Understanding the Basics of Money Back Policy
Updated On Jun 21, 2021
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Money Back Plans are the traditional savings cum life insurance plans. Money Back Policy promise you guaranteed returns at continuous intervals during the policy tenure unlike other insurance policies which pay it as a lump sum amount at the time of maturity or in unfortunate circumstances such as death.
Money Back Policy is one of the best investment solutions for individuals looking for a low risk investment instrument. The policyholder can save an amount along with investment to fulfill their short term goals such as education fees, household expenses such as telephone bills, electricity bills, etc. Money Back Policy acts as a protection shield for policyholders and their loved ones during difficult times to meet the financial expenses and essential requirements when the insured is not around.
Money Back Policies contains some special features that set them apart from other policies
Features of Money Back Policy
In this Article we will discuss some important features of the Money Back Policy which makes it different from other available insurance plans -
Premium Payment ModesMoney Back Plan comes with different premium payment modes. Payments of the premiums for issued plans can be paid regularly, for a limited time or at once.
Death BenefitsDeath Benefits are received by the nominee of the policy if in case the unfortunate happens with the insured person. Death Benefits include the lump sum amount as sum assured of the Money Back Policy and the applicable bonus on the policy. But, this benefit does not include survival benefits as they are paid to the insured when they are alive and well.
Maturity BenefitThis benefit is paid to the policyholder on attaining the maturity of the Money Back Policy. Maturity Benefits includes the following components:
- Sum Assured: This is the total amount that is chosen by the policyholder at the beginning of the policy.
- The Bonus: This includes the applicable reversionary bonuses declared by the insurer. But it mostly depends on the performance of the company and obedient nature of the Policyholder during the entire tenure.
Survival BenefitThe regular benefits which are paid under Money Back Plans at continuous intervals during the policy tenure are called survival benefits. These benefits are received only when the insured survives till the pay-out term.
Additional BonusMoney back plans are usually provided as participating plans which offer additional bonuses. Simple or compound reversionary bonuses are two types of Bonuses paid under money back plans. The wholesome bonus is paid either on maturity or death thereby enhancing the benefits of the plan.
RidersAdditional coverage features are called Riders such as Accidental Death and Disability Rider. Riders can avail under Money-Back Plans by paying additional premiums. These riders come as an additional premium and increase the scope of coverage.
Tax BenefitsPolicyholders enjoy tax benefits along with other additional benefits such as rider, loan Facility,etc. Premiums paid under Money Back Plans during the policy tenure, like other life insurance plans, applicable for tax deduction under Section 80C and 10(10D) Insurers enjoy tax-free income in their hands.
Money Back Policy is an ideal investment solution for those who are looking for long term investment with good returns. It is especially beneficial for those who are looking for a low risk appetite along with guaranteed returns at regular intervals during the entire policy tenure. Money Back Policy is an opportunity to create wealth through investment opportunities. Money Back Policy includes customized money back options tailored to policyholder requirements.
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.