Money Back Plans V/S Other Life Insurance Plans
Table of Contents
Money-Back Plans are a savings instrument that not only pays out different benefits but also gives the policyholder regular payouts from their savings corpus. This gives them a unique edge over most other life insurance plans. There are also several other differences. Take a look at the comparison between Money Back Plans and other life insurance plans to determine whether money back plans are the best option for your financial ambitions.
Read More: Is Money Back Policy Good Investment Option?
Money-Back Plans V/S Other Life Insurance Plans
The following points give an effective comparison between Money Back Plans and other Life Insurance Plans:
|
Parameters |
Money-Back Plans |
Other Life Insurance Plans |
|
Access to Savings During Policy Term |
Available in the form of survival benefits. This type of plan pays out a regular sum which is a percentage of the sum assured under the plan. |
Usually, there are no such regular payouts during the policy term. In fact, withdrawals may be penalized. Only in the case of ULIPs, partial withdrawals are allowed. |
|
Maturity Benefits |
Money-Back Plans provide a Maturity Benefit in case of the policyholder lives till the end of the policy term. It is usually the leftover of the sum assured after paying the regular payouts. |
This is also paid out by most life insurance plans except Term Insurance Plans. Term insurance plans do not payout any maturity benefit. |
|
Returns |
The returns from Money Back Plans are not very great compared to other life insurance plans. This is because much of the sum assured under the plan is paid out in regular instalments. |
The returns from other forms of life insurance plans like term insurance plans are relatively higher compared to Money Back Plans |
|
Tax Benefits |
Tax Benefits under Section 80C of the Income Tax Act of India, are available on the premiums paid under Money Back Plans. |
The same as Money Back Plans. However, some life insurance plans also receive tax benefits under Section 10D of the Income Tax Act of India |
Conclusion
Money-Back plans are, therefore, similar yet different from other life insurance plans. The unique features of each type of plan serve to better protect the various financial interests of different individuals. Nevertheless, Money Back Plans are most advantageous for their regular interval payouts.
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