In money back life insurance plans, the insured individual receives a portion of the sum assured at predetermined intervals rather than a lump-sum payment after the period. It is an endowment plan that offers the advantage of liquidity. A death benefit will also be granted under a money-back plan if the life assured passes away unexpectedly.
The sum that is paid as compensation is referred to as the "Survival Benefits." The remaining sum insured is paid at maturity together with any vested incentives, and these are rewarded over the course of the policy term.
What is the nature of a Money Back Insurance Plan?
Let us discuss it with an example to make you understand the money back plan better.
- Suppose you have bought a money back policy; following the termination of the premium payment term, you will start receiving a regular income.
- The guaranteed cash benefit might be received monthly or yearly, depending on your needs.
- You will get a guaranteed sum after the policy period, along with extras.
- If something terrible happens, the life cover under a money back policy will give your loved ones a lump sum payment.
A money back insurance plan is an excellent option for those who don't want to take any chances because it aids in preserving money and maintaining liquidity over time.
Features & Benefits Under Money Back Life Insurance Plans
The most suitable savings plans that you can rely on are the money back plans, and here is why:
- Offers Survival Benefits: A money back policy offers maturity benefits, a percentage of the sum assured (at predetermined intervals), and accrued bonus in addition to survival benefits.
- Offers Death Benefits: The policy's nominee receives the insured person's death payout. This benefit includes the money-back policy's sum assured and any bonuses accrued. However, since the survival benefit is only paid to the insured while they are still alive, this does not include under death benefit.
- Liquidity: In this plan, you get a sum assured at regular intervals during the policy term. As a result, you have the necessary cash and may better organise your finances to achieve various life goals.
- Risk-Free Returns: A money-back term plan is an ideal choice if you are not a risk-taker. The amount of risk associated with the policy is bere minimum.
- Maturity Benefit: On the plan's maturity, you get the sum assured and the bonus associated with the plan. The bonus ideally depends on the company’s performance.
- Add-on Riders: Riders like a personal accident, serious illness, or term rider are frequently recommended for money back plans. Experts advise selecting a money back plan that meets your financial demands while fitting your payment.
How to select a Money Back Policy?
Several factors are involved when choosing a suitable money back insurance plan. You can also search for money back policies online comparison to find what you are looking for.
- Financial Goals
- The number of years to stay invested.
- Payouts variation
- The appropriate amount ensured to satisfy your financial needs
- Check whether the money back policy gives tax advantages. Some policies may not provide a tax advantage if a survival benefit equals 20% of the sum assured.
Eligibility Criteria Under Money Back Policy
To buy a money back policy, you need to fulfil specific criteria, which are as follows:
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Key Areas |
Eligibility |
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Entry Age |
A money back policy may be purchased by anyone 18 years of age and older. The maximum entry age for someone who works for themselves is 65. |
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Method of Premium |
You get to pick the premium payment term and method with a money back policy. |
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Policy Term |
Money back plans often have a 5, 10, or 15-year insurance duration. The policyholder may select the insurance tenure based on their financial situation.
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Income |
Throughout premium payments, the policyholder should be able to make timely premium payments. |
Documents Needed for Money Back Policy
The buying process of any money back policy will not be completed if the following list of documents is missing.
- Age Proof Documents
- Complete Policy documents
- Proof of Address
- Medical Reports(if required)
The life insurance company will ask for these documents when you’ll buy life insurance plan.
Money Back Plan Premium Calculator
According to the policy and sum assured you choose, a premium calculator will inform you how much you would have to pay. This tool can help you arrange your finances effectively and determine how much you should set aside each month, quarter, or year. Before using the calculator, you must know the desired policy and anticipated sum.
The good thing about the term premium calculator is that it is available online. You just need to visit the website and look for the insurance premium calculator tab, and you will get all the relevant details you are looking for. You must enter your age, the length of time you want the policy to last, and your gender into the tool. You can optionally include the available riders in the calculator for more precise calculations.
Are Money Back Plans For You?
Suppose you're a healthy person needing life insurance protection and an investment that provides regular returns while saving you money on taxes. In that case, you can select between various financial products or a single money-back insurance policy that accomplishes the same goal. It's crucial to remember that your investment's risk and potential profits are inversely correlated.
It offers complete life insurance coverage and is a tax-saving investment with guaranteed profits for the term, making it a win-win situation for the investor.
Online Buying Process of Money Back Plans
There are numerous companies providing money back plans with different benefits but, the best way is to buy money back plans online. Follow the steps below to buy the best money back plan for yourself.
Step 1: Visit the official website of the insurance company.
Step 2: Select the “Life Insurance” tab.
Step 3: Select the desired policy and riders at this time.
Step 4: Enter the necessary information and submit the documents.
Step 5: The website will give you insurance quotes.
Step 6: You will be asked to pay the initial insurance premium amount.
Step 7: Insurance policy documents will be sent to your registered email address.
FAQs
Question 1:- What is a money back insurance policy?
Answer:- To put it simply, a money back policy is a form of life insurance that pays the policyholder regularly while covering the death benefit.
Question 2:- Does a money back policy give the policyholder the total amount guaranteed when it matures?Answer:- Yes! In a money-back policy, the policyholder receives the whole amount guaranteed at maturity, regardless of any survival benefits or costs.
Question 3:- What are some of the main advantages of their money-back insurance policy?
Answer:- One of the most important advantages of a money back policy is the death benefit, maturity benefit, and survival benefit. You will also receive a bonus in addition to the sum assured.
Question 4:- Is there a way to transfer my money back policy?
Answer:- No, you cannot transfer your money-back insurance policy.
Question 5:- What distinguishes the survival benefit from the maturity benefit in money back plans?
Answer:- Survival benefits are paid to the policyholder throughout the policy term, which is unique to money back policies. The maturity benefit, on the other hand, is only paid at the end of the policy's tenure. Except for term insurance plans, most life insurance policies provide policyholders with maturity benefits except term insurance plans.
Question 6:- What is not covered by a money back insurance plan?
Answer:- Suicide is the most frequent exclusion for life insurance contracts. Read the policy brochure to get a complete list of exclusions that apply to your plan. It is different for different companies.
Disclaimer - The information published in this article is for the reader′s reference only. The content of this information is to provide an overview of your life insurance needs and should not be relied upon for personal, medical, legal, or financial decisions; you should consult an appropriate professional for specific advice. The Company makes no representations about the suitability, reliability, timeliness, and accuracy of the information, services, or any other items mentioned on this subject for any purpose whatsoever.