Understand The Meaning And Working Of A Money Back Plan
Published On Jan 31, 2022 10:00 AM By InsuranceDekho
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You may desire a product that combines the best of both worlds. As a result, the finest product you can get for yourself is a money-back plan. A money return plan not only provides coverage but also assures that you receive a set amount of money on a monthly basis to meet your needs. You can get a money-back plan for a set period of time, but you'll have to pay premiums on a monthly basis. In the event that you die, your beneficiary will receive a lump-sum payment known as the death benefit. You will also be paid a regular sum of money on a regular basis, and when your policy matures, you will be paid the total sum assured, plus any bonuses you may be eligible for. Riders or add-on plans are available with this sort of coverage, providing an additional layer of protection.
How Does the Money-Back Policy Work?
To further understand how a money-back policy works, let's look at an example.
For example, Aman buys a money-back plan with an Rs. 10 lakh sum assured and a 25-year policy term. He pays recurrent premiums for the duration of the coverage. The plan pays survivor benefits of 20% of the sum assured after every 5 years, and at plan maturity, 20% of the money assured will be paid, along with any earned bonuses.
Aman receives Rs. 2 lakh every five years. At the end of the 20th policy year, Aman had already collected Rs. 8 lakh. When the policy matures, he will earn Rs. 2 lakh in addition to the accrued bonuses. After then, the policy will be canceled.
Despite the fact that Aman will get Rs. 6 lakh as a survival benefit, his nominee will receive Rs. 10 lakh plus the additional bonus if Aman dies on the 18th policy year.
What Are the Benefits of a Money-Back Policy?
A money-back guarantee is accompanied by a host of benefits and bonuses. The benefits are the responsibility of the policyholder, but the bonuses are the responsibility of the insurance provider. Let's take a look at how by looking at the list of benefits, which includes:
1. Survival Advantages
From time to time, the policyholder receives money in the form of survival benefits. Throughout the policy's lifetime, the survival benefits are paid out at regular intervals. After a few years from the policy's start, survivorship benefits begin to be paid. The payment will continue until the policy's maturity date arrives.
2. Death Benefits
The insured person's death benefit is paid to the policy's nominee. The death benefit includes the sum promised of the money-back insurance as well as any bonuses earned on the policy. The survival benefit, on the other hand, is not included in the death benefit.
3. Maturity's Benefit
The insured person receives the maturity benefit on the money-back plan's maturity date. The sum assured and a bonus based on the insurance company's performance make up the maturity benefit.
This plan is better since it pays a fixed percentage of the money assured at regular intervals throughout the policy duration. As a result, you'll have the necessary liquidity and be able to better organize your funds in order to attain various life goals.
5. Returns that are free of risk
The Money Back plan is an excellent alternative for you if taking risks isn't your thing. The best money return policy can be picked because there is no danger.
Money-back schemes are a straightforward and practical approach to save money. They offer a variety of benefits to policyholders that help them preserve financial stability and security in the present and future. For the duration of the policy, you can make monthly payments on the Money Back insurance coverage. The bonus is calculated based on the total amount insured; however, some insurance companies provide additional benefits as an option. The claim comprises the total sum insured, with no deductions for survivor benefits, in the event of death at any moment throughout the insurance period.
Also read-Know Why You Should Consider A Money Back Plan
All About MaxLife Guaranteed Return Plan
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.