Money back policy protect your family’s financial interests from circumstances such as death or critical illness of the policyholder. Periodic payouts create wealth for meeting financial commitments at key stages in life. Here you can carefully research, compare and choose a suitable money back life insurance plan for your needs. Money back plans offer a true amalgam of insurance and investment. Secure your family financially. Money back plans are one of the most popular life insurance plans in India. Under these plans, the policyholders receive frequent payouts as the death benefit, in case the policyholder
survives. These packages include both insurance and investment plans A money back plan is ideal for people who want a guaranteed return on their investments and are looking for regular payouts at the same time in addition to an insurance cover for themselves for the same money they are putting in as premium. Unlike a standard life insurance policy that only pays an amount after the maturity of the policy, the money back plan starts to pay an amount that is called a ‘survival benefit’ over the lifetime of the policy. This survival benefit is given after a few years from the start of the money back plan and continues until the maturity of the money back policy. The survival benefit, as the name suggests, is a reward from the company to the insured individual for surviving. This benefit is only payable if the insured is alive. In case of occurrence of an unfortunate event that results in the death of the insured party, these survival benefits do not accrue any more. In such cases, the nominee(s) receive the whole of the maturity amount, irrespective of how much survival benefits have been paid along with any bonus that may have accrued. Thus, the money back plan offers regular income along with a maturity benefit just like standard life insurance policies.
Let’s assume that the money back policy is of a 20-year policy term and it starts paying survival benefits after 5 years and pays the same every 5 years, and the rest on maturity. In such cases, the insured party would receive a survival benefit in the 5th, 10th and 15th year of the policy and the remainder of the survival benefit at the time of maturity of the policy in the 20th year. This would be in addition to the maturity amount and any bonus, if any. These payments would help the insured individual to pay off major expenses along the way.
Suppose the policy was bought at a time when the child of the insured is around 10 years old. In such a case, the first survival benefit payment at the end of 5 years of the money back policy can be used to pay off the tuition fees if the child is preparing for engineering or medical tests and has taken coaching for the same.
The second payment of the survival benefit received when the child is 20 years old can be used to pay off any fees for post graduation studies. If a suitably large money back policy is taken, then this amount can be used to pay for even foreign education expenses.
The third survival benefit that accrues on the 15th year of taking the plan will be paid to the insured when the child is 25 years old. This amount can be used to pay for wedding expenses of the child. The fourth instalment of the survival benefit will accrue at the 20th year of the money back plan when the insured shall also receive the maturity amount and the revisionary bonus. This amount can be used to fund the retirement years or if the person has already covered himself or herself for retirement, then it can be used to buy a house or pay for an extended holiday. Buying a money back plan with an adequate cover will also mean that the amount received by the employee on maturity will be substantial and can be used to meet a myriad of large expenses. These may include unavoidable expenses like relocation expenses to move back to the hometown after retirement, renovation of the ancestral property, renovation or remodelling the existing house, paying off a car loan, and so on.
In most cases, the maturity amount is a lump sum amount and is paid to the policyholder at the maturity of the policy. The insured party can opt to receive annuities or regular payouts every quarter or every month. Most insurance companies or their financial experts can design policies that would suit the needs of the individual and ensure that they get a money back policy that best serves their future needs. If you are looking for a plan that helps you plan future expenses without you having to worry about the safety or the security of the money invested, then looking at a money back plan may make perfect sense for your needs.
Advantages of a Money Back Policy
A money back plan is one of the best life insurance policies for an individual looking for a guaranteed money return policy. These policies also work out well as the backup policy for aggressive investors who prefer to use the stock and commodities market to increase their wealth.
Moreover, the fact that these policies also offer a guaranteed payout after a few years of investment means that they are offering much better returns than the standard life insurance policies which only pay when the policy matures. These policies also work well as a standard
insurance cover. The nominees receive the money from the sum assured in case the unfortunate comes to pass.
A money back policy is one of the smarter ways to plan your life investment cover. You not only receive money back over frequent intervals of the policy tenure, a sum assured at the end of the policy term, bonus amounts as declared by the insurer but also an adequate insurance cover for the whole of the policy period. In addition, some companies provide the benefit of extending the cover over the whole life of the insured, subject to certain limitations. Buying a money back plan makes sense for an investor who is looking for a cover that gives him guaranteed returns and also returns at certain stages of life to pay for large expenses that may occur in the future. An individual must consider and understand a few things before they opt for a money back plan.