What All Are Covered In Money-back Plans
Table of Contents
A money back plan is a simple endowment plan with a liquidity benefit. In insurance Terms it is called an anticipated endowment plan. Under this plan, there is a specific amount/ percentage of the sum assured is paid at regular intervals which Is called as survival benefit. In case, the insured dies during the policy term, then a death benefit will be payable to the nominee and the policy would be terminated.
What is Covered?
A money-back plan is an endowment plan that offers guaranteed returns throughout the policy tenure, at regular intervals. The policy covers:
1. Sum Assured
The pre-decided sum assured is an amount that is guaranteed to be received.
2. Survival Benefits
Before the plan matures, the policyholder receives the survival benefits which may be more, when combined, as compared to the maturity benefit.
3. Death Benefit
After the death of the policyholder during the policy term, the nominee will receive the death benefit. Even if all the survival benefits have been received, the death benefit will not be affected.
4. Maturity Benefit
When the policy tenure ends, the amount that is received is called the maturity benefit.
5. Bonus
You are eligible for two bonuses:
Reversionary Bonus - Declared by the company annually, as a percentage of the sum, assured.
Terminal Bonus - Is paid when you pay all your premiums consistently
What is Not Covered?
The exclusions in a policy may vary from company to company, however, the most common of all is suicide. If the policyholder, whether sane or under insanity, commits suicide within the first policy year, the nominee would not receive the entire death benefit. Only a part of the premium would be payable.
Conclusion
One thing that has to be kept in mind before purchasing a money back plan is that one cannot surrender the money back policy online. It can be done through the insurance company's branch office.
Also Read: Should I Invest In Money Market Funds Or Mutual Funds?
