Why Should One Buy Money Back Policy?
Updated On Jan 17, 2022
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A money-back plan is a sort of endowment plan that falls under the umbrella of insurance. The insured receives money back through money-back policies at regular times. These plans pay out a percentage of the sum assured on a regular basis during the course of the plan's life. They pay survivor benefits throughout the period and at maturity, as well as the remaining sum assured and vested bonuses. However, if the insured dies within the plan's term, the entire sum assured is paid, even if the survivor benefits have already been paid. Purchasing Money-Back coverage is a safe bet for all of these reasons. To discover more about these topics, keep reading!
Benefits of Purchasing a Money-Back Policy
The following are some compelling reasons to consider purchasing a Money Back plan:
Guaranteed Returns with a Money-Back Plan
Money-Back policies outperform market-linked plans due to their assured returns. Everyone seeking a low-risk investment should think about a Money-Back Guarantee. The insured must live in order to be eligible for a Money Back Guarantee. The nominee receives the guaranteed money as well as any earned bonuses if the policyholder dies.
Benefits of Survival
A money return plan pays you a percentage of the amount insured on a regular basis when the insurance is in full force. You will be eligible for maturity benefits as well as any applicable incentives if you finish the whole insurance term.
Throughout the policy's term, the insurer pays a certain percentage of the money insured at regular intervals. This allows you to get the money you need and better handle your finances so you can achieve your varied life goals.
Profits with No Risk
A Money-Back plan is an excellent alternative if you're wary of taking risks because it doesn't force you to do so. If the insured lives, the insurance assures a profit. The nominee receives the set sum as well as any accrued bonuses if the policyholder dies.
Getting a Tax Break
In addition to other benefits such as the death benefit to which your nominee is entitled in the event of your sudden or accidental death and the maturity benefit to which you may be entitled if you complete the term, you may be able to claim incentives and tax deductions under Section 80C of the Income Tax Act of 1961.
The life guaranteed can choose from a number of supplementary riders or add-ons to cover parts of their life that are not already covered by the plan. These extra rides could be claimed as a tax-deductible expense.
A Money-Back policy is suitable for risk-averse individuals who desire the added benefit of saving money through insurance while still having plenty of cash on hand. If the insured passes away, the insurance company pays the nominee the entire sum guaranteed, with no deduction from the survivor benefits.
You may also like: How Are Money Back Plans Different From Endowment Plans?
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.