How to Choose the Right Money Back Plan?

Money-back plans are a type of life insurance plans that pays back the money invested in the plan at regular intervals during the policy tenure. The money-back amount is equivalent to a certain percentage of the sum assured. These periodical pay outs are also known as survival benefits which are provided after the premium payment term has ended. The periodical pay outs are made during the policy term and at the time of maturity the rest of the sum assured is paid out with bonuses as money back plans are usually participating plans. This plan also offers death benefit i.e in case the life assured passes away during the policy term, the nominee is paid with the sum assured irrespective of periodical survival benefit payout made earlier.  

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How to Choose the Right Money Back Plan?

Following are some tips that will help you choose the right money-back plan for yourself:

1. Claim Settlement Ratio

Before purchasing a money-back plan always look for insurance providers claim settlement ratio and choose an insurance provider that has achieved a high claim settlement ratio. Claim settlement ratio depicts the number of claims made against the total number of claims. A high claim settlement ratio of an insurance provider represents the credibility of the insurance provider towards its customers.

2. Compare Different Options

There many insurance companies that offer money back plans, before purchasing one it is necessary to compare the different money back plans offered by different insurance providers. This will help you in making an informed decision, you will be able to choose a plan that not only fits in your budget but also fulfils your insurance requirements.

3. Bonus

Most money-back plans are participating life insurance plans i.e. the insurance provider declares annual bonuses upon the life insurance policy which are paid along death benefit or the maturity benefit. Prior to purchasing a money-back plan make sure you choose a plan that offers a good percentage of bonus upon the policy. This will help you grow your corpus to fulfill your future financial needs at different stages of your life.

4. Availability or Riders

Choose a money-back plan that offers life insurance riders which will help you increase the coverage under your base policy. This way you can get financial support in desperate situations because riders help in increasing the coverage of a life insurance policy.

5. Terms and Conditions

It is very important to go through the terms and conditions of a life insurance policy to know what is covered and what’s not covered under the policy. Before purchasing a money back plan make sure you thoroughly read the terms and conditions of the policy to know how this plan is going to work for you.

Also Read:- Benefits of Purchasing Money Back Policy

What Are Money-Back Plans? How Do They Work?

Conclusion

Prior to purchasing a money-back plan you should always keep the above mentioned points in your mind, you will be able to make an informed decision while purchasing a money-back plan.