What Are The Key Features of A Money Back Policy?

Money Back Policy is one of the most popular life insurance policies in India. 
It is a savings plan which makes periodical payouts to the policy holder with a certain percentage of the sum assured over the plan's term, in the name of survival benefits. The percentage of amount returned, the number of installments paid to the Policy holder , the period gap between the installments depend on the term and policy opted for, by the Policyholder.

Example: 
 
A person wishes to take up the new Money Back Plan for 20 years. Therefore, the policy term is 20 years. Say, the survival benefits are paid after every 5 years , and the rest of it is paid on maturity of the term. Hence, he/ she receives the survival benefit in the 5th, 10th and 15th year of the Policy and the remainder of which would be paid at the time of maturity of the Policy in the 20th year. These are paid in complement to the maturity amount and bonus (if any). So these survival benefits help to meet some essential and heavy expenses along the 20 year journey. 

Key Features of The Money Back Policy 

Following are the key features of a money-back plan -

1. Guaranteed Return: A money back policy is the best option for a person who seeks a safe and secure investment.  

2. Survival Benefits: It is especially popular for its survival benefits which are given to the Policyholders. As discussed earlier, the policy provides the investor with a certain percentage of the assured sum, which is paid at a fixed interval on a periodical basis. This is  a unique feature which is not available in other insurance covers. However the survival benefits are given only to the assured party and in case of his demise during the tenure , they are NOT paid to his/her nominees. The nominees are only paid with the sum assured and bonus(if any). It is therefore like a reward for the policyholder to take good care of himself/ herself. 

3. Promised Lump Sum on Maturity: The company pays the maturity amount at the end of the stipulated policy tenure like any other insurance cover. It is the most secured investment as the returns are guaranteed and the promised amount is paid to the person , once his policy matures.

4. Regular Income Payouts After The Death Of The Assured Person: It is another vital feature of the Money Back Policy. On the death of the assured party, the sum assured is paid to the nominees of the Policyholder. This adds up to the bonus which is paid to the nominees by the insurance company. This feature attracts prudent individuals who plan a safe and secure future for their families even if they are not breathing. 

5. Lucrative Bonus Amounts:  The Money Back Plan supports two types of bonuses viz., 'a reversionary bonus' and 'an additional bonus'. 

• The Reversionary bonus is another appealing benefit of this plan. It is announced as the percentage of the sum assured which is given as bonus, every year by the company. The sum of which is added to the overall payment receivable on the maturity of the Policy or in case of the demise of the Policyholder. 
• The Additional bonus may be given to the customer as a token of reward for his loyalty towards the company and for punctual payments of the premium during the tenure of the Policy. 

6. Add on Riders: It offers optional riders to increase the protection. These riders may relate to serious illness, personal accidents etc.
 
7. Multiple Policy Terms: It enables the person to choose among the various multiple Policy term choices in accordance with the needs and goals of the customer. 

Final Note

The above features should be carefully scrutinized before going for the purchase of a Money Back Policy.It is considered to be advantageous and very useful for  the middle class section of the society , as the insurance policy can be started with a minimum amount of Rs.50, 000.
It is safe and secured which guarantees an agreed return on the maturity of the policy period.

Also Read: All You Need To Know About Money Back Plans

What Makes Kotak Life Premier Money Back Plan the Best of All?

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.