Are Money Back Plans Worth Investing In?
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Money-back plans offer protection for the financial interests of your family from circumstances like death or critical illness. A true mix of insurance and investment, money-back plans are one of the most popular life insurance plans in India. Under these plans, you as a policyholder will receive frequent payouts on survival. A money-back plan is ideal for people who expect a guaranteed return on their investments and are looking for regular payouts apart from an insurance cover for themselves the money they are putting in is considered a premium. Simply put, unlike a standard life insurance plan, a money-back plan gives money at regular intervals, paid during the policy tenure, calculated as a percentage of the sum assured.
Now the question arises-are money back plans productive? Yes, they are. Read how.
Top Benefits of Money Back Plans
Money-back plans are one of the best savings plans that one can count on. Following are the reasons why they are worth investing in:
1. Provide Survival Benefits
Unlike regular life insurance plans that provide you benefit only on maturity, a money-back plan offers ‘survival benefit’ during the policy term. The survival benefit is given after a few years from the start of the policy term and continues until the policy gets matured. As the name suggests, survival benefit is a reward that an insurance company pays to the insured individual for surviving. Apart from this, the maturity benefit is also provided, along with accrued bonus.
2. Liquidity
The policy pays a certain amount of sum assured at regular intervals during the policy term. This helps you get the required liquidity for which you can plan your finances better to meet different life goals.
3. Provides Risk-Free Returns
If you fear taking risks, then a money-back plan is an ideal choice for you as it does involve any risk. The policy offers guaranteed returns if the policyholder survives. But in case the policyholder dies, then the nominee gets the sum assured and accrued bonuses if any.
4. Tax Saving
You can avail of tax benefits on the premium paid-for money-back plans, under Section 80C of the Income Tax Act, 1961. Note that the benefits can be availed for up to a specific limit if the premium is less than 10% of the sum assured.
Conclusion
A money-back policy is suitable for risk-averse individuals who want a dual benefit of saving through an insurance plan as well as maintaining high liquidity throughout. In the misfortune event of the death of the insured, the policy pays the nominee the entire sum assured without any deduction from the survival benefits. So, invest in one now!
Also Read:
Which Are The Best Money-Back Insurance Plans In India In 2021?
Term Insurance Plans Vs Money Back Plans
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.
