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What Are Money-Back Plans?

Published On Mar 01, 2021 12:00 AM By Shrida Gulati

There are various types of life insurance plans and one of them is the ‘Money-Back Plan’. This is a unique life insurance plan which provides money-back at regular intervals of the life insurance policy term. Periodical pay out of the money from these money-back plans can help you and your family stay financially protected at every stage of your life. Read below to learn more about the Money-Back life insurance policies.

What is a Money-Back Life Insurance Policy?

Money-back life insurance plans pay back the money invested in the plan at regular intervals during the policy tenure. The money-back amount is equivalent to a certain percentage of the sum assured. These periodical pay outs are known as survival benefits. The periodical pay outs are made during the policy term and at the time of maturity the rest of the sum assured is paid out with bonuses.

How Does a Money-Back Life Insurance Policy Work?

The policyholder of a money-back life insurance plan receives a survival benefit amount at different stages of the life insurance policy. In case the policyholder dies during the policy term, the sum assured is paid to the nominee even after the policyholder has already received periodical survival benefits.
The amount of survival benefits are calculated as a pre-decided percentage of the total sum assured. Survival benefits are paid out at a fixed interval. If the money-back life insurance policy matures, then sum assured is provided to the policyholder after deducting the periodical survival benefits. In case the policyholder passes away during the policy term even after receiving the periodical survival benefit the total sum assured without deducting the periodical survival benefit is paid to the nominee.
Money-back life insurance policies are usually participating plans wherein the policyholder receives some bonuses at the time of maturity along with the total sum assured.

You May Also Like To Read:- Benefits of Purchasing Money Back Life Insurance Plans

Features and Benefits of Money-Back Life Insurance Policy

Following are the features and benefits of money-back life insurance plans:

Income During the Policy Tenure (Survival Benefits)

Money-back life insurance plans are known to provide some percentage of the total sum assured during the policy term in regular intervals. The amount received on the regular intervals can act as an income source for the policyholder and his/her family members.

Maturity Benefits

On the maturity date of the money-back life insurance plan, the policyholder receives the total sum assured and the accumulated bonus after deducting the amount received on the fixed intervals during the policy term. The maturity benefit consists of the sum assured along with the accumulated bonus.

Death Benefits

Under the money-back life insurance plan, if the policy holder passes away during the policy tenure the nominee will receive the total sum assured, even if the policyholder has already received periodical amounts on fixed intervals. The death benefit consists of the total sum assured amount along with accumulated bonus, no deductions of amounts paid earlier on fixed intervals is made on the total assured to be paid out to the nominee.


Money-back plans are usually participating life insurance plans where the insurance company provides a bonus amount as a pre-decided percentage of the total sum assured amount, to the policyholder. The bonus is provided to the policyholder depending on his regular premium payments.

Additional Riders

The policyholder can choose to opt for additional riders such as critical illness rider, accidental death rider etc. to enhance the coverage of their money-back life insurance plan.

Also Read:- LIC Money Back Plans

Reasons to Purchase a Money Back Life Insurance Plan


Money-back plans are considered as a very unique plan. With multiple features these types of life insurance plans provide survival benefits, maturity benefits, and death benefits along with accumulated profits. It is a best plan to invest in if one wants to grow his/her corpus and have an income source as well. Most people invest money in a life insurance policy to have financial support at every stage of their money-back plan have proven to be most useful plans considering that it provides survival benefits at fixed intervals.

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