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Why a Money Back Plan is the Best Investment Option?

Published On Aug 28, 2021

A money-back plan is a type of life insurance policy wherein a policyholder instead of receiving a lump sum amount towards the end of the policy tenure is entitled to get some portion of the amount at regular intervals. The amount that a policyholder receives at regular intervals is referred to as Survival benefit and the leftover amount that can be obtained by them towards the end of plan tenure is known as maturity benefit. One of the important features of the money-back plan is that it is a low-risk investment option and helps in getting benefits at regular intervals.

Advantages of a Money Back Plan

Some of the advantages offered by a money-back insurance plan are as follows:

  • Insurance Coverage: A money back insurance plan offers you a dual advantage as they act as both an insurance product as well as an investment tool. If something happens to the policyholder, the beneficiary would get the sum assured irrespective of the regular payouts that the policyholder has been getting periodically.
  • Maturity Benefit: During the end of the policy duration, the policyholder receives this sum which is the left over amount after paying the Survival benefits from the overall sum assured.
  • Survival Benefit: A policyholder would receive money in regular intervals over the duration of the plan. After the plan has been bought, after paying a premium for a few years, the policyholder starts receiving this amount which is referred to as Survival Benefit.
  • Bonus: A policyholder receives additional benefit in the form of bonus. A specific percentage of the overall sum assured amount is calculated in the form of a bonus and it starts getting added up on a yearly basis. Once the insurance plan matures or you need to claim a death benefit, the bonus gets added up to the total sum that needs to be paid.
  • Death Benefit: In the event of death of the policyholder, the amount that is received by the beneficiary appointed by the policyholder is referred to as the death benefit. It is the overall sum assured amount without taking into consideration the paid survival benefits. It helps the policyholder in securing his loved ones against any financial problems even in their absence.
  • Tax Benefits: Alongside other benefits offered to a policyholder like death benefit which the beneficiary is entitled to receive in the event of sudden death of the insured and the maturity benefit which the policyholder receives if you survive the plan duration, one is also eligible to get tax benefits as per section 80 C of the Income Tax Act.


A money back insurance plan is one of the most popular investment options amongst the investors because of the benefits offered, liquidity, regular returns, etc. Therefore, in case you have still not invested in a money back plan then do it as soon as possible to secure a good deal.

Also Read: 

Why You Shouldn't Dodge The Idea Of Purchasing A Money-Back Plan?

Are Money-Back Policies Productive?

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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