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What Makes a Money Back Plan the Best Investment Option?

Published On Jul 25, 2021

If you want to see your money grow over a certain period of time, then investments should be an important part of your financial decision making in order to increase your wealth. As an individual you must have various future goals and to fulfil them it is imperative to have robust financial support. Thus, to build your corpus, it is significant to invest your savings in several investment tools which can assist your money to gradually grow over time.

What is a Money Back Plan?

A money back plan is a kind of life insurance plan that assists the insured individual to receive a percentage of sum assured at routine intervals during the overall policy duration and once the policy matures, they would be entitled to get the entire sum assured alongside the bonus. A policyholder can buy a money back plan for a specific time period and for which they need to pay premiums periodically. If something unfortunate happens to the policyholder then the nominee would get a lump sum amount known as death benefit. It also provides the option for add-on covers or riders to add an additional protection layer.

Why are Money Back Plans a Popular Investment Option?

Highlighted below are a few points that makes Money back plans a popular investment tool:

  • Regular Income

    Money-back plans provide regular payouts to the policyholder during the plan tenure. It is referred to as ‘survival benefit’ and is a pre-decided sum assured percentage. This predefined amount is paid periodically till the time of plan maturity. The key benefit of this feature is that the policyholder is able to meet their regular financial needs without waiting for the policy to mature.
  • Insurance Coverage

    A money back policy offers the policyholder both insurance coverage as well as assured returns in a single policy. In the venet of your untimely demise, the plan would offer your loved ones with insurance coverage and help them in meeting their financial obligations in your absence. And the best thing about money back plans is that the nominee would receive the entire sum assured irrespective of the amount you get in the periodic payouts.
  • Low Risk Investment

    Money back plans are said to be low risk investments in contrast to stock investments or mutual funds. Generally, financial investments such as mutual funds, stock markets, etc involve a higher degree of risks because of their volatile capital market conditions, while this is not the case with how money back plans function. Therefore, individuals having a lower risk appetite can definitely consider purchasing these investment cum insurance tools.

At the End

After going through the afore-mentioned points, there is no doubt about the fact why money back plans have become the most sought-after investment options amongst investors .To simply state, a money back plan offers dual services, one is helping your loved ones in meeting their financial goals even in your absence and the other one is the feature of regular pay-outs that assist you in meeting your financial commitments at different phases of life.

Also Read: Reasons to Purchase a Money Back Plan

Difference Between Money Back Plans and ULIPs

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.

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