What is a Money Back Insurance Policy?

As the name suggests, a Money Back Plan offers you money in the form of Survival Benefits during the Policy Term. Financial stress and Crisis can arise at any point in time and can affect your life in a drastic way. Either you are a well settled businessman or a well earning employee, in such scenarios accumulating funds becomes a difficult task. And a Money Back Plan can help you overcome and recover from such problems. The Survival Benefit that is paid during the Policy term is a percentage of the Sum Assured which is paid to the insured at fixed intervals. Apart from this the remaining value that is left after paying all the sets of Survival Benefits is paid to the insured as Maturity Benefits at the end of the Policy Term. 

Why Do You Need a Money Back Plan? 

As mentioned earlier whenever a financial crisis hits, it becomes difficult to accumulate funds to meet the ends. With a Money Back Plan you can be assured that apart from the income that you generate from your primary source of income you also have a secondary source as well. The Amount received from the Money Back Policy can be utilized for your emergency expenses or can be used to create Additional Savings for the Future. A Money Back Plan promises you an additional source of income and it depends on you what you will do with it. 

List of Benefits Under a Money Back Plan

There are certain that you as a policyholder will enjoy after purchasing the policy. Benefits are as follows; 

1. Maturity Benefit

This particular term is well known in the Insurance Market. Whenever a person purchases a Policy, that Policy comes with a fixed tenure which is known as the Policy Term. The insurer promises to pay a certain lump sum amount when the Policy Term ends. This amount is known as the Maturity Benefit. This is a way of securing your future where you will have a certain amount waiting for you at the end of the Policy Term. The Money Back Plans also offer the same benefit where they pay a certain percentage of the sum assured at the time of Maturity of the Policy. 

2. Death Benefit

Death is something which is uncertain. And in case of the sudden demise of a family member, the family gets affected on an emotional and financial level. This is even worse in case the death is of the sole earner of the family. The Death Benefit under Money Back Plans helps you to secure the life of your family even in your absence. In such situations the insurer pays the Death Benefit Amount to the nominee of the insured. The Death Benefit is also the sum assured amount, however the only difference is that it is calculated after deduction of the Survival Benefits that have been paid till date. This value also includes any Bonuses that have been announced by the insurer or accrued over the Policy Term. 

3. Survival Benefits

These are the major aspects of the Money Back Plans. You can consider these amounts as an additional income. These amounts which are paid at fixed intervals are a percentage of the Total Sum Assured. Suppose Mr X has a Money Back Policy that promises a Sum Assured of 2,00,000 with a Policy Term of 20 years and in addition Survival Benefits of 10% in every 5th Policy Year, this means that every 5th Policy Year before the Maturity of the plan Mr X will receive 20,000 as a secondary income during this phase. 

4. Additional Riders

Riders are added to the original policy to enhance the cover. It is always better to add Riders to your policy plan rather than purchasing numerous plans for numerous uncertainties. In a Money Back Plan you can add Riders such as Accidental Death, Critical Illness, Accelerated Death Rider, etc. This will convert the Money Back Plan into a comprehensive cover for all the unknown situations. 

5. Tax Benefits

Just like any other Policy plan, a Money Back Plan also helps you in saving taxes and convert those expenses into savings. 

6. Accrued Bonuses

These Bonuses are announced by the insurer during initiation of the Money Back Policy. The insurer promises to pay an Additional Amount over the sum assured. This Additional Amount is basically the Bonuses that have been accumulated over the years. This is paid at the time of Maturity. 

You have to keep three Important Points in mind before purchasing a Money Back Plan-

1. Your income and expense capacity
2. The duration you want to stay invested
3. Your financial needs

Conclusion

As you can see, a Money Back Plan is considered to be the best alternative for any other plan that is available in the market. You can contact the Insurance Companies who offer Money Back Plans to get more in depth details about their Terms and Conditions and once you have decided to purchase a Money Back Plan, our suggestion is , don't wait just go for it. 

Also read - How Does Money Back Insurance Policy Work?

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.