Here’s You’re A-Z Guide on Money Back Policy
Money back policy is one of the most popular insurance policies in India. Under this policy, the policyholder can receive regular pay-outs as the death benefit if they survive the policy term. A money-back plan covers both insurance and investment components. This plan is ideal for you if you want guaranteed returns on your investments and are looking for regular pay-outs along with an insurance cover.
A standard life insurance policy only pays at maturity. In contrast, a money back policy provides regular pay-outs in the form of ‘survival benefit’ after a few years from the start of the policy. This is a benefit that is payable only if the insured is alive. In case of the unfortunate death of the insured, the maturity amount is paid to the nominee.
Features of Money Back Policy
Money back policy is a great investment option for risk-averse people who are looking for a safe and secure cover with guaranteed returns. This plan comes with many such features. Let us look at a few of them: –
A money back plan is perfect for you if you are looking for a safe investment option. Under this plan, the money is returned to the insured as a survival benefit after a certain period. The returns are guaranteed if the policyholder survives. In the event of the death of the insured, the nominee receives a fixed amount along with the bonuses.
Income During Policy Term
With a money back policy, you can ensure guaranteed returns. The accumulated survival value can provide you with an alternate source of income. You may use these funds to spend on a vacation, save for an unexpected event, or pay for your child’s education.
Income on Maturity
This plan also works like a regular insurance cover and pays the sum insured or the maturity amount at the end of the policy term. A lot of insurance companies offer a limited sum insured, while others may offer a ‘no limit’ sum insured as well.
Most insurance companies offer add-on riders under their money back policy. Using these riders, you can enhance the coverage of your money back plan. Riders may include critical illnesses, accidents, or term riders.
A money back policy can help contribute to your income in the form of bonuses. Every year, your incentives will be calculated as a percentage of the sum insured and will be accumulated over time. At the time of maturity or if the policyholder passes away, the bonus amount is added to the total due payout.
Benefits Under Money Back Policy
A money back policy is a complex life insurance plan compared to other insurance plans. To understand this plan better, let us look at the key benefits provided under this policy: –
Under this benefit of a money back policy, money is paid to the policyholder over the course of the policy. This payment starts after a few years from the start of the policy and ends with the end of the policy term. Insurance companies usually break up the payments as a percentage of the sum insured and spread them across the policy tenure.
In the event of the death of the life insured, the nominee receives the death benefit. It includes the sum insured along with the accumulated bonuses on the money back plan. Please note that it does not include the survival bonus, which is only paid out until the insured is alive.
Under a money back policy, the maturity amount is paid to the policyholder when the plan matures. It includes the sum insured and the bonuses. The sum insured is the total cover amount and the bonus revisionary benefit that is accumulated over time. The bonus largely depends on the company’s performance.
Under this plan, you are eligible for tax deductions up to Rs. 1.5 lakh on the premium paid under section 80C of the Income Tax Act of India. Also, under section 10 (10D) you can avail of tax exemptions on the maturity benefit.
A money back policy can help protect your family’s financial future from uncertain circumstances such as accidents, critical illnesses, etc. Once you know ‘what is investment?’, you can understand that a money back plan can help create wealth by offering regular pay-outs. With a lot of options available in the market today, choosing one can be confusing. You can consider buying a money back policy from a trusted brand like Max Life Insurance. They offer this plan at an affordable premium and with extensive benefits.