What is the money-back policy?
Money back policy is a famous insurance policy offered by the Life Insurance Corporation. As the name suggests, the money-back policy gives a percentage of the assured sum back to the insured person at regular intervals. Money back policy does not return the money to the insured person in lump sum amount at the termination of the policy or term.
The payouts, also known as Survival Benefits, are paid during the tenure of the plan. They are calculated as a percentage of the sum assured. Different methods have different payout structures.
Why shall I even choose a policy?
Life is very unpredictable. Hence, one must be prepared to face any atrocity that may befall them. Investing in a money-back policy provides financial security to your beloved in case of the occurrence of an unfortunate event. It gives us the confidence to overcome tragic events and helps us sustain our goals like education, the marriage of children, etc.
What benefits does one get if one opts for the money-back policy?
The money-back policy gives you various benefits. The most prominent are –
- Death Benefit
- Guaranteed Maturity Benefit (GMB)
- Survival Benefit
Besides, it also gives you an additional bonus on the sum assured, the amount of which depends on the performance of the company.
What are the key benefits of a money-back policy?
Money-back policies offer a wide range of facilities which have always rendered them important to people from all backgrounds.
- It gives you the assured sum and secures the life of your loved ones: In case of the unfortunate demise or any other accident of the insurance holder, this policy allows their nominee to get the lump sum. This helps them cover the expenses of any unforeseen event and helps them sustain a financially secured life. The Survival Benefits which one gets after the maturity of the policy can be used to satisfy their or their family’s aspirations.
- Has a low-profile risk: Other forms of investments like mutual funds etc. are subject to the fluctuations of the market thus, are quite risky. On the flip side, money-back policies are safer. It is more dependable as the returns at regular intervals are guaranteed. This allows you to try out other volatile and nonvolatile investment policies by countering the risk factor.
- Provides tax benefits: The insurance holders get tax benefits under the
Section 80C of the Income Act, 1981. However, there are some conditions applied.
- Gives additional bonuses and ensures returns within a few years of investment: On maturity, the investors get a bonus which increases the overall payout and helps one to fund their life goals. They act as a regular source of income by providing a continuous stream of money at regular intervals.
- Pay the premium according to your choice: There are multiple payment options one can opt for like- the Five Pay Option, the Seven Pay Option, or the Ten Pay Option as per your convenience.
If one has a low-risk appetite, investing in money-back policies is the best option for them. It gives your guaranteed returns and a life cover that safeguards the future of your loved ones besides giving you liquidity. Hence, it is wise to invest in money-back policies.
You can visit these sites to learn more about money back policy.