Why Would You Buy Money-Back Policy?
Updated On Jun 15, 2022
Table of Contents
Money-Back plans are a type of life insurance policies that assure the life of the person in whose name the plan has been taken up along with helping them accumulate an assured sum of money. Under this policy,when a specified time elapses, the person gets monthly benefits such as survival benefits,maturity and also death benefits i.e. the life of the person is insured under this plan.
This policy is not only a kind of investment but also an insurance plan that guarantees returns at regular intervals and also provides survival and death benefits to the insurer.
Why Would You Buy A Money-Back Policy?
Some of the ways which prove that money-back policies are a good plan to invest into. These ideas have been listed below:
1. Provides Liquidity At Regular Intervals - The biggest advantage of the Money-Back Policy is that according to this policy ,regular payouts called the survival benefits are provided to the insurer.The remaining benefits are paid at the time of maturity and in case if the insurer dies before paying the entire investment amount , the policy provider takes care of the family and provides death benefits to the family of the insurer.
2. Additional Benefit – Some money back policies may also offer additional benefits in form of Guaranteed Additions to the policy or extra money backs.
3. Tax Benefits - Money-Back policy enjoys tax advantages for the premium paid and the maturity funds received from a life insurance policy under Sections 80C of the Income Tax Act of 1961 .
4. Secured Investment - These investments are secured because the returns are guaranteed and are not subjected to any kinds of change,regardless of any government infringement or market conditions. There are no re-investment risks; whatever the insurer might have committed to you on paper will be paid out at maturity, guaranteed. Hence it protects your money and reduces the overall risks of your portfolio.
5. Low-Risk Instrument - Unlike investment strategies and plans such as mutual funds, bonds, and other instruments that are directly influenced by the movements in stock markets, Money-Back Policy provides guaranteed returns at specified intervals during the tenure, making it a low-risk instrument .
6. Life Coverage - It is a kind of life cover that lets you choose from a wide range of options to meet the monetary requirements of the family even in case of death of the insurer before paying the full amount before maturity. This plan lets the family live a dignified life even in your absence.
7. Unique Benefits- The Money Back policy provides various benefits like death benefit, maturity benefit and survival benefit along with bonus which is paid in addition to the sum assured. This bonus from the insurance company is based on its performance.
Conclusion
It is highly essential to invest money in the right way and money-back policies is the best way to secure your savings of today and also insure the future of the insurer and his family and this makes it suitable to be bought.
Also Read: Why Opt for Money-back plans - A Guide
