How Are Money Back Plans Different From ULIPs?

Unit Linked Insurance Plan is abbreviated as ULIP. These are a mix of insurance and investing programs. The Premium is paid by the Policyholder and then divided into two parts. A portion of the money is used to provide coverage to the insured individual, while the rest is invested in the stock market. The other half is invested in the market, while the other half is used to provide insurance to the insured individual. 

The Risk Factor is there since the investment made through these plans is invested in the market, and the Policyholder is the sole risk bearer. Money Back Plans are a great choice for those who prefer not to take chances and want to have assured returns on their investments instead of dealing with market swings. The Money Back Plans are similar in that they combine insurance coverage with an investment portfolio. Premiums are paid at the insured's specified intervals.

The existence of Survival Benefits, which are a percentage of the Sum Assured and are paid at predetermined intervals so that the insured person can use them in an emergency or save them to create wealth, sets this plan apart from others. We'll examine and contrast Money Back Plans and ULIPs in this post.

The Benefits of ULIPs

The following are some of the characteristics of ULIPs:

1. ULIPs Are Adaptable.

These plans are versatile since they allow policyholders to pick and switch between several fund investment options. It also permits the Policyholder to perform a Partial Withdrawal with certain Extra Fees.

2. Funds for Any Critical Situation

Money is required at any point in one's life. The Partial Withdrawal Facility allows you to use the money whenever you need them, at any point in your life.

3. Make Sure Your Child Has A Bright Future.

The ULIPs give a Market-Related Return on Investment. These greater returns might assist you in building a corpus to fulfill your child's financial demands.

4. Make A Plan For Your Post-Retirement Life.

Over time, the returns from ULIPs, as well as the cover, perform better. If you start investing in ULIPs at a young age, you may build up a portfolio of investments that will benefit you once you retire.

Money Back Plans' Key Features

The following are some of the features of Money Back plans:

1. Returns Are Guaranteed.

The Money Back Plans are not affected by market fluctuations. They provide Maturity, Death, and Survival Benefits as well as Guaranteed Returns.

2. Secondary Income Source

Survival Benefits, which are paid at regular intervals throughout the policy term, provide a secondary source of income. These Monetary Values can be used in any way the Policy 
Holder desires.

3. Benefits Of Maturity And Death

The Money Back Plans provide guaranteed returns. You will undoubtedly get the Sum Assured at the conclusion of the Policy Term. The Nominee will undoubtedly get the Lump Sum in the form of a Death Benefit if the Policyholder dies unexpectedly.

4. Additional Riders

On top of the current Plan, the Riders give full coverage. Riders such as Accidental Death, Critical Illness, and others will protect you against any unforeseeable and unexpected event.

Conclusion

As you can see, each of these Plans has its unique set of benefits, drawbacks, and benefits and drawbacks. All you have to do now is go over the details and weigh the pros and cons of each plan to see which one is best for you. If you're prepared to take risks and want to make more money, we feel ULIPs are the ideal alternative. The Money Plan, on the other hand, is meant for those who do not want to incur risks and desire Guaranteed Returns.

Also read - How Is Money Back Different From Term Life Insurance?

Popular Money Back Plans In India

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.