Money-Back Insurance Plan
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About Money-Back plan
Money Back Plan is a special type of life insurance policy that falls under Endowment Plans. In Insurance language it is called Anticipated Endowment Plans and commonly known as Money Back Policies.
Thus, a Money Back Policy is an endowment with a liquidity benefit. This policy is suitable for risk-averse individuals who wish to save through an insurance plan and also maintain liquidity throughout. It simply means that in Money Back Plans, the money comes back to the Life Insured after a specific interval of time as Survival Benefit, the insured person gets a percentage of sum assured at regular intervals, instead of getting the lump sum amount at the end of the term, The remaining bit comes as Maturity Benefit at the end of the policy term. However, if the Life Insured dies during the policy term, then the Death Benefit would be paid to the nominee and the policy would be terminated and no further money would be paid to him on the intervals.
How does money back insurance plan works?
In a money back plan you keep getting the percentage of sum assured during the term of the policy. It is beneficial to meet the financial obligations at a point of time when you need money, rather then waiting for the full policy term to receive the returns. However the returns are not market linked since they invest in asset classes which will yield low but fixed returns.
Features of Money Back policy
- These are low-risk savings options that provide insurance coverage as well.,
- It is often referred to as a source of regular income in the form of Survival Benefits.
- In case of the policyholder’s demise during the policy term period, the entire sum assured is paid to the nominee.
- Guaranteed Returns from Money back policy
- Income during the lifetime of the Money Back Plan
- Income on the maturity of Money Back Plan
- Bonus amounts help increase payout in a money back policy
- Add on riders available for the insured to increase their cover
What are the benefits of the money back policy?
- Money Back Insurance Policies help us to plan our finances in a very systematic way by guaranteeing a regular flow of income at fixed stages in our lives. By providing an insurance cover, a regular income, tax benefits and bonuses, Money Back Plans serve as a secure and safe investment decision. These plans are very good for conservative investors who are looking for good returns but with an element of guarantee and above mentioned benefits.
- A Money Back Insurance Policy can be used effectively to plan for your child’s higher education or marriage, purchase a car or even to pay the down-payment for your dream house. By investing small amounts every year, you can be rest assured that you will receive a large sum of money every 5 years. It works like your small piggy bank in which you keep making small investments. These plans at times also offer Guaranteed Additions and Annual Bonuses which add to the money back amount every year. All these benefits, along with the Tax Benefits make it a great insurance + investment tool to have in your portfolio.
- Limited premium paying term of 8, 10 or 12 years.
- Guaranteed Income every year for a period of 8, 10, 12 or 15 years.
- Financial Protection against untimely demise, throughout the premium payment term as well as the payout period.
- You can opt for hassle-free issuance on the basis of a Short Medical Questionnaire eliminating tedious medical tests.
- Income during the death of the insured person in a Money Back Plan.