2 years from the date when the last premium was paid.
Can I Transfer My Money Back Policy?
Unfortunately, the money-back policy cannot be transferred as of now, however, the policy can be surrendered if desired.
What Are The Factors To Be Considered Before Purchasing A Money Back Policy In India?
Even though the money-back plan is the most beneficial plan available in the market, you have to consider 3 major factors before making any decision about buying the money-back plan.
- Consider your financial goals
- What is your risk appetite?
- How long do you wish to stay invested
Now that you have the answers to the most common questions which are asked before purchasing a money-back plan, you can take the required decision. If you're still in a dilemma or have doubts you can call the customer service of the insurance company that is providing these plans and discuss everything in brief with an expert.
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.