What Are The Advantages Of Money Back Policy?
Updated On Jul 07, 2022
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A money back insurance policy is a life insurance policy that helps you secure your life while aiding you in building some wealth out of it. The money back plan allows the insured to receive some proportionate amount of the total sum insured in a few regular intervals and the remaining amount during maturity. The money received in regular intervals helps the insured build some wealth or use the amount for any emergency.
In simpler words, unlike a standard life insurance policy, which provides you with the total amount insured in a lump sum after the policy matures, the money back insurance policy gives you returns during the tenor of the policy in equal amounts and regular intervals.
Advantages Of Money Back Plans
Here are a few pointers stating the benefits of a money back insurance policy
Survival Benefits
The benefits given to every insured surviving individual; at regular intervals throughout the policy tenor.
For instance, someone has chosen a money back policy with a sum assured of 10 lakhs for 20 years. He will have to pay the premium for 20 years, and he will keep receiving the return at regular intervals. After the 5th, 10th, and 15th years of the policy tenor, he will get 15% of the sum insured. As a result, before the policy matures, he will get 45 per cent of the total sum assured. At maturity, the remaining 55% will be paid to the insured.
Maturity Benefits
The benefits paid to the insured at maturity. These benefits include:
Sum Assured – The remaining amount of the total sum assured after providing the insured with the returns over the period of the policy
Bonus – The extra money paid to the insured by the insurer at maturity. It mainly depends on the performance of the company.
Death Benefits
The benefit provided to the nominee after the policyholder dies is known as death benefits.
It includes the total sum assured and the bonus accumulated on the policy. However, no survival benefits are given to the nominee because only the policyholder is entitled to earn survival benefits. To understand it better, consider someone who has a money back insurance policyholder who died in the 16th year of the policy. Hence, the nominee, and his wife will get the total sum assured along with all the bonus accumulated over 16 years.
A money back insurance policy is one of the famous insurance plans in India. With guaranteed returns and amazing benefits, a money back plan is surely one of the top choices of individuals.
Conclusion
Money back insurance works for an investor looking for assured returns with the potential for growth at times in their lives to cover large expenses that may come in the future. However, there are a few things to consider before deciding on buying a money back plan.
Also Read: What Are Money Back Plan Tax Benefits?
