What Do You Need To Know Before Buying A Money Back Policy?
Updated On Apr 26, 2021
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A Money Back Policy is a type of insurance policy that is primarily characterised by its ability to let policyholders gain access to their funds in the middle of the policy term. Most insurance policies, although beneficial, give a hard time to policyholders in times of sudden needs to access funds. Money Back policies help in this as it pays out to the insured, in regular intervals. This also makes them more sustainable and a great savings instrument.
Read More: Tips to Choose Best Money Back Plan
Features of A Money Back Policy
The following are a few of the most important features of a Money Back Policy. They make these policies unique and beneficial.
1. Survival Benefits
Money Back Policies pay out Survival Benefits at regular intervals. It is calculated as a percentage of the sum assured under the policy. The exact structure may, however, differ from plan to plan. This feature becomes especially useful because you do not need to liquidate the entire plan if there is any financial crisis. You can simply take advantage of the regular payout from your savings.
2. Maturity Benefits
Besides a regular payout, a money back policy also pays out a Maturity Benefit at the end of the policy term. Not only do you get regular access to savings but also a collective amount at the end of your insurance policy. The maturity benefit paid out is equal to the sum assured that remains after the survival benefits are paid out.
3. Death Benefit
Under a Money Back Policy, there is a death benefit payout in case the policyholder dies before the end of the policy term. This benefit is equal to the total sum assured under the policy, regardless of what has been paid out as Survival Benefits.
4. Bonuses
Bonuses are available on Money Back Policies. They are accumulated throughout the policy term and are paid out collectively with the maturity or death benefit.
5. Rider Benefits
Riders are low-cost additions to your basic Money Back policy that will enhance its protection and features. They provide extra coverage in special circumstances that demand more costs than usual. They can be added to your money back policy and are paid out in lump sum at the time when the situation satisfies its conditions. It is available only when the plan is in action.
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