Benefits of a Money Back Plan

A money back plan is a kind of life insurance policy that offers dual benefits of insurance cover as well as investment. These insurance plans provide you with money at regular intervals and provide a lump sum amount in the event of an unforeseen incident. Also, these insurance plans offer you guaranteed survival benefits through the policy term and upon maturity. It offers you with more liquidity as compared to any other type of life insurance plan.

Benefits of a Money Back Plan

A money back insurance plan offers several advantages. This is the reason why these are the most sought after insurance instruments for different investors. Highlighted below are some of the benefits of a money back insurance plan:

• Offers Sum Assured

The nominee of the insurance plan receives a lump sum amount known as sum assured in the event of death of the policyholder. This amount can be used in covering varied expenses by the family members of the policyholder and allowing them to live their life without any financial instability.

• Low Risk Profile

Investment instruments such as stocks, bonds, mutual funds, equities, etc are affected due to fluctuations in the market. However, with a money back insurance policy, an individual can receive guaranteed returns at regular intervals. Due to the insurance cover and regular income, these plans are hassle free and dependable. In case, you wish to keep your risk appetite low, then it can be an ideal plan for you.

• Offers Insurance Coverage

Although, it is seen as an ideal investment tool, a money back plan also serves as an insurance instrument. You can select an ideal cover that can be useful in meeting the financial requirements of your family members. These insurance plans give a sense of reliability and help your family members in living a dignified life even after you are gone.

• Provides Tax Benefits

The insurance premium payable under a money back insurance plan is allowed for tax deduction as per section 80 C of the Income Tax Act. However, the premium payable needs to be less than 10% of the sum assured of the insurance plan. The sum assured is also allowed tax deduction as per sec 10(10D) of the Income Tax Act, which are subject to the conditions mentioned.

• Offers Return within a Few Years of Investment

This insurance plan acts as a regular source of income. As opposed to a traditional life insurance plan, these insurance plans do not just provide maturity benefits, but they also provide a continuous income stream at regular intervals.

To Sum Up

A money back insurance plan is a perfect choice for you in case you are looking for low risk, a life cover and assured returns to protect the future of your family members. Also, remember to do a thorough comparison of the plans available online before zeroing on a particular plan in order to get a good deal.

Also read 

Why You Shouldn't Dodge The Idea Of Purchasing A Money-Back Plan?

Are Money-Back Policies Productive?

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.