Money-back plans are the insurance plans that provide investment opportunity along with money-back provision. That is, you are eligible to get your funds back you paid towards your investment insurance plan in a systematic manner.
Simple Reasons to Buy Best Money-Back Plan
• It provides facility to avail funds in pre-set intervals during the term of the policy as survival benefit
• It provides death benefit without deducting the parts of sum insured that have been already paid during the survival of the policyholder
How Does Money-Back Plan Work?
When you want to buy a best money-back policy you are required to choose a term for your policy. Money-back plans often come with the option of choosing premium payment term as well. Once you determine the sum insured amount and the premium payment term, you insurance company will calculate the premium amount to be paid. You are required to pay premium for the term chosen by you, once this period is over, you are eligible to receive guaranteed payouts, which would be nothing else but parts of the sum insured. (Terms and conditions to pay premium and receive pay-outs vary company to company). These payouts are termed as survival benefits. On the maturity of the policy you would receive the maturity benefit i.e. remaining sum insured amount and bonus accrued and/or guaranteed addition, if any.
In case of the death of the policyholder, the nominee is eligible to receive the entire sum insured amount plus bonus accrued and/or guaranteed addition, if any. This payout is termed as death benefit. Death benefit is paid without deducting the parts of sum insured that have been paid when the policyholder was alive.
Money-back plans are suitable for those people who want to avail large funds for a specific purpose at set intervals of time. Through the plan, the policyholder is able to save for important events or goals of his life or to make substantial purchases after specific period. For the same reason, money-back plans are often termed savings cum insurance plans.
Benefits of Guaranted Money-Back Plan
• The plan returns you your money back paid as premium
• It provides benefits of insurance, savings and investments all at the same time
• Policyholder is able to get funds at the pre-determined intervals of time (survival benefits)
• It provides the opportunity to make purpose-based investments i.e. you save and invest according to your goals
• It provides maturity benefits i.e. the sum insured remaining after paying out survival benefits and the guaranteed additions and bonus, if declared or committed to be paid by the insurance company
• It provides tax benefits. You can save up to the limit of Rs 1,50, 000 by investing your funds in money-back plans or any of the insurance products
• You have the liberty to choose the premium payment term along with the policy term. That is, you can determine the time period or number of years for which you want to pay premium
• You can choose the premium payment frequency i.e. the number of times you want to pay premium in a year – annually, half-yearly, quarterly or monthly installments
• You can acquire a loan against your money-back plan after you are eligible to surrender the policy