Who Should Purchase a Money-Back Plan and Why?

Money-back plans provide many advantages like survival benefit, death benefit, and liquidity.

A person who invests in the stock market, irrespective of buying directly the equities or commodities for themselves or relying on mutual funds, uses the money-back plan to save at least a part of their money. 

The Money-Back plan is bought by people with short-term goals. In case of death of the life assured, the beneficiary receives a lump sum amount under death benefit. 

Reasons To Buy A Money-Back Plan

The top reasons to buy a money-back plan are:-

• Liquidity

The most liked advantage of the money-back policy is financial liquidity. The life assured receives a proportion of the sum assured at regular intervals. This ensures better financial planning and that the financial needs of the life assured are taken care of for the present and future. 

• Survival Benefit

A money-back plan pays you a portion of the sum insured on a monthly basis. If you make it through the term, you will be entitled to maturity benefits as well as any incentives that you may be eligible for.          

• Insurance Coverage

 As a combination of insurance and investment, money-back plans provide you the best of both worlds. If something occurs to you, your nominee will receive the guaranteed sum, regardless of the regular payout you've been receiving. A money-back plan not only allows you to develop your money and receive a monthly income to meet your requirements, but it also safeguards your family financially in the event that you are no longer alive.

• Waiver of Premium Benefit

The policyholder's premiums are waived if he or she dies before the insurance term expires. The plan, however, is still in effect, and payments are paid on a regular basis or as needed. This is an important aspect of money-back plans.

• Ensure your Family’s Financial Safety

The life insurance component of a money-back policy is the most essential aspect. If something happens to you, your nominee will get a certain sum as compensation. This ensures that you do not leave your loved ones in a financial bind. This money can be used to cover their everyday costs and requirements. As a result, you'll be able to look after them even if you're not around.

• Tax Benefits

Policyholders who pay their money back premiums on a regular basis may be eligible for a tax break. Section 80C of the Income Tax Act of 1961 defines the benefits of these schemes. In addition, the monthly investment plans' maturity benefit, survivor benefit, and bonuses are all tax-free.

• Regular Payouts

Money-back plans pay you a certain percentage of the maturity benefits on a regular basis. You get to decide how much you want to spend and when you want to spend it. You can invest in these monthly income schemes to augment your normal income or to support you through specific life phases. For example, five years after purchasing the insurance, you can choose to receive 20% of the guaranteed value to aid with your child's education. You may then choose another 20% for your child's marriage after the following 10 years, and the remaining amount when the money return insurance matures to plan for your retirement. 

•  Bonus

If an insurance firm earns a profit, it may pay you a bonus. This may be considered an additional advantage, and it is always preferable to get a money-back plan from a reputable insurance company.

Conclusion

In conclusion, there are many benefits of investing in money-back. People who regularly use the stock market to buy by themselves or by taking help from mutual funds can buy this plan to secure at least a part of their money. 

Also read 

What Type of Riders Are Suitable for Money Back Plans?

Which Is Better, Money-Back Or Endowment Plan?

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.