Why You Shouldn't Dodge The Idea Of Purchasing A Money-Back Plan?

Money back plan is one such plan wherein you get the insurance cover and also receive guaranteed income at regular intervals during the policy tenure. This plan is ideal for people who have a low risk appetite and are looking for an insurance plan where they are able to manage their savings while the insurance plan allows liquidity. In case of an unforeseen event such as untimely demise of the life assured, a death benefit will be provided to the nominee regardless of regular instalments made during the policy tenure. 

Why You Shouldn't Dodge The Idea Of Purchasing A Money-Back Plan?

Below enlisted are some key points that justify why you shouldn’t dodge the idea of purchasing a money-back plan:

• Regular Flow of Income: As the name suggests, money back plans provide an instalment at regular intervals during the policy tenure. These regular payouts are known as ‘survival benefits’ which are provided at a decided percentage of the sum assured. The survival benefits are provided till the maturity of the plan. This benefit of the money back plans help you fulfill your periodic financial obligations without any worries. 
• Life Cover: Money back plans is a type of life insurance plan that provides guaranteed income during the policy term. Since it is a life insurance plan, it provides life cover. In case the life assured passes away during the policy term, the nominee will receive a death benefit regardless of regular periodic payouts made during the policy tenure. This way you can ensure financial security of your family in your absence. 
• Low-risk Involved: Money-back are non-linked participating insurance plans. Hence, these plans involve low risk. Market linked investment options such as mutual funds, equity funds or debt funds involve high risk because of fluctuating market conditions, which in case of money back plans is not a problem. The premiums paid towards money-back plans are returned to you as survival benefits during the policy term. A person with a low-risk appetite can purchase money back plans.
• Wealth Appreciation: Usually money back plans are participating, which means the insurance company declares a bonus at a decided percentage of the sum assured, upon the money back policy. The bonuses depend on the performance of the insurance provider in the market. Money back plans allow wealth appreciation. 

To Conclude

Above mentioned aspects have made money back plan the most favoured type of investment option among investors. Money back plans help you meet your financial obligations at different times and helps your family by providing financial protection in unfortunate circumstances. 

Also Read: Are Money-Back Policies Productive?

Who Should Purchase a Money-Back Plan and Why?

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.