Money Back Plan is the insurance plan with flavor and benefits of investment clubbed with Life Risk Coverage.
There, in the money back plan of insurance industry, there is regular periodic payouts as survival benefits, in form of percentage of the Sum Assured instead of the lump-sum payout at the maturity. It helps the insurer to fulfill his needs time to time. It’s the best way to have insurance coverage along-with the liquidity benefits.
Money back plan is appropriate for insured who want to have insurance plan without blocking their money for very long period and also enjoy the liquidity through the term. In case of death of insurer, his/her nominee will get the death benefits in full without deducting the survival benefits, already paid to insurer.
In money back plans, insurer get back funds at regular intervals and can be utilized for child education and etc. Money Back Plans are more popular in the industry as they provide dual benefits to insurer;
- Survival Benefit – Normally 20% of Sum Assured guaranteed as money back every interval and bonuses at maturity
- Death Benefit – Survival Benefits till the insurer is there, then-after entire Sum-Assured given to Nominee.
The term of money back policy could be 20 or 25 years, but in newly launched plans, there is option with the insured person to choose the policy term as per his/her needs, and you can choose the term between 9 years to 21 years too with great guaranteed returns, you may contact me for further information.
If we, compare the plan with any other financial tool, it may be slightly down in returns but its insurance coverage can’t be compared with other non-insurance financial tools. It’s ultimate plan, if taken in early age of child or self.
It also provides benefits of Income Tax Act Under Section 80(C) and Under Section 10(10D).