Who Should Buy A Money Back Policy?
Updated On Jul 04, 2021
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Many of us want to invest in a long-term traditional life insurance plan to create a guaranteed corpus. But this may lead to a problem in case one requires funds before the policy term. A financial issue may arise anytime, but it can be solved if you have adequate funds in hand. Which is not always the case in traditional life insurance plans as they are of help only once the tenure is over. Taking a loan is an option but it might be limited in amount. Then what else? Is there any plan that offers you benefits during the plan tenure itself? Yes, there are- Money Back Plans.
What is a Money Back Policy?
A money back plan is a special type of insurance plan that falls under the category of endowment plans. Under money back plans, the insured gets money back at regular intervals. These plans pay the percentage of the sum assured regularly through the plan tenure. They pay survival benefits during the term and at the time of maturity, and the remaining sum assured is paid along with vested bonuses. But the entire sum assured is paid in case the insured dies during the plan tenure, no matter if the survival benefits were already paid.
Who Should Buy a Money Back Plan?
Money-back plans are most suitable for those who want to make investments through low-risk investments, for those who want both wealth creation and life insurance cover, those who expect good returns from investments, and for those who want to get paid during the policy tenure to meet different requirements. These plans are a preferred choice especially for people who need money at regular intervals like a child’s education, etc. People also use these plans as a tax-saving instrument. So, you can also buy these plans if you need to save tax, under Section 80C of the Income Tax Act, 1961 on the premium paid for them.
Eligibility to Buy Money Back Plans
To buy the best money-back plans in the market, you must check the eligibility criteria first, as per the policy wordings. Note that you cannot extend your money-back policy beyond the maximum age limit. Also, you must adhere to the premium payment term and mode for these plans.
Documents Required to Buy Money Back Plans
Following are the documents that are required to buy a money-back plan:
- Income proof-Salary slips, bank statements, income tax returns, etc.
- Address proof-Driving License, passport, aadhaar card, voter’s id, etc.
- Id proof-PAN card, voter’s id, aadhaar card, etc.
- Age proof-Aadhaar card, passport, voter’s id, driving license, etc.
To save yourselves from getting financially blown in case things go south in the future, you must own money-back plan now. It helps you build a corpus for your growth as well as prosperity. The reasons to invest are many, like a child's education, investing in the business, and so on. So, it is a wise choice to have a plan now that you can count on later.
You May Also Like To Read: Steps To Buy Money Back Insurance Plans Online
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.