Can I Get My Insurance Premium Back Under A Money Back Plan?

Money Back insurance is intended to safeguard your family's financial interests in the event of your death or serious sickness. Money Back plans are one of India's most popular life insurance products since they incorporate insurance with investing. You will be compensated every month for your survival as a policyholder under these policies. People who want a guaranteed return on their investments, monthly payouts, and insurance coverage for themselves may consider a Money Back plan; the money they put in is known as a premium.

Can I Get My Insurance Premium Back Under A Money Back Plan?

Money Back plans simply mean that money is returned to the life insured as a survival reward after a set period of time. The Money Back is contingent on the policyholder's survival. In the event of the policyholder's death, the nominee receives the sum guaranteed as well as any earned bonuses, if any. While receiving your insurance money refunded may seem enticing, there are some disadvantages. Check out the benefits and drawbacks of a return-of-premium in the Money Back plan 

Advantages 

• Unlike ordinary term insurance, you get your money back if you outlive your policy term.
• The money you get back isn't taxed since it's not income, but rather a refund of the payments you paid.
• Make all of your payments on time and don't cancel your policy if you want a guarantee that you'll get back the money you spent in premiums. Otherwise, your policy's return-of-premium may not be paid out at the conclusion of the term.

Disadvantages 

• The money that is returned to you does not accrue interest.
• To get your money back, you usually have to keep the insurance for the whole period and make all payments.
• Depending on the policy, you may not receive any money back if you cancel your insurance before the end of the term – or simply stop paying.

Return-Of-Premium In Money Back Policies Differ Depending On The Insurer

Return-of-premium insurance might be complicated by certain insurers, so be sure you read the fine print. Some return-of-premium in-kind insurance, for example, accumulates "monetary value" over time. The cash value can be used to take out loans or withdrawals. If you don't return the loan, the amount taken out will be deducted from your death benefit (if you die) or your money back (if you don't die). It's also likely that you'll get paid less than you anticipated. Any additional riders you have, like as an expedited death benefit, may be deducted by insurance providers.

Conclusion 

Also, before you buy in a money back plan, compare and analyse your options. A good money back plan should have a low risk, predictable returns, and a tax advantage. Experts advise picking a Money Back plan that fits your payment while also meeting your financial requirements. You can put the money you don't spend on the return-of-premium benefit into an interest-bearing savings account or use it for something else. If you don't spend the money and instead let it grow, you'll finish up with more money than if you merely received your premiums back plus interest.Make all of your payments on time and don't cancel your policy if you want a guarantee that you'll get back the money you spent in premiums. Otherwise, your policy's return-of-premium benefit may not be paid out at the end.

Also read: Are Money Back Plans Worth Investing Your Money In?

Common Exclusions Under A Money Back Policy

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.