When is The Right Time to Purchase Money-Back Plans?
Updated On Aug 19, 2021
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Money-back life insurance policies offer insurance to life along with maintaining liquidity by providing the life assured with a regular income for risk-averse individuals. They are a variant of endowment plans that also guarantees the return on the investment made by you. Investing is important but investing right plays the main role in a successful investment.
The returns offered on the money-back plans are generally fixed. The customers do not have to worry about the calculation of the returns as the approximate maturity amount is pre-defined to the life assured while buying the plan. Another unique selling point of money-back plans is that apart from providing the life assured with good returns, they also offer them the benefit of life insurance that is usually 10 times the premium paid per year or 120 times the premium paid per month.
The traditional life insurance policies run on the triple taxation formula. Under this, the life assured can enjoy tax benefits on the money they invested, interest on the money invested along with the maturity amount. There is no taxation of the premiums invested. The investment that grows over the years and the maturity benefit also are tax-free or non-taxable. The maturity that the life assured receives once the policy period is over will also be tax-free. There will be no tax on the maturity amount in money-back policies.
When To Buy Money Back Plans?
To effectively avail of all the benefits offered by the money-back plans, it is important to invest right. To help you invest right, here are some ways -
1. Invest Early
Investing early in any life plan gives you more time before you have to fulfill your plans and goals in life. More time means more money pooling. This leads to comfortable investing in life plans without disturbing any other aspect of your life. Investing early means pooling higher amounts of money.
Also read - Who Should Purchase A Money Back Plan?
2. Know How Much You Need
Before buying or purchasing a life insurance plan it is necessary to determine the amount of money you will need at the end of the duration of the policy term. This will help you to effectively invest in a life insurance plan and comfortably fulfill your life goals. In the plan, you will receive regular payouts after a certain time period to help you fulfill your goals. You need to choose a plan that can provide the amount of financial support you require by comparing different money-back plans offered by different insurers while considering all the factors of your life.
3. Necessities of Your Beneficiary
A beneficiary is an important part of a life insurance plan. They are usually your family members or those who depend on you financially. Before committing to a plan, you must know how much financial support they will require when you are not around. It is advised to start as soon as you have a dependant. Since money-back plans are life insurance plans, they provide you with death benefit where the nominee will receive a sum assured on death in case the life assured happend=s to pass away.
4. Pre-Planned Life Plans
Before you invest in a life insurance plan like money back where you are financially supported from time to time to help you fulfill your short-term or pre-defined goals, you must know how much money they will require. You must invest in a plan that can offer you the financial support you require in time. You must know what exactly you will need to fulfill your life goals and save for them.
It is advised to invest as early as you can to get the most of your investment. Investing at least as soon as you gain dependents will help you gain better.
You may also like to read - How does a money-back plan work and why should I purchase it?
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.